Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697628016978.pdf (Australia)
A) Details of the projects vs keeping the money in superannuation My initial investment in the MIS would have grown to $360,000 had it been invested in superannuation.

Instead I have lost a total of $235,000.
Project Year Product Name Timbercorp Almond Rewards Group Teak Forestry Timbercorp Avocado 2004 2005 2006 Total Companies that Financed Loan Timbercorp Finance Rewards Projects Timbercorp Finance Initial Amount Invested Loan Amount Paid Balance Average Interest Charged Current Status If left in Super fund* $ 96,000 $ 122,000 $ 25,000 $ 25,000 $ 57,000 $ 88,000 $ 178,000 $ 235,000 - - - - 10.96% Failed $ 216,000 10.95% Failed $49,000 10.75% Failed $95,000 $ 360,000 * Australian Super Balanced Option - from project commencement to June 2014.
BT (Bankers Trust) B) Other financial institutions that my financial advisor / accountant set me up with:   Macquarie Bank  All correspondence about my loans from these lending institutions and the companies that financed the loans tabled above were sent to my financial advisor / accountant.

C) Name of the financial advisor / accountant who advised me to invest in the projects and my history with this person:  Craig Baker from Holt Norman Ashman Baker (HNAB) currently trading as Holt Baker Pty Ltd, .
 I commenced using Craig Baker from HNAB my accountant in 2001 to do my income tax.

Three years later that I was introduced to the agribusiness MIS as a superior investment to superannuation.

I understood the MIS to be financial advice and that it was separate from doing my income tax.
D) What I understood about the projects my accountant / financial advisor recommended and why they recommended the investments:  I would be supporting Australian farmers, the agricultural industry and the Australian economy by buying into agricultural and forestry managed investment schemes (MIS).

The Government had endorsed the managed investment schemes and was supportive of people putting their money into them (hence they were offering taxation concessions).

The investment was ethical.


I was advised that the MIS would be better than superannuation because it would deliver better financial outcomes - ie MIS was a more premium product to superannuation.

At the time of my initial investment I was putting additional money into superannuation but was advised to put additional money in the MIS because this would provide better returns.
    1 Forestry managed investment schemesSubmission 184         I understood I was to take out an initial loan with Timbercorp Finance (but not subsequent loans to fund further stages of the project).

I understood that I had invested in specific project years and a particular number of trees or lots (ie a specific piece of land) for that project year.

The main risk that was highlighted to me by my financial advisor / accountant was the potential lack of water due to drought.
However I was assured that he and other HNAB associates had travelled to the farms and discussed with the scheme managers the option of mitigating this risk through the purchase of water rights.

It was advised I should take out a loan to buy into the MIS (ie gearing) because the loan would be tax deductible.
As I had no security other than a small share portfolio it was recommended that I take out the loan with the finance divisions of the MIS because it would be easier than taking out a loan with a major bank ie I would easily get a loan.

I was advised that because the MIS was endorsed by the government I would get an up front tax refund.

I should use this tax refund in addition to using my existing share portfolio as equity to buy more shares.
I had never considered or heard of the MIS until my financial advisor / accountant introduced me to it – ie they played a pivotal role in me getting me to invest in MIS versus other products such as superannuation and property.

E) What I understood has not turned out to be the facts as I understand them now:  I lost $235,000 as a result of poor advice.

Had I invested the initial loan amount of $178,000 into superannuation (Australian Super balanced fund) I would have grown this to $360,000.
Lucrative commissions and soft dollar benefits from the managed investment schemes, BT and Macquarie Bank were the reasons the schemes were pushed and why no other investment options such as superannuation or the purchase of property or investing directly into shares (without gearing) were discussed during my entire dealings with my accountant / financial adviser.

The following things have since come to light: 1.


Undisclosed incentives were provided in relation to the recommending of Timbercorp   products (for instance, the provision of overseas trips and possibly the granting of equity in Timbercorp companies).

Given that the PDS for Timbercorp required Timbercorp to disclose all incentives they might pay to advisers distributing their products, they did so in breach of the requirements of the Corporations Act.

2.
2.

Timbercorp increased the level of commission paid to financial advisors to promote their geared investments as the GFC began to impact.

3.

Fudging of figures and yields were made by the MIS managers to make sure the schemes appeared viable so people would continue investing in them.

4.

HNAB continued to promote and enter clients into new projects and loans in MIS schemes even when the products were failing.

5.
5.

Peter Holt from HNAB was banned by ASIC in 2012 from providing financial advice for 3 years only.

Both he and his firm continue to operate.

 My money was not only invested in the project years that I had not subscribed to but other  project years as well.

I was not the owner of a number of trees or lots.

I had invested in nothing concrete.

I merely had an interest in something that might occur.
2 Forestry managed investment schemesSubmission 184     Proper and accurate risk profiling was not done.

In statement of advice I received in 2004 I was classified as an investor with an “aggressive risk profile”.

No risk classification was done in the statement of advice I received in 2005.

In 2006 I was classified as an investor with a “balanced risk profile”.
In the space of 2 years I had gone from aggressive to balanced even though over this time frame I invested in a high risk product and used gearing to buy shares.

Prior to getting into MIS, shares and gearing I should have been classified as conservative or balanced and post 2006 I should have been classified as high risk or aggressive.

I now understand that the amount of money that was recommended I invest was too much in relation to my total asset base and liabilities at the time.
Yet I was lent the money by the MIS finance divisions for a total of 11 loans each and every time – no questions were asked of me and no loan applications were ever rejected.

