As IFA went to print, the records and investment history of clients of the financial advisory firm were handed over to receivers KordaMentha.
It would now seem that of the more than 14,000 Storm clients, those who have not been able to access their financial records through their advisers will have a lengthy wait.
A statement from the firm’s voluntary administrators, Worrells Solvency and Forensic Accountants, said it was “unable to assist clients” to access any information concerning client investment history or position.
“Clients who believe that they are also creditors of Storm should complete a proof of debt form and submit it to us. It is important when completing the proof of debt form that full details and documentation substantiating a claim as a creditor be included,” Worrells Solvency and Forensic Accountants said in a statement.
Clients may now have to stand in line with Storm creditors such as the Commonwealth Bank of Australia (CBA) if they are to recover any lost money, or take it up with the courts.
While there has been no confirmation of Storm clients forming a class action, legal murmurs have been sweeping the industry with Slater and Gordon having been contacted by more than 260 Storm clients. The number of clients affected by Storm’s margin loans is said to be more than 450.
Of these clients, the lowest loss for a client is $150,000 with the highest to date being $12 million, according to Slater and Gordon.
The class action may not happen as class actions are designed for a situation where one size fits all and in this case, the Storm clients have different situations, Slater and Gordon practice group leader Damien Scatinni says.
“Here we have a number of different players giving varying advice to parties in different situations in different states and countries. It’s just not a neat fit,” Scatinni says.
“It’s a mess and all along the chain the advisers to these people have let them down and we’re going to see what the best form of resolution is for our clients.”
Another blow that will no doubt be felt from the collapse of Storm is the reputation damage to advisers and subsidiaries associated with the firm.
For many this suggestion may not be worth a second thought, though for honest advisers and honest businesses that perhaps were in the wrong place at the wrong time, they are now tarred with an unfamiliar brush.
Murmurs around the industry have suggested CBA tied dealer group Financial Wisdom is looking to swoop on the Storm client books and advisers. However, such a suggestion was denied by the group.
As an industry, are Storm advisers or other advisers of former collapsed groups employable after the fact?
Is an adviser group like Storm a sought after group?
Is the collapse of a planning group enough to ruin the careers of an adviser?
Or is it a case that advisers are best fending for themselves?
