Whats your thoughts? That the fine should be equal to whats lost? Investing carries risks, both with and without an advisor
Navra Legal Action
- Thread starter Mark C
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Whats your thoughts? That the fine should be equal to whats lost? Investing carries risks, both with and without an advisor
1/1000th of what people lost - $12,000 for him , $12,000,000 for his clients
No doubt explains the current government policy to financial planning. Or is the current government policy based on:
October 19, 1989: Whitlam wrote for the London Daily Telegraph - "The punters know that the horse named Morality rarely gets past the post, whereas the nag named Self-interest always runs a good race."
Read more: http://www.canberratimes.com.au/com...ble-quotes-20141021-1193jd.html#ixzz3GjS0xu1f
Don't understand why he can now continue to provide financial advice?
I guess its the company that made the losses got penalised and the person can continue to travel on their merry way.
Personally its a pathetic fine/outcome, but its white collar crime, right, much more lenient.
I have not read all of this thread, so long, but I am curious perhaps someone has already posted, did he personally go bankrupt???
Consider yourself lucky with $50K loss, There are people who lost their life savings, very sad.
He is a good talker, spin doctor, we went to one of his seminars but I could not get my head around his tax saving schemes so never jumped in.
MTR
If I invest on my own and make a loss do i sue or arrest myself?
With a FA/FP, they don't make it any safer, they just analyse your risk profile and place your investments on your behalf. Those investments still have the same win/lose ratio as if you were in them directly.
Just because its FA/FP placed, doesnt guarantee its return. If it did we'd all just send 100% of our funds there. Who wouldn't want a guaranteed return.
An analogy would be a sports player. You can recruit Gary Ablett for $1mil per year because he's got an awesome track record and experience, but that doesn't preclude him from having a bad game here or there, or missing some games through injury. You can't criticize his recruiter or manager for the games he hasn't performed in or been present in.
With a FA/FP, they don't make it any safer, they just analyse your risk profile and place your investments on your behalf. Those investments still have the same win/lose ratio as if you were in them directly.
Just because its FA/FP placed, doesnt guarantee its return. If it did we'd all just send 100% of our funds there. Who wouldn't want a guaranteed return.
An analogy would be a sports player. You can recruit Gary Ablett for $1mil per year because he's got an awesome track record and experience, but that doesn't preclude him from having a bad game here or there, or missing some games through injury. You can't criticize his recruiter or manager for the games he hasn't performed in or been present in.
Dave a better analogy would be to hire a professional coach to run your sports team, the individual player is actually one of the investments they manage.
Certainly some elements of your team/portfolio are going to have good or bad days, they might need to be sacked and rehires might need to happen. You'd expect the coach/planner to take care of this and manage it appropriately.
Or you can coach the team yourself. You've watched footy on TV, been to a few matches and even played a bit yourself. How hard can it be?
With professional coaching, you might not expect your team to win the grand final, but you expect them to perform better than the would without the coach and you certainly don't expect them to loose every game of the season by an enormous margin. I'd expect a financial planner to make recommendations that would improve my financial position over time, I expect them to come out ahead overall. Some losses are acceptable in the bigger picture, but I don't expect them to loose everything.
I also have the expectation that I'd research my coach properly and make sure I employ one who does perform well. I'd look at their track record and strategies. I did this with Navra Invest 13 years ago and subsequently decided not to invest through them. I can say the same thing about various plantation schemes, there's been dozens of these over the years as well.
Certainly some elements of your team/portfolio are going to have good or bad days, they might need to be sacked and rehires might need to happen. You'd expect the coach/planner to take care of this and manage it appropriately.
Or you can coach the team yourself. You've watched footy on TV, been to a few matches and even played a bit yourself. How hard can it be?
With professional coaching, you might not expect your team to win the grand final, but you expect them to perform better than the would without the coach and you certainly don't expect them to loose every game of the season by an enormous margin. I'd expect a financial planner to make recommendations that would improve my financial position over time, I expect them to come out ahead overall. Some losses are acceptable in the bigger picture, but I don't expect them to loose everything.
I also have the expectation that I'd research my coach properly and make sure I employ one who does perform well. I'd look at their track record and strategies. I did this with Navra Invest 13 years ago and subsequently decided not to invest through them. I can say the same thing about various plantation schemes, there's been dozens of these over the years as well.
I shouldn't do this as it makes me look like a bit of a wan ker, but I can't help myself.
