Investors suffer while Kelvin Syms lives life of Riley
By VoV | Vestar | Sunday 2nd May 2010The NZ Herald reports today on papers filed in the High Court at New Plymouth. It quotes an elderly woman whose life savings were invested into seven failed finance companies and funds, including ones Vestar was connected with.
This will sound very familiar to Victims of Vestar members, many of whom have identical stories.
The Herald article says the 89-year-old rest home resident’s portfolio was worth $500,000 in 2007, but less than a year later was worth only $150,000.
Meanwhile Kelvin Syms and his third wife Gina live in a $5.3 million waterfront home in the Auckland suburb of Westmere, have a $2.6 million beach house in Mangawhai, and drive his & hers Ferraris.
Syms also co-owns another Mangawhai property, two units in Mt Maungaui, several properties in Dargaville, and has shares in infant formula exporting company Avante International.
The Herald article says…
Gina Syms comments on her Facebook page that she is “living the life of Riley – very happy, no time or financial pressures to worry about”.
Mrs Syms appears to have taken her Facebook page down within hours of the article appearing today. One can imagine the panic to remove the incriminating evidence!
The Herald article finishes by quoting Kelvin Syms…
Syms said the investors taking action were in the minority. “Out of 4000 investors the majority really do believe that we have done a pretty good job.”
Comments about his lifestyle were “emotive”, he said. “We had a very good business that was sold and the world changed.
“We were the talk of the financial planning industry when we sold and it’s very simple – there’s a thing called tall poppy syndrome.”
Do you believe the majority of Vestar’s investors really do believe Vestar did a good job? Share your views below.
Do you believe investors are not at all worried about their financial losses and are just trying to pull poor old tall poppy Syms down because he’s successful? Or do you think he’s self-delusional and in heavy denial? Share your views below.
Do you believe he had a very good business and the world changed, or do you believe Vestar was heavily conflicted and had a business model that was destined to fail as soon as the inevitable recession came round, and Syms simply had the luck of the Devil in selling to MFS shortly before the chickens came home to roost. Share your views below.
Tags: Kelvin Syms, Vestar
Sunday 2nd May 2010 at 5:06 pm
I too trusted my advisor (Mark Baker ) of Vestar. He invested over $150,000 of my retirement savings in several finance companies – all of which failed and all were closely tied to MSF Pacific that vestar was promoting. I have had very little back and consider Mark Baker to be a confidence trickster who has got away whith shoddy practices. He is still operating in the Queenstown area and should in my opinion be barred from practising. He nows works for Ken Swain again.
Sunday 2nd May 2010 at 7:16 pm
We were very conservative, short term investors but Vestar put all our money with finance companies. All six are now in receivership or default. Our plans went up in smoke with the disastrous consequences of the very poor advice we received. Vestar did NOT do a good job. My experience is one of having been conned. It has nothing to do with tall poppy. I think Syms just can’t face the ugly truth. Vestar was not a good business. It was just a very slick selling chain that conned a lot of people and then failed when the economy turned because they’d made such bad decisions and created such a bad basis for their business. Those white shoe people aren’t fit to run anything other than a used car sales yard. I think they’d be really good at that.
Sunday 2nd May 2010 at 7:44 pm
Most capable people take responsibility for their actions. I agree I was responsible for some really suspect financial decisions, one of which was accepting that the Vestar financial advice organisation was honest.
I suggest that Mr Syms start taking some responsibility for his actions and stop suggesting that the average New Zealander targets high profile people just because they make money. Generally we dont do that and the best of our society are not cut down as tall poppies because they made money without losing their integrity.
Sunday 2nd May 2010 at 8:00 pm
In reply to N Cook…
You are absolutely right. The average Kiwi doesn’t target people just because they make lots of money. We only target those who make it at the expense of others.
I admire Graeme Hart but I have no time for Eric Watson or Kelvin Syms. Scruples (or lack thereof) makes the difference.
