Financial Planning Assignment

When Storm’s founder likened his model of financial planning to that of a Big Mac or a Ford production line, I think that he was referring to the quality of the products on offer. He is comparing his model of financial planning to the fact that people pay money for poor quality food and poor quality cars, just as they pay money for poor quality financial planning through Storm Financial. The Storm advisers breached their AFSL obligations because did not get to know their client. They offered the same advice to each of the clients, which resulted in great losses because they did not look at the needs of each individual client.

I think that the Storm Financial Collapse occurred in late 2008 because of the Global Financial Crisis. The GFC began in 2007 with share markets around the world falling by an average of 15% over 2 weeks. The effects of the GFC are ongoing and definitely would have affected a company such as Storm Financial in late 2008.

The writer ascribes the role of arbitrator to ASIC. ASIC have managed to set up a website with a ‘My Storm Investment’ section, which gives Storm victims the hope that ASIC is still working on the case, but that is all they have done. I think that he criticises ASIC’s actions because he sees them as responsible for picking up the pieces, and yet they have not done a great deal in doing so. I believe that ASIC recommended to the Parliamentary Inquiry that all forms of commission be banned due to the fact that Financial Services companies are abusing their knowledge and power to provide poor advice to clients in the hope that they will invest, and the company will get that commission. However, if there was no commission available to such companies, there would be no reason for poor financial...

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...30% income and 70% growth if they are willing to take risks to build up a nest egg.

The couple would benefit from investing through a wrap account because all of their investments are under the one organisation, which means the can receive a report detailing the overall asset performance. They can access funds through wholesale MER’s and they will only be charged one administration fee for their investments as a whole.

I recommend that the couple switch to more volatile shares that will generate a bigger return in the long term. They should keep their cash investments as security for the short term, however, the current shares they are in will not provide as much return as they could get if they were in a more volatile market. The couple’s total gains were $17000 and their total losses were $4000, therefore their overall capital gains were $17 000 – $4000 = $13 000.