Check this out! I make a claim that in a big crash like the Oct 1987 one, any fund like the navra fund would get hammered. And Steve chimes in about how Oct 1987 was his best ever investing time?
http://somersoft.com/forums/showthread.php?t=17191&highlight=Navra&page=3
Me post 51. Him post 52.
Anyway we know what happened in the even bigger 08 crash?
Bloody hell! Good fun going back over things on here some time?
See yas.
Check this out! I make a claim that in a big crash like the Oct 1987 one, any fund like the navra fund would get hammered. And Steve chimes in about how Oct 1987 was his best ever investing time?
http://somersoft.com/forums/showthread.php?t=17191&highlight=Navra&page=3
Me post 51. Him post 52.
Anyway we know what happened in the even bigger 08 crash?
Bloody hell! Good fun going back over things on here some time?
See yas.
That's the way the system works,and not only tax payers money some bank unit holders also will pay for the companies legal costs,,i went along to one of these seminars a long time ago on the riverfront in the cbd,the placed was packed seafood lunch add a combination of charisma, it was just not for me ,there was at the end a small time to have a quick talk
had a talk gave the gentleman a cigar and walked out the door..
The investors may have received substantial tax benefits but it didn't increase the "take home" income of the investor, it went toward paying interest on money that may never have existed on plantations that also may not have existed.
So in some respects the tax man was also ripped off.
But we can all rest assured it was at least done by "Licensed financial advisors", now there's a group of words that can keep you awake at night in a cold sweat!
"How to become a certified financial planner in 34 hours".
http://www.theaustralian.com.au/opinion/how-to-become-a-certified-financial-planner-in-34-hours/story-e6frg6zo-1227041835840
mmm I've got a couple of days spare this week.... what the hell.
Another article from the weekend.
Mark C
So in some respects the tax man was also ripped off.
But we can all rest assured it was at least done by "Licensed financial advisors", now there's a group of words that can keep you awake at night in a cold sweat!
"How to become a certified financial planner in 34 hours".
http://www.theaustralian.com.au/opinion/how-to-become-a-certified-financial-planner-in-34-hours/story-e6frg6zo-1227041835840
mmm I've got a couple of days spare this week.... what the hell.
Another article from the weekend.
Mark C
That article is misleading and deceptive. What the guy obtained was a diploma. He is not a financial planner and certainly not a 'certified financial planner' which is a registered trademark. All he has is a diploma. he needs to be licensed to give financial advice which means applying for his own AFSL licence, which he couldn't, or become an authorised representative of an AFSL holder, which he probably could easily.
A Certified Financial Planner is another accreditation and there are higher entry standards and further study required. http://fpa.asn.au/cfp/cfp-certification-program/entry-requirements/
I agree that it is ridiculously easy to complete the diploma and become licenced. A lawyer takes 4 years and then you need to work under someone for 2 more years before venturing on your own.
A Fin planner could set up shop within a week. its not right!
best of luck getting the rep shingle or your own in a week
while I dont disagree in context, the issue of quality advice isnt solved by servitude and educational outcomes.
Id guess that most times, users of professional advice services arent failed by educational standards , but by values, that moral/ethical hazard where the personal and sometimes corporate importance exceeds that of the person needing the advice..........
ta
rolf
Indeed. Length of education has nothing to do with it. How many people are there out in the world who studied any given subject for several years at University, heck have been out of University, in some cases for a couple of decades, that give their clients poor advice!
Just because someone has a degree doesn't guarantee they are good at what they do or that they are automatically better than someone who doesn't.
Same! I remember well all the hype & went along to a free appraisal of some sort. He looked over our portfolio full of ex-housies & regionals & blatantly said that we were doing it all wrong & would never get ahead. Needed to sell all our IP's & buy some innercity heavy neg geared stuff & then diversify into his funds.
Fast forward & I'm more than happy. To me, there was just something 'off' about him, besides the fact that we thought his advice sucked.
I was told something similar.
Our story is actually a little contrary to this. He looked over our (at the time, meager) portfolio and said we were doing it right. Our IPs were good properties in blue chip suburbs, cash flow neutral (with interest rates at 7%).
The recommendation was to invest in his funds and he gave me a lot of info about how the system would work. It appealed to my math oriented mindset so I paper traded it for a few months. Say what you like about Steve, but he was very generous with information, you only had to ask.
The paper trading failed miserably. It lost money when I could see that a different buy and hold approach would work well. At the same time we looked at some of the properties being recommended to his clients and didn't see the value in them. They were over priced in average growth areas, when I could see properties all around me that had opportunities in them.
Needless to say we forged our own path and have done reasonably well.