Monday 3rd May 2010 at 8:46 am
i too invested $400.000 into vestar hawera and within 4months they started to go under now hweard st lawrence can not pay more. my health is at the stage i can hardly work and an verge og breakdown
Monday 3rd May 2010 at 9:07 am
I wish for all the gods to be on the side of the investors taking legal action against these ’spruikers’.
My prayers are with those that are suffering.
I note that the Gina Syms no longer has a facebook account and Kevin Podmore ( used to own 25% of Northplan) is willing to take a pay cut? These guys are so delusional!!.
Monday 3rd May 2010 at 9:14 am
It sounds like Mr Syms believes that because only a small number of investors (compared to the investments made) are making claims in the courts and that the others are happy??? Many are not taking claims as they have NO MONEY LEFT to do so. Individual’s lives are shattered. I must have my head on the sand as I have not found ONE person throughout NZ who is happy with VESTAR. Mr Syms can get them to email us through EUFA http://www.eufa.co.nz or through http://www.vov.co.nz. We would love to hear from them! I suppose they will be the super natural because they don’t exist… unless they got off the train before it crashed because they knew about the faulty mechanics.
The Minister of Commerce might like to ask his Commission why an investigation into Vestar is not taking place. We will be asking Mr Power today to step up or step down. An article like this one of Maria Slades, overseas, would see a Government act immediately. Let’s see if the Minister will use his Power and step out on stage from behind his Velvet Curtin and make Syms and Purvis front up.
Keep the pressure on!!! The Commerce Commission turned away investigations on Money Managers until we all got in the Minister’s ear about them – wheels turn ever so s l o w l y…!
The Minister can’t say “This is before the court so I can’t do anything” but as Mr Syms himself is reported as saying “4,000 investors” used Vestar for their investments. That’s enough to make the Commission look at their statutory obligations to enforce their powers isn’t it?
Monday 3rd May 2010 at 9:25 am
Oh yes and about tall poppies……… Mr Syms needs to be true to himself and his investors and in his the dark of the night reflect on our NATIONAL POPPY day and what it stands for!
Men lost their lives for their country. Vestar has taken away freedom from the soldiers’ children and grandchildren and great grandchildren.
Mr Syms was never a tall poppy. Tall poppys shine in the sunshine and stay shining when the moon comes up.
Monday 3rd May 2010 at 10:30 am
Heres a thought..send Syms some Anzac Poppies..from some of the ANZACs that they ripped off!
Monday 3rd May 2010 at 11:11 am
Re: Garry Bain’s post
We too used Mark Baker in Queenstown, and lost our entire life savings after selling our home and being advised the safest way of parking our savings for a year or two, would be a series of companies that have all gone under. We will work the rest of our lives knowing we will not have enough to retire on while this man continues on with no negative consequences. We would love to take this guy to court so that others know what has happened but we will never have the money to do it. The class action proceeding against directors is something, but we still feel strongly that the individual advisors bear responsibility as well. Our “advisor” was the one we entered into an agreement with and who was aware of our situation.
Monday 3rd May 2010 at 11:29 am
While I agree that some financial advisors have not done the right thing by their investors, I feel that people need to be looking through a telescope at this issue, not a microscope. An advisor is recommending a product that has been approved by the Securities Commission, has a government approved Trustee (appointed to watch out for investor interests), a Board of Directors, has been looked at by various rating agencies and also by auditors. If the product passes all these inspections, why is it only the fault of the advisor when something goes wrong? In some cases the appointed receiver has cost investors money by not following the prescribed process for selling assets, thus negating the insurance policies that would have covered losses. So why are court cases and legislation only attacking advisors? It might feel good emotionally but rationally will not solve the problem. That is only attacking the tail of the beast.
Monday 3rd May 2010 at 11:50 am
I’m pleased Kelvin Syms and his 3rd wife are enjoying a luxurious life. I would hate to think that my 92 yo mother’s and father’s money had been entirely wasted.
