Perusing the other remuneration sources pages in the Disclosure Statement, imakes it utterly clear that the commssion & brokerage income from product sales would provide somehwere between 30% & 80% of his stated “packages” costs.

Given that I provide most of the services Wise Planning states it can charge an annual fee for – starting at $5,620 + GST – clearly, I’m a total mug. Oh well…happy clients who have confidence in their adviser is probably a more robust long-term model than a flashy set of fees, and likely unhappy punters.

How unhappy? Well, if you’d paid $5,620 + GST to be “coached”, and then found that the $50K in Bridgecorp had been halved (or worse), AND the adviser had earned a 1% p.a. fee for the placement…well, ask yourself.

I’ve come across this outfit from time to time over the years, but only ever met one “client” who had purchased a package . This client was struggling to pay the monthly $120 (around 10 years ago…the current fee structure certainly reflects inflation). He was, unfortunately, a long-term ACC claimant at the time.

While practices such as Wise Planning have an appearance of professionalism & respectability, it is a veneer oh-so-thin.

Spare a thought for the older folk who borrowed $50k reverse annuity 3 years ago. They now owe north of $66K. Today one of the providers lifted their interest rate to 12.25%. Another 3 and a bit years the debt will be about $100k.

Ouch! I WAS going to copy part of today’s e-mail “Taking Stock” but the copyright apparently does not allow fair use, even with source acknowledgement. Pity…still a few selected quotes might be overlooked by the high court?

” Hanover has never been top shelf, but it has survived the last, difficult, 12 months – uncomfortably, but without failing to meet its obligations.”

“But Hanover deserves some credit. It did not lend to absurd multiples of its capital (as Lombard did); it was never managed stupidly (as Bridgecorp, Capital Merchant and others were); it never paid double brokerage; and it did get itself externally rated, even if its grading is one pip below investment grade.”

“Hanover has suffered from a series of rumours and innuendo, often in those appallingly supervised vacuous website forums where public bar louts practise their belching to the accompanying sniggers of other juveniles who find comfort in this sort of crassness.”

(Guess he means us…)

“Happily the adult population by-passes this so the worst of the malicious and meaningless innuendo gains no currency, leaving Hanover to focus on real issues.”

“A less resilient company might have found this flow of rumours too damaging to survive. Happily the adults in the industry checks out rumours before publishing them.”

“Clearly Fitch has optimism.
I hope to resume our rating of Hanover later this year.”

Do I sense a small sigh of relief?

An interesting change arose on his website recently – the total disappearance of Hanover Finance…and a day or so later a note was added stating “Please note until further notice we are not in a position to accurately rate Hanover/United/Fai.” Why not? S&P just reconfirmed its rating? But then, he has already shown that he has little confidence in any rating company (possibly with some justification).

Still, the obvious question arises – what of his existing investors with holdings in Hanover, made on his recommendation? If Hanover IS in a tenuous situation, AND Mr. Lee pulls his “rating”, might he not be seen to have been influential in whatever happens to Hanover next? A massive drop in re-investment can severly strain even a sound, strong finance company, let alone utterly sink a more fragile one.

Will he repeat his offer made ot his Provincial clients? How deep ARE his pockets?