Vultures or eagles circling? You decide
Friday, October 12th 2007, 6:00AM 
8 Comments
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On 12 October 2007 at 8:28 pm Graham Genet said:
Your comments 12/10/07 regarding Chris Lees observations of Finance Companies (both alive and deceased) misses one very important point. He is not obligated to make comments on Companies he has never recommended his clients to invest in, but does so to illustrate the difference between sound and risky investments. A very sound (listed)Finance Company with a good rating from Chris Lee, has issued a statement to the NZ Stock Exchange recently advising it`s Brokerage charges and stating that these are NEVER exceeded. I wonder how many Advisors use this Company compared to Bridgecorp or say Nathans ???? On 14 October 2007 at 4:38 pm Suzanne Edmonds said:
I am interested to read your story on vulture or eagles circling.
EUFA are very alert to this and this is why we would like to bring investors into a watchdog type group as these cases can be very much a gravy train to Receivers, lawyers and the like.
We approached Grant Cameron as his reputation has shown a determination to work for the devastated that need a just outcome.
I invited Grant to meet with me to discuss some type of group action. The people who have lost their money need to take action not just with Bridgecorp and we are looking at this entire situation holding everyone in the loop accountable.
The calls from all over New Zealand want to see directors down held account and also for the government and others to be brought into the bigger picture.
Attending the meeting will be people who have invested and who have been fighting the cause of such crashes.
Gray Eatwell, a founder of the Bank Customer Action Collective, is coming up from Southland to attend as are other South Islanders who what to show there determination to see this through.
We urge lawyers who have clients to bring them along to the meeting and show a force rather than disjointing the action.
Suzanne Edmonds
Coordintator
EUFA
On 15 October 2007 at 6:24 am Stefan Pieterson said:
Chris Lee appears to add significantly to the debate and is creating a more open environment of efficient information. Equally lawyers are not vultures but just assisting in picking up the peices after somewhat shonky advice.
One has to be careful feeling sorry for advisers rather than for the actual clients who appear to have at times been poorly advised.
The excessive and secretive commissions in addition to soft benefits such as trips have once again created conflicts for advisers between looking after their clients and looking after themselves.
Any move by government to outlaw soft benefits and require open disclosure of dollar commissions will lead to open markets and assist in generating confidence in the advice sector.
On 15 October 2007 at 8:33 am Brian Doges said:
Advisors should run a mile as people attack Chris Lee they miss the point in what he is saying. To tell someone to invest 80% of their money into a high risk investment (Bridgecorp was high risk) when that is everything to them is a crime. Think of the hell that they have created for those people. Thank god these lawyers are going to help all of us get those criminals. On 16 October 2007 at 3:23 pm Neil Kirkham said:
In this case members of the legal fraternity are performing important duties. They are assisting clients to get justice where it can be shown they received poor advice and advisers failed in terms of duty of care.
Furthermore they are sending a warning signal to other advisers - they will not get away with poor advice.
Why does the IFA not have a fund to compensate investors? Cases I have seen show bad advice by IFA members. If the IFA really cared about members of the public they would set up a compensation fund to compensate for their member's poor advice (levying members if they need to to get the funds to compensate).
About time the IFA put up or shut up in terms of supporting ordinary NZers.
On 16 October 2007 at 8:14 pm Barrington Smythe said:
It's interesting to see an ex-Bridgecorp salesman writing to lawyers to advise them on the merits of their case against advisers. To use a well-worn phrase, he would say that, wouldn't he?
This guy was responsible for persuading advisers to use Bridgecorp with assertions about Lloyd's Guarantees and the like which were at the very least highly economical with the truth. I'm sure he was very well remunerated for his efforts.
I suspect he wasn't telling his adviser clients that it was a bad idea to put 20%, 50% or 100% of their clients' money with his employer, either.
Also, the fact that Bridgecorp had an 'investment grade' rating from PIR (who???) which, it now turns out, was paid for not by Bridgecorp but by Vestar/Northplan, is not an excuse for financial advisers. How many of them even read PIR's report? None, I would bet (Vestar/Northplan excepted). How many even read the prosectus?
Perhaps the lawyers should put some of these guys on the stand and ask them to read a finance company annual report and accounts and explain what it means. That would show how many of them actually understood what they recommending.
Advisers who recommended Bridgecorp can hardly expect sympathy when lawyers start to circle. Most lawyers will be keen to do a service for people who have suffered severe financial loss through incompetent, greedy financial advisers. Other lawyers will see the possiblity of a large cheque at the end of the process.
For the latter group, does that make them any different to the advisers they are looking to take to court?
On 1 November 2007 at 1:37 pm Yvonne Clark said:
Do these people seriously think that any competent qualified advisers would actually risk client funds if there was any proof that a company was about to go down.
Share markets are driven by rumour constantly and vultures take advantage of that (investors). Most advisers I am sure have their clients interests at heart, if clients lose money so does the adviser, Many clients are personal friends and any capital loss is devastating to all parties invovled. It seems a very important issue is being overlooked, alot of clients chase rate and have short memories as to the advice they received when it goes wrong.
It is also worth noting many of the investors (although not all) are or have been competent savy business people who well understand risk. Although there may be some questionable advice being given there is plenty of excellent advisers and it should be acknowledged that not all the investors were as naive as it is being muted.
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The fact that lawyers are involved is an indictment of how strongly people are feeling about their losses, and potentially how they may or may not have been misled into investing with some of these companies. It's also a case of lawyers making the most of a bad situation - they're "legal vultures", just as much as the rest of us are "vultures" in our own field of expertise - see an opportunity - take it.
At the end of the day it's a case of "buyer beware" however when people are being told that these businesses were as "safe as a bank" there's some mis-information being distributed IMO.