My parents died penniless because of the greed of this smooth talking Teflon coated individual and the lies his paid advisors told. We cannot afford to take legal action against Syms, Purvis, Curtain or any of the other’s invloved; there is no money left
The friendly advisor that hoodwinked my parents still has a wonderful cushy lifestyle.
Syms should sell up his mutli-million dollar properties and his vehicles and proportionally make payment to everyone he effectively stole from.
Monday 3rd May 2010 at 12:10 pm
In reply to Carol…
It’s not so much microscope/telescope – it’s more about culpability (and Vestar is definitely culpable). Let me give you an example:
Vestar commissioned a ratings agency report for Boston Finance in 2005. When it failed the evaluation with only a 1 1/2 star rating, far below the 3 stars necessary for investment grade, Kelvin Syms shelved the report and said nothing to investors who they continued to recommend Boston Finance to.
Another example: When Pip Irwin was luring us into Vestar’s clutches she touted the company’s independence and that as a result they “provide truly impartial advice.” As we now know that is far from the truth – there were serious conflicts of interest and interrelationships that were either not disclosed or inadequately disclosed.
Another example: I asked Pip Irwin in 2007 whether any of the cash funds my mother’s portfolio was invested in had any exposure to CDOs. She said the investment in ING Diversified Yield Fund didn’t have any CDO exposure. As we now know, it was a CDO fund. She should have known that. If she didn’t she was incompetent. If she did, she lied. I later asked Simon Purvis if it was always known that it was a CDO fund. He replied, “Absolutely.”
To make matters worse, Pip Irwin advised against exiting the ING fund saying it had been affected by investor sentiment and that it was better to wait for it to recover than crystallise the loss. Hah. It’s now frozen and worth a fraction of what it was when we could have pulled it out.
They’re just a few examples that illustrate why we want to make advisors responsible for their actions.
Monday 3rd May 2010 at 2:25 pm
In further reply to Carol…
Our court case is attacking our advisory firm and its directors and members of its investment committee because THEY are the people we had a contractual relationship with. THEY recommended and in many cases directed where our money would be invested.
Whether or not those investments were approved by Securities Commission, had a trustee, etc is totally irrelevant. In many cases Vestar gave inappropriate advice. It put investors into investments that were wholly inappropriate for their circumstances and risk profile.
That’s why we’re holding our advisors accountable. It’s not attacking the tail of the beast. Vestar IS the beast. Vestar’s “financial advisors” were in my opinion nothing more than commercial travellers – slick sales reps visiting anyone with money and conning them into parting with that money so Vestar could “manage” it for them. Well, they “managed” to decimate the financial security of hundreds if not thousands of elderly people.
Monday 3rd May 2010 at 10:23 pm
If you lot aren’t doing the tall poppy thing, I don’t know who is. Successful business people make money and enjoy it, get used to that fact! If the company had not been successful you would not have invested through it.
I too have lost heaps through Northplan and Vestar. I don’t believe anyone who says (like BA) that with a conservative profile (every investor created their own profile) ALL of their money was put into finance companies. Finally, perhaps some of you may have noticed that the world DID change and investment losses have been pretty widespread over the past year or two. Hindsight is a great thing, anyone who wanted to be truly conservative could have stayed with the banks, those who chase higher returns must appreciate that with those go higher risks – that fact is pretty widely aired. The tone of some of the comments about the ethics of Kelvin and Gina Syms says a lot about the characters of the writers. Have your day in Court and get over it.
Tuesday 4th May 2010 at 10:02 am
ha ha – sounds very much like Kelvin and Gina Syms is behind Graham’s harsh, uncaring email.
