Late last month, Worrells Solvency and Forensic Accountants became the fourth organisation to launch a public inquiry into Storm.
Worrells now joins ASIC, the FPA and Commonwealth Bank of Australia (CBA) in launching an investigation or review into the failed advice group.
These reviews and inquiries are also on top of the Parliamentary Joint Committee’s inquiry into Australia’s financial services industry.
Many Storm clients are not just questioning the merits of Worrells’ addition to the long list of public hearings and inquiries, but the need for so many investigations.
“Frankly, I cannot possibly see what this inquiry [Worrells] will achieve that the parliamentary inquiry or ASIC’s inquiry aren’t achieving,” Investors Consumer Action Group joint chairman Mark Weir said.
“Nobody denies that we certainly have to get to the bottom of this … but you wonder if it’s going to be money that’s well spent in the end when you consider all of the other efforts that have been made at the present time.”
Worrells obtained $450,000 of funding from ASIC’s managed Assetless Administration Fund to hold the public hearing.
Storm clients are also unsure whether CBA’s resolution scheme, announced late last month, will aid them in their individual circumstances or is just an exercise to stop any potential legal action.
While CBA and scheme partner law firm Slater & Gordon confirmed last week that any Slater & Gordon client who takes part in the resolution process will still be able to participate in any outcome arising from the ASIC investigation into Storm, there have been no firm details about whether the scheme would waiver litigation options against other parties, including CBA.
However, what is interesting about these public hearings is that despite the very intense scrutiny Storm has been under, no one has come out and said how it all went wrong.
There are the theories that the global financial crisis is behind the advice firm’s fall from grace, or the firm’s business model with its high fees.
t has also been suggested CBA was at fault, many saying the institution rushed too quickly into forcing Storm into administration, giving no thought to the clients involved.
Meanwhile, ASIC has also been branded the protector for all the wrong reasons. Despite CBA’s involvement there has been no comment from the corporate regulator regarding a penalty being handed to the bank for its involvement.
It all seems very up in the air. Not a great situation for Storm clients or former advisers to be in.
We can only hope that if none of the individual reviews or inquiries find answers, then hopefully they can combine their resources, for good and not evil.