The great thing about investigating strategies in the share markets is that you can paper trade before committing too much. You can't do this effectively with property. Having done this a few times over the years, I've come to a very simple conclusion:
Trading is risky and whilst it might make a lot of money, it can loose it just as easily. The problem with stock brokers, managed funds and just about every other form of money management, is they're all trading to some degree.
Some people can manage the risk and do very well out of trading. For the rest of us, the solution is simple. Buy something that you understand where the value is in it. Hold onto it for as long as it is giving you that value and you'll do okay. This can apply to any form of investment, shares, property and even business.
I agree! This is where I had a problem with Steve's selection of property. We weren't earning stellar wages, so to us neg cashflow properties were a huge risk. We already had a reasonably large portfolio of stuff that we DID understand and was cashflow positive (value to us). There was no way we'd cash in our properties & go for neutral/negative.
My thoughts are to leave the education as it is, but in order to provide advice, the individual in question must do time (say 2 or 3 years) in a support role. Either as a paraplanner or Associate Adviser, with proven 'sit in front of clients' experience, to get a feel for how it's done.
No guarantee the individual will come out the other end capable of providing good advice, but it's a better option than getting the DFP and going straight into providing advice.
Yes., maybe like the lawyers - have the new planner do 2 years before getting the ability to open his/her own firm.
What about the FP personally underwriting a percentage of the risk in the investment. That might sharpen up some investment advise!
The investments must also have appropriate insurance.
The FP must carry sufficient insurance.
Someone here may be able to clear this up but apparently Navra only had $1M or so in insurance cover?
Topcropper your comments on PE in 87, not being as knowledgable in the market as you are, was there a comparison in 2008? If 87 had warning signs did 08 as well (in your opinion)? Navra claimed to have done well in 87, however 08 was a very different outcome for him and his clients.
Mark
The investments must also have appropriate insurance.
The FP must carry sufficient insurance.
Someone here may be able to clear this up but apparently Navra only had $1M or so in insurance cover?
Topcropper your comments on PE in 87, not being as knowledgable in the market as you are, was there a comparison in 2008? If 87 had warning signs did 08 as well (in your opinion)? Navra claimed to have done well in 87, however 08 was a very different outcome for him and his clients.
Mark
Sim
Administrator
I think managing your own money is a very very different exercise to managing someone else's money - completely different set of issues and risk profile.
Also consider the extra-ordinary forces at play which dictated a lot of the investment decisions and advice - specifically the collapse of Great Southern and the attempt to recover losses incurred there.
While I liked the trading mechanism of the NavraInvest fund and its ability to generate income - it did come with a downside that once the market fell far enough, it would be fully invested and just a passenger on any further downward ride until things started turning around and it was able to start selling at a profit again.
But that was always a known possibility for the fund. Of course, trading parameters were set based on an assumption that the market would only fall by so much, which turned out to be completely invalid assumptions, but even so - there was never a magic solution - like pretty much every other fund out there, it would just have to ride out the downturn. The potential upside when the market eventually turned around was what was exciting.
Hoever, where things started to go really badly for everyone was when the decision was made to sell out and move the fund to 100% cash.
The fund was allowed to be in 100% cash - but it was never intended for this to happen in a down market - the 100% cash mechanism was for a raging bull market which allowed the fund to sell out progressively as the market went up, realising profits and distributing income - and then buying back in when the market dipped again.
So not only did the fund manager decide to break the fundamental trading mechanism of the fund - their caution lead them to delay buying back in until well after the market had started rising again, further delaying any potential recovery and exacerbating the problems that the non-trading fund had produced (namely, no income distributions).
While it was publically denied, I'm pretty sure that the decision to move to cash was a mechanism to protect the funds under management of the fund manager.
Since a large percentage of the investors of the fund were NFS clients and their strategy was to leverage into the fund using margin loans and warrants, once the fund value dropped far enough, massive margin calls would be made - thus decimating the value of the funds under management (and further, any future trail commissions for the planners!).
While you could possibly rationalise the decision as a purely defensive one on the part of the fund manager - to minimise the downside in a market which nobody knew how far would fall - the external factor of protecting funds under management from being wiped out by margin calls, does make you question the validity (and independence) of such decisions.
So while I did like the trading mechanism - I was disappointed that we were never given the opportunity to see what the fund could really do in a massively down market.
Either way - it was just theoretical for me, I had sold out of the fund not that long after the market started its down-trend and so was just a spectator for the worst of the market - watching the horror unfold with a morbid fascination like the proverbial train-wreck.