I cannot believe that Kelvin Syms regards this criticism of him as a tall poppy – obviously this is the way he justifies the damage he has inflicted on people. Tall poppy . . . ? Mark Bryers, Rod Petricevich and Kelvin Syms all have many things in common but one comes to mind – “he thinks he is a big man, but a small coat fits’. After Syms made these comments in the NZ Herald on Sunday, we – along with many others, have now lost total respect for him. He is unashamedly flaunting his wealth. And to think that this wealth has been unethically obtained by securing high commissions in shonky finance companies – at the expense of his clients who paid him well and who requested low risk investments.
We have money invested in Clendon which is illiquid. Syms is still currently receiving $262,000.00 (17.5%) a year for his Clendon investment by once again looking after himself first – too bad about the mum and dad investors who have received not a cent for more than two years. Surely this is a conflict of interest and shouldn’t this be reported to the Securities Commission? If he had looked after his clients money as well as he has looked after his own money he may still have the respect of the clients. According to Chris Holmes, 65% of Clendon was invested through Vestar ! ! !
In fact, not only is Kelvin Syms delusional, it appears that he is attempting to make other people delusional by trying to convince clients that he is not to blame for any of their losses. He told friends of mine he was “out of the business” long before the finance companies began to collapse and to another that he himself ‘had also lost all of his money”. Yeah .. right ! Five or six houses worth millions of dollars, two feraris worth $600,000.00 or $700,000.00 each – no wonder they boast about living the life of riley. Think about it . . he sold Vestar to MFS only in January 2007, Bridgecorp collapsed six months later – in July 2007, Property Finance a couple of months later, Capital and Merchant in December 2007, MFS in January 2008 etc etc – Syms therefore thinks he is exempt from any rotten decisions by Vestar. But Kelvin Syms LOCKED US IN for 12 months to 3 years BEFORE HE SOLD OUT.
He needs to get over being delusional, in denial . . call it what you like – take responsibility and admit that he was self centered and greedy – that he did not do enough homework to benefit and protect his clients. The only ones to benefit was Kelvin Syms and Simon Purvis.
Tell me – did he have an inkling that things were about to turn to custard. . this must be the reason he bolted out of the frying pan . . before it caught fire!
Tuesday 4th May 2010 at 10:26 am
Yes Graham..or is that ex-financial advisor?
You have no clue as to what some people’s profiles were like..or do you?
There is a huge difference between a financial planner and a Vestar spruiker, this we found out the hard way. We now have a competent, trust-worthy financial planner who is and has always been honest and hard-working and our portfolio is making money..and no, he doesn’t drive a ferrari but he is very successful and above all….straight as a die!
The truth will come out ..so we dont need to read your ‘ostrich sentiments’. You are an ostrich with your head in the sand Graham (or whoever you are) and the thing with ostrichs is that their eyes are bigger than their brains!
Tuesday 4th May 2010 at 11:47 am
In reply to Graham…
I don’t understand how you can defend the indefensible. The point is not whether the company was successful, but HOW it succeeded. If it prospered by ethically helping investors achieve their goals, then we’d all admire them and speak highly of them and refer them to our friends. No tall poppy syndrome there.
If they were motivated by self-interest, sold dodgy investments over safe ones because they got 4x the commission for themselves, and generally shat on investors, then we’d naturally be unhappy with them, speak scathingly of them, and tell our friends not to touch them with a barge pole. No tall poppy syndrome there. Just chickens coming home to roost.
Tuesday 4th May 2010 at 12:14 pm
In further reply to Graham…
You say, “perhaps some of you may have noticed that the world DID change and investment losses have been pretty widespread over the past year or two”. Of course you are right, but once again you miss the point.
Recessions are normal in a healthy market economy. They are like summer and winter in the economic cycle. People who manage investments must anticipate recessions. But Vestar did not. It made imprudent decisions such as (a) investing in fundamentally flawed finance companies in return for higher commissions (and yes, higher returns for investors), and (b) pumping more money into those finance companies to prevent them from failing when it was obvious (to them) they were in trouble. So to blame the recession is, as Bob Jones said of Terry Serepisos, like complaining it’s wintertime.
