Last week a financial adviser in South Australia was jailed for a minimum seven years after he stole almost five million dollars from 30 of his clients.
The South Australian District Court heard that a 51 year old man worked for years to gain the trust of his clients, before draining their retirement funds for his own personal spending.
In sentencing, Judge Michael Boylan told how the planner had preyed on the most trusting and vulnerable people.
“As you admitted yourself, you stole from the easiest targets, your clients who had placed their blind faith and trust in you.”
“Many of them were retirees or preparing for retirement. They had worked hard and saved throughout their working lives in the hope of enjoying a comfortable retirement,” Judge Boylan said.
Outside the court, victim Helen Cocks told the ABC of the trauma she had experienced.
“We were just devastated because he just took everything we had. I think he left us with about $1,000,” she said.
It follows a recent case in Brisbane where a financial planner was jailed for 10 years over fraud charges.
He pleaded guilty to the misuse of his clients’ money which resulted in a $60 million investment collapse.
One victim lost close to $400,000 and had to re-mortgage their house.
So how can you stop the financial predators from snatching your lifetime’s savings?
National Seniors has long been an advocate for better regulation of the financial services sector and was a key advocate for the introduction of the Future of Financial Advice reforms in 2013.
When fully implemented, these reforms include protections to improve the quality of financial advice to consumers.
While many advisers do the right thing, it is important to be on the lookout for those few rotten eggs in the industry.
The Federal Government’s Scamwatch website has useful tips on how to avoid being fleeced.
The site lists four categories of scams targeting your investments such as:
- Cold callers pretending to be brokers or advisers offering low risk products which yield high returns on investments
- Hot tips where scammers will persuade their victims to buy into shares that they say are about to sky rocket in value
- Seminars promoted by so-called experts who use motivational speeches to scam those who attend into buying risky and overpriced products such as investment property, without allowing for independent advice
- Superannuation where the scammer poses as a financial adviser, offering people early access to their super fund. The site says they …. “may ask you to agree to a story to ensure the early release of your money, and then, acting as your financial adviser, they will deceive your superannuation company into paying out your super benefits directly to them.”
It says you should NEVER give your details to cold callers and emailers, and you should always be suspicious of products offering “low risk with high returns.”
The ASIC MoneySmart site is also a useful resource.
You can search the financial advisers register to find out where an adviser has worked, their qualifications, training, memberships of professional bodies and what products they can advise on.
You can also check our list of companies you should not deal with.
These companies have contacted Australians with unsolicited offers of unlicensed investments. If a company contacts you from this list, do not deal with them.
ASIC also issues warnings to the public about websites or investment products that make false, misleading or deceptive statements about financial services. These warnings are issued after ASIC receives complaints from investors.
If you or someone you know has been scammed, the best thing you can do - apart from reporting it to the authorities - is spread the word so others don’t get scammed too.
Scamwatch provides information on how you can alert the Australian Competition and Consumer Commission (ACCC) about scams that have impacted you.
And remember the old adage about investment schemes: if it sounds too good to be true, then it probably is.
Through our involvement with the Be Connected program, we’ve been able to raise awareness about the prevalence of digital scams, as well as providing tips to help older Australians navigate the online space.
We are also committed to fighting all examples of elder abuse, including financial elder abuse.
As our CEO, Professor John McCallum, told attendees at the National Elder Abuse Conference, the internet is the “new frontier for financial abuse.”