The interest rates charged by the MIS finance divisions (the companies that financed the loans) and BT were a lot more than those charged by the big 4 banks.

Over the years it was never suggested by my accountant / financial advisor that I refinance the loans with another institution offering a lower interest rate.
I can only assume this was because they would have lost the lucrative ongoing trailing commissions established as part of the original loan set up.

I now understand I funded further stages of the Timbercorp projects by way of taking out further loans (7 additional loans in total).

In relation to these subsequent investments and loans I never received statements of advice for them, nor did I get detailed information on what money would be used for and why, nor the loan conditions.
 HNAB do not have copies of my completed loan documents on hand as they should.

Timbercorp do have copies of my loan documents however these vary in how they were filled out.

Looking at these there are significant omissions and potential fraud in respect to my loan applications: o For the majority of loans asset, liability, income and expense details were left blank.

o For the majority of loans I was asked just to sign one isolated page, which was not witnessed in my presence.
The witness on the forms was somebody that I did not know or had not met (office staff).

o My superannuation was inflated.

o Existing Timbercorp loans were not listed as liabilities.

o I never received a completed copy of the loan document after signing o The address for correspondence with Timbercorp was always the postal HNAB address.

F) Statement of Advice:  I received a statement of advice before I signed the documents relating to the various MIS projects but only for the initial investment.
I did not receive statements of advice for the subsequent loans.

 My financial data was not collected and my financial situation was not analysed properly for each of the subsequent loans and investments.

 No personal financial risk profiling (i.e.

questionnaires where the data is measured against a bell curve) of myself was ever offered or done to assist with ascertaining my risk vs return tolerance.
3 Forestry managed investment schemesSubmission 184    I now understand that the amount of money that was recommended I invest in over time was far too much in relation to my total asset base and liabilities at the time of taking out the initial and moreover the subsequent loans.

The statement of advice was only focused on the MIS and using gearing to build up shares.
There was no other information in the statement of advice about products such as property, superannuation, managed funds or income protection insurance.

To my knowledge the financial advisor / accountant provided disclosure of commissions / trailing fees associated with the investment and loans however I have no idea whether this was full disclosure.

G) How I have been impacted personally: I have repaid my loans but this has caused an absolutely massive impact on my financial savings.
I needed these MIS to be successful financially for the longer plan.

As they collapsed so have my plans for my future and the future of my family.

Instead of relying entirely on my own savings to fund my retirement I will now be relying on the Government pension.

I set out to fund my retirement but have failed.

In addition feel I have failed my family.

I feel embarrassed about having trusted and relied on the advice of a financial advisor.
I feel embarrassed and ashamed at having put my hard earned money into products so unreliable and totally unsuitable for my circumstances that have delivered zero returns and cost me money.

I have, and still continue to suffer stress and sleeplessness.

I have been the victim of inappropriate and inaccurate financial advice completely fuelled by commissions, soft dollar benefits and greed which is demonstrated by the fact the financial advisor did not: 1.
Outline in any detail whatsoever how a MIS was a more superior product than investing my money into superannuation, property directly into shares or term deposits.

2.

Take into account my complete financial situation at the time of the initial and subsequent investments.

3.

Take into account any accurate client risk vs return profiling.

4.

Suggest refinancing the loans at a lower interest rate at any time.

5.
5.

Highlight all the risks associated with entering into a MIS verbally or in the statement of advice.

I also believe I have been the victim of fraud demonstrated by the fact that the loan documents were not completed fully or accurately.

I don’t want to always feel like a victim of white collar crime.

And I don’t want others to fall victim to poor advice and unethical behaviour either.

H) What I want the government / politicians to do?

1.
1.

Help consumers who have lost money to receive financial compensation and restitution of losses from the ANZ bank.

2.

Strike out any loans that are fraudulent.

3.

The government must do more to encourage the average Aussie battler to put their money into safe investment strategies such as superannuation.

Had I invested my 4 Forestry managed investment schemesSubmission 184 money in superannuation (eg Balanced Fund with Australian Super) I would be sitting on $360,000 instead of a loss of -$235,000.
Otherwise more people like me will end up relying on the government pension instead of being able to fund their own retirement.

4.

Not dilute the FoFA reforms.

In fact the Government needs to make the regulations as robust as possible for the consumer.
The Government needs to make the financial services industry more accountable and responsible than ever before - because if the availability, accessibility and affordability of high quality financial advice for consumers is not met then more and more people in the future will be relying on the government pension adding to the increasing financial burden of an aging population.

5.
5.

Ensure ASIC deals with complaints from consumers about the financial services industry and investigates them properly instead of ignoring them, and being so slow and unresponsive.

6.

Support the demands of victims and the Senate Inquiry into the Performance of ASIC 7. that recommends a Royal Commission into the financial services industry.
Impose lifelong bans on financial advisors / accountants whether they be independent / working alongside a bank, or actually working for bank, who have acted unethically, without any scruples and unlawfully.

8.

Conduct an investigation into Peter Holt and associates (Craig Baker – Associate, - insolvency advisor, - bankruptcy lawyer, - 9. bankruptcy Trustee).

Impose criminal charges against Peter Holt and associates and confiscating the proceeds of crime he retains to myself and other victims.

10.
10.

Formation of an independent organisation with the power to freeze any action against victims to take their money until a proper in investigation of victim’s allegations of incompetence, negligence and / or fraud is conducted.

Such a body should also have the power to order restitution of my losses and compensation for my suffering.
Money secured behind creditors reach should be deemed part of the proceeds of crime and hence confiscated and returned to victims of sophisticated white collar financial crimes.

5 Forestry managed investment schemesSubmission 184