It’s childish to blame the recession. Bob Jones operates his companies very differently. They make decisions “on the certainty of an imminent recession.” In the financial planning world that’s why good companies like Gareth Morgan and Saturn Portfolio and Pacific Wealth Creators have not only survived, but prospered along with their clients. You don’t hear us criticising them. No tall poppy there.
In my experience it is usually financial planners who fall back on the ready excuse of “the recession”. Not the good ones mind you, just the average to poor ones. The same ones who pass off any criticism as “tall poppy syndrome”.
Tuesday 4th May 2010 at 1:42 pm
Well…….I am not and never was a financial advisor and have never had anything to do with the investment/banking industry (other than investing for myself) and I am not driven to write through any request of the Northplan/Vestar people. I just happen to believe that in the circumstances that prevailed in the economy at the time, and using the risk profiles which you folk all wrote and taking into account what financial analysts were then reporting about the investment targets now being questioned and taking into account your desire to do better than bank returns and taking into account that some at least of you must have believed high return equals high risk – many investments now being ridiculed and slated were perfectly reasonable and understandable at the time.
I think being angry about investment losses is natural, but you are picking on people who in all probability acted in good faith as they thought correct. Why not target the directors of the companies who siphoned money into undisclosed vehicles, who persuaded auditors and security analysts to believe subsets of figures, who leveraged out of control, who used related parties to hide reality who feathered their own nests at investors expense. They are the ones who lost our money.
Tuesday 4th May 2010 at 7:55 pm
Kelvin claims he knew Bridgecorp were in dire trouble about a year before they went belly up. He told us that he ‘forced’ bridgecorp to change the ways they lent the money out, Insisted that the staff doing the lending were removed and replaced by others. I complained bitterly, that if he knew they were in trouble, why the heck didn’t he take our money out instead of rolling it over. I asked for all the other finance company money to be withdrawn, but as it turned out, it was 6 months too late.
He even went on to state that he didn’t like the way some of the finace companies in the market did things and wanted to bring all northplan invested in money into MFS so they could control it better. Well, as it turned out they failed, big time. but as it appears not to much at his personal cost..
Tuesday 4th May 2010 at 10:48 pm
I’m not sure if all of the vitriol being directed at Kelvin Syms is warranted. I believe he was a good advisor and built up a very successful business (Northplan) over the years. He then sold the business for a lot of money and retired on it. On the face of it, all very good. Lots of people work hard all of their lives to build up a business which they are able to sell for a fortune, and good on them.
I can’t comment on whether Syms knew about the looming demise of the finance companies or not (with the exception of Bridgecorp, which every Tom Dick and Harry in the financial advisory community knew was a substandard investment opportunity), but what I would say is that the company to which he sold the business was completely without ethics. As soon as I heard that he had sold out, and especially to an Australian company, my heart sank. I didn’t even receive any formal notification of the change of ownership from Northplan, I think I read about it in the media. It was the new owners who obviously forced the hand of the NZ management to invest in the likes of OPI (related parties). And so things went from not so great (looming recession) to worse (pouring clients money into basket cases which were related parties).
Maybe things would have still turned pear shaped with Syms at the helm, maybe not so badly. We will never know. But my point is that while everyone is pointing the finger at him, let’s not forget the Australian influence in all of this. Aussies are great, until it comes to the crunch, at which point they forget about NZ and look after their own interests. A lot of lessons to be learned from all of this…
Tuesday 4th May 2010 at 11:03 pm
You raise a very good point about MFS, and I agree with you completely. They definitely deserve just as much vitriol as Kelvin Syms. I could list all the grievances dating back to the Northplan days when we were sucked into their clutches and Syms was ruling the roost, but it’s all been documented before. You’re right though, those Aussie crooks are probably more culpable than Syms. However, Syms was still MD. It’s hard to imagine him being a mere puppet to the Aussie masters unless he was trying to keep them happy so he could get his earn-out.
