Jan McLucas (Queensland, Australian Labor Party) Share this | Hansard source

I too rise to take note of what I think will be an important report that will assist in policy development. It will perhaps assist people to make better decisions. Hopefully, as Senator Williams said, we will not end up here in 10 or 15 years time placing down on the record another report that talks about the devastation of thousands of families’ lives, as we have seen in this case.

I was very pleased to be able to join this committee after they had actually started this inquiry because there are many of my constituents, particularly in North Queensland, who have been affected by the collapse of Storm Financial. The toll on these people is devastating. Many of these people have lost everything that they owned, and the many personal stories that people openly shared with us explained their situations. We should take this opportunity to thank them for their openness about their personal financial situation and the toll it is taking on their health and, in some cases, on their mental health.

It is important to note that this inquiry is simply that: an inquiry into the facts surrounding what happened, not only in Storm but in Opes Prime as well. It is not a court—it cannot find guilt—and I know from the commentary I have seen today that people who are involved in this know that. There are other places for fault to be found, and those processes are proceeding as we speak.

If I focus simply on the Storm inquiry, there was much conflicting evidence from the various sides of the story. The evidence that troubled me particularly was evidence given by the owners of Storm Financial, Mr and Mrs Cassimatis. Mr Cassimatis indicated to the committee that clients of Storm Financial essentially self-selected. They would go to the so-called ‘information evenings’ and then decide to ‘join’—and I put ‘join’ in inverted commas. They ‘joined’ Storm.

That is the language that I have heard used in my communities as well—that people ‘joined’ Storm. That is not the language we should hear when we talk about people receiving financial advice. Financial advice needs to be tailored to the individual circumstances of a person who is looking for that advice in order to invest—you do not self-select a product. Certainly, if you tell your planner that you are a very conservative investor you should not end up with what I think is one of the riskiest products that is on the market: to take a mortgage out over your own home to invest that money in the stock market, then—and this was the problem that occurred when the stock market crashed in mid- to late last year—not to be advised either by the bank or by your so-called financial adviser that you are in margin call. That is what happened. Many people lost thousands of dollars and are now living in circumstances that they certainly were trying to avoid.

We have made recommendations about the need for financial planners to have a fiduciary duty that would require a planner to put the interests of the client above all interests. That is what should be in place and that is what we have recommended.

The other conflicting advice that I think was very troubling is that five or six people came before the committee and said they had signed forms that were not filled in. There are two people at fault in that circumstance; one is the person who signed the form that was not filled in. Of course we know that we should not do that, but they were lulled into some sort of sense of security that everyone would look after them in the end—‘Just sign here, it will be okay.’ The person who signed it should not have. But surely there is a responsibility on a person who is asking a client to sign a form that has not been completed: firstly, not to ask for it and, secondly, to ensure that the figures are accurate. Some of the most appalling stories we heard were about pensioners with loan application forms indicating that they were receiving $120,000 a year in income. This is bizarre stuff, but it was too regularly repeated.

The conflicting evidence, however, came from the advice given to us by some of the banks, saying that no forms would have been signed prior to being completed. This is another matter that other avenues of redress will look at, but it certainly is an area of concern. I was very pleased to hear from three banks in particular—the Commonwealth Bank of Australia, the Bank of Queensland and the ANZ Bank—that they did accept some responsibility. The Commonwealth Bank in particular has indicated that they will assist clients in need. I encourage the other banks to ensure that their reputations are not sullied further by ensuring that they seek out every client they possibly had, ascertain their personal financial circumstances and do whatever they can to shield them from the devastation that may be in store for them.

I also want to acknowledge the role of SICAG. SICAG is a group of people—three very dedicated gentlemen—who have taken it upon themselves to provide advice, emotional support and friendship to the many hundreds of people who are in need of that assistance. I commend SICAG for the work that they have done over 12 months.

Finally, I also want to acknowledge the role of the very professional committee secretariat, and I commend them not only for their ability in dealing with the complexity of the material that was in front of us but also their compassion in dealing with people who needed tenderness and support in sharing their stories with the committee. They did an excellent job, and I think it is a quality report. I want to pay tribute to the chair of the committee, Mr Bernie Ripoll. I think he did a fine job of making sure that all the voices that needed to be heard were heard. It is important that this report is a unanimous report, and I have read that the Minister for Human Services, Mr Bowen, is pleased to receive it. I commend the report to the Senate and I seek leave to continue my remarks.

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