The receivers and managers of Storm Financial (Storm) have refuted claims they took funds from clients of the failed advice firm.
KordaMentha said it did not take or accept funds from clients of Storm during its duties as company receiver.
“Partners of KordaMentha acting as receivers and managers of Storm Financial and KordaMentha have not provided advice to clients or taken funds from clients during the course of the receivership,” a statement said.
“These trailing commissions represented an asset of Storm Financial, which the receivers and managers recovered in accordance with their obligations to realise the assets of Storm Financial.”
The firm said there is nothing secret about their business dealings with Storm, as they are required by the Corporations Act to submit statements to ASIC.
“We have submitted to ASIC a statement of receipts collected and payments made by the receivers and managers during the period of the receivership, so there is nothing secret about these transactions,” the statement said.
Storm Financial has not charged clients for any financial advice or any other service at any time during the course of the receivership, KordaMentha said.
“Fund managers have charged Storm Financial clients fees for managing their investment portfolio as agreed between the client and the relevant fund managers,” the statement said.
Despite KordaMentha’s assertion Storm clients were aware of the adviser commissions, Storm Investors Consumer Action Group (SICAG) joint chairman Mark Weir said many members were unaware they were paying commissions to their advisers.
“At the end of the day there was nothing illegal about it. It’s probably that many of our members didn’t realise that these commissions and trailing fees were still coming back to KordaMentha, and the fact that the Commonwealth Bank is the primary creditor – obviously they are going to get the benefit,” Weir said.
“So that is probably a stake through the heart of our already victimised members who seem to be in the situation largely because of Commonwealth Bank, and it doesn’t sit too well with them but is something they can’t do terribly too much about.”