Wednesday 5th May 2010 at 10:33 pm
I attended a couple of investment seminars where Kelvin Syms was promoting Northplan/Vestar a few years ago. I remember him stating several times how he has gone through life by being positive, how he hates negativity. So okay, we are really, really, really trying to stay positive. Will this mean that we get our money back? Can you give us some indication Kelvin as to how long we need to stay positive for this to happen?
Alistair – and also in response to VoV’s comments: I agree with you VoV – no-one tells Kelvin Syms what to do. I have been told that other members of the Investment Committee argued and raised concerns over the deals Syms made but were bullied and were too spineless to stand up to him. MFS turned out to be a ‘dog’ – but Kelvin Syms sold them his ‘fleas’ eg: Bridgecorp, C+M, Cymbis NZ, Cymbis Australia, Property Finance, St. Laurence, Imp, Clendon, Radius, all of which have collapsed. Also, at one stage St. Laurence owned a 25% stake in Northplan … isn’t that another conflict of interest?
Graeme – don’t waste your time defending a man who gives ill advice and who still has his head buried in the sand. Syms has not only failed his clients, he is flaunting his wealth, and shows absolutely no remorse and no compassion – it’s nothing but a slap in the face to the investors that trusted him. A lot of these investors have lost their life savings, many of them elderly people. They have worked and saved hard for their retirement and are now struggling. There are three people that come to mind in causing the NZ mum and dad investors this grief – Mark Bryers, Doug Somers Edgar and Kelvin Syms.
Finance companies weren’t a place for low risk investors, so why did Syms put low risk clients into them? Oh, how silly of me – he received high commissions of course. Not only did he negotiate high commissions, double dipping was also on the menu!
The best form of defence is to attack – this is why Syms is ducking and diving behind the ‘tall poppy syndrome’.
Another thing – Syms must have been furious with his wife’s comment on facebook “living the life of riley – no financial worries” as she removed her profile pronto! There hasn’t been much to laugh about in the last 2-3 years but I do have to say that many of us will have chuckled over her faux pas
By removing this very public ‘brag’ facebook page, maybe, just maybe – Syms is finally starting to feel the noose tightening.
Wednesday 5th May 2010 at 10:57 pm
Further thoughts for Graham…
I’ve been thinking about your suggestion that we should be targeting “the directors of the companies who siphoned money into undisclosed vehicles, who persuaded auditors and security analysts to believe subsets of figures, who leveraged out of control, who used related parties to hide reality who feathered their own nests at investors expense. They are the ones who lost our money.”
It’s an argument that crops up every now and then and I’ve never quite figured out the basis for the thinking, so perhaps you could help me out.
The way I see it, if we target crooks who were one or two steps removed from us, we stand less chance than if we target the crooks we had a contractual relationship with.
Let’s say you buy an iPod from a nice gentleman who turns out to be a crook selling stolen property, and the Police take the iPod from you. Would you want the crook who knowingly sold you a stolen iPod prosecuted? Or would you say he probably acted in good faith and target the thief who stole it in the first place, or his accomplice who fenced it, or the dealer who knowingly bought the stolen goods and sold it cheap to the nice man with the criminal record who knowingly fenced it to you – the first sucker he found?
They’re all crooks, but your beef is with the last crook. The Police will deal with the other ones in the chain. Just as the Securities Commission, Companies Office, Serious Fraud Office, etc will deal with the other crooks in our case. So why become an apologist for the crooks who sold us bad goods and target people further up the chain, further removed from us? I don’t understand that.
Regard this as talkback in writing and tell me what the basis of your thinking is in making that statement so I can try to understand it. Thanks.
Thursday 6th May 2010 at 7:18 am
well said
Thursday 6th May 2010 at 7:24 am
Well VoV, I’m surprised I need to explain my comment. If I follow your simile approach – a Real Estate agent sells what turns out to be a leaky home, the person to sue is certainly not the Real Estate agent, it is pretty hard to know who to blame as we have seen. The Architect is like the CEO or founder, the Council Inspectors are like the auditors, the builders are a bit of a grey area. My point is that the Real Estate guy is a lot like the financial advisor, unless he could reasonably have known it was a leaky home he is blameless.
Now I expect you are going to say that Kelvin knew these investments were high risk and likely to fail, I do not believe that partly because I think he genuinely cares for his clients and partly because there are/were some very well regarded analysts making what in hindsight appear to be outrageous claims about the strengths of the investment targets – I saw some of the reports.
This leaves your and others’ continuing personal attacks on Kelvin Syms and lately his wife Gina. After continued attacks he fights back – well so would I! I say again stop personalising the sad situation and have your day in court where at least factual statements will be sought and not all of this emotional claptrap.
I am not trying to belittle the plight of investors – I am trying to put a balanced perspective on your blog which feeds on negativity.
Thursday 6th May 2010 at 5:19 pm
The life of riley means an easy and pleasant life. Certainly not what a retired person who has lost most of their savings will be having. They have no chance to earn that money back again – it’s gone.
A financial advisor is not like a real estate agent! One is an agent and we all know they are trying to sell us a house for an upfront commission. The financial advisor is an advisor who advises us in a field most people don’t understand. The real estate equivalent would be the builder who does an inspection on your property before you buy it, checking for damp etc. He is an expert and if he gets it wrong you can sue him. I was advised to roll over 200K one month before Bridgecorp folded. Vestar rolled it over but took out Bridgecorp and put in another useless finance company. My beef is they knew things were going wrong by then but they needed to rob Peter to pay Paul. I had another 100K invested a year before that on a 2 yearly cycle and I’m not so sore about that. But if they didn’t know things were up one month before Bridgecorp broke, they weren’t doing their job properly and they should be sued and made to pay. Well, we live and learn – low risk investment my foot! I wish I’d been advised to put some of my money in shares – at least they would be worth something now.
PS I do agree, however, that Victims of Vestar is a terrible name. I refuse to be a victim of anyone, let alone K.S.
Thursday 6th May 2010 at 6:02 pm
Charles, the builder who does the inspection (to continue the example) is the equivalent of the analyst who rates a product, not the advisor who then sells it to you. I don’t know about you but I was certainly shown many independent analysis documents for the products our money was put into, these were produced by ‘professionals’ upon whom an advisor should be entitled to rely.
If the risk situation has been as black and white as some of the blog contributors seem to be saying there are many thousands of people out there who are culpable for not blowing the whistle. I have read lots of articles saying that Finance Companies were a time bomb, a disaster waiting to happen, an ‘avoid at all costs’ for the savvy investor – but you know the articles were all written after the event, none of the writers thought of bursting into print before the disaster happened!
Thursday 6th May 2010 at 10:07 pm
Thank you Graham…
Thanks for explaining. The basic gist of your viewpoint then is that (a) Kelvin Syms genuinely cares for his clients, and (b) some analysts made “outrageous claims about the strengths of the investment targets [so it's not really Kelvin Syms' or Vestar's fault at all].”
You correctly anticipated my response. Where to start? …
You have simply to look at the financial motivation. It was in Vestar’s best interest to promote junk bond status finance companies because I am told Vestar hooked 4% out of them [for their own pocket] vs 0.5% to 0.8% for the strong finance companies. With that sort of financial incentive it would be hard to resist actively looking for favourable reports to show investors and ignoring negative ones.
The worst example of this that I am aware of was Vestar commissioning a ratings agency report for Boston Finance in 2005, then shelving the report when Boston failed the evaluation – and continuing to promote Boston as an attractive investment to Mum & Dad investors. The report gave Boston a dismal one-and-a-half-star rating, far below the three stars necessary for investment grade. This was reported in an NBR article titled “What Vestar tells its clients – and what it doesn’t”.
That example alone illustrates the depths of moral depravity at Vestar.
Yes, many articles have been written *after the event* saying that finance companies were a time bomb. The fact they didn’t speak up earlier doesn’t mean they only spoke with the benefit of hindsight. It was widely known within the industry well before the first finance company collapse that the likes of Bridgecorp and Capital+Merchant were destined to fail. Many advisory firms refused to put clients’ money into those companies, so the companies responded by increasing the commissions they paid advisors. Why would Vestar so actively spruik those junk bond status finance companies while other firms wouldn’t touch them with a barge pole? Greed, my dear Graham, pure and simple greed.
I have wondered why people didn’t speak up earlier though. Having spoken to many senior people within the industry (some of whom predicted the failure of some of the finance companies and kept their clients well away), it seems they felt unable to speak publicly for fear of (a) being sued for defamation, and (b) incurring ridicule and negative publicity from those advisors who were feeding at the trough. There are powerful disincentives to speaking out in this country.
Regarding your real estate agent analogy, one expects real estate agents and used car salesmen to be slippery devils. They are paid by the vendor and are not there to represent the buyer. But investment advisors DO represent buyers (investors) and have a duty of care – something I believe Vestar failed to deliver. When investors profile themselves as extremely low risk and their advisor knowingly puts their money into ONE asset class that is illiquid and concentrated on highly leveraged and speculative property developments, they are clearly motivated by something other than their duty of care to investors.
There are some good financial planners and there some scoundrels. You can be an apologist for the scoundrels if you like, but the truth is plain to see.
Friday 7th May 2010 at 10:47 am
VoV you are generally simply making allegations and putting people down which you should not do. You seem to suggest that Real Estate agents would conceal the truth, you are told that Vestar hooked 4% commission out of Finance Companies, told by whom? – I am told that their commissions averaged 0.75% and that was below industry average.
You suggest that low risk profile investors had their money put into a single asset class, I have difficulty believing that unless the total investment was a very small amount of money. You suggest that financial motivation is in some way proof of intent to shaft investors, that is a big call and indicates a very negative viewpoint on life – do dentists want their patients to have good teeth?
Did anyone talk to Vestar about the Boston Finance report you refer to, and seek their response – maybe they did, maybe they did not, but a newspaper article is not proof of wrongdoing.
You say the truth is plain to see, if that is so then you really should wait for your day in court and not perhaps jeopardise your and others’ cases by unduly by creating prejudice through emotive and unverified statements on your blog.
Friday 7th May 2010 at 12:16 pm
Graham
Suggest you now stop and dont come back to a blog that you cant tolerate
You say you lost money I dont get that impression
You say the blog is getting personal – you are correct as losing life savings is personal
You say that attacking Gina Syms is unfair – I agree but you cant stop the public from feeling aggrevied after the facebook brag
You say wait till court – I agree but this site was set up for investors who are very angry now you want them to wait and see what happens – no way
Friday 7th May 2010 at 12:54 pm
Graham,
1. I am suggesting real estate agents are paid by the vendor to represent the vendor, not the buyer. Buyer beware. Financial advisors on the other hand are paid by the buyer/investor, and have a duty of care to investors. Chasing generous commissions puts them in a conflict of interest position. Those of good moral standing do the right thing. Those who aren’t don’t.
2. I am not at liberty to answer your question, “told by whom?” But if you were knowledgable enough to know what to look for in Vestar’s books, you would understand the truth in what I say. BTW, I suspect most of Vestar’s on-the-ground sales reps don’t know the truth of the size of the commissions because of the way it was classified and reported. Which makes me wonder whether Vestar was also diddling their own sales team to reduce the amount of commission they paid out to their sales reps (aka advisors).
3. VoV had in the region of a quarter of a million dollars put into ONE asset class.
4. Have you actually read the article? NBR tried to talk to Simon Purvis and Kelvin Syms but both declined. I wonder why. The article also quotes Mark Thornton, executive director of New Zealand Finance, who says