Morgan Slams the Vestar Gravy Train
In making public that his investment management company, Gareth Morgan Investments, has been taking over portfolios of Vestar clients and not charging any fees at all on their investments that are currently suspended or of doubtful value, Dr Morgan expressed his dismay at the way some players are still treating Vestar investors.
“I found the statement attributed to Vestar bidder George Gould, an indictment on how financial advisers treat their clients”.
Mr Gould, when queried about his intention to keep charging fees to Vestar clients on the ravaged part of their portfolios, is quoted as saying,
“… if the advisers can't be remunerated then what incentives have they got to recover it [their money]? And sometimes it does come back."
“The Gould statement pays little heed to the fact that it was Vestar advisers that filled their clients up with these rubbish investments, well beyond what could be defended as prudent – including loans to the inter-related parties of MFS, the owner of Vestar in the first place”, Dr Morgan said.
“And they did that on the basis of the commissions they got, not what was in the clients’ best interest. This demonstrates yet again just what damage commission salesmen are doing in the financial advisory sector. Yet Mr Gould is offering to buy Vestar as long as he can keep charging these poor devils who Vestar has ruined, around 1.7% pa".
“I hope the Minister of Commerce is taking note of all this – her dereliction of regulatory duty is producing astounding outcomes now – commission-driven loans to related parties by people purporting to be advisers, have become de rigeur. Then the same firm can keep charging the clients as though nothing had happened! In other words they face no sanction for posing as advisers, bundling clients into related party loans that have gone bung, and now charging them 1.7% pa of the original value. That Simon Hassan and the FPA think this is all fine, really does show you the gutter this sector lives in".
“I’m disappointed that New Zealanders are being treated with such callous disregard. The conflicts of interest, the insatiable appetite to keep pummelling mum and dad investors even when they have been the victims of an atrocious standard of care, sums up what our financial advisory sector has been allowed to become. What a long lunch the Minister is having” – Dr Morgan said.
Victims of Vestar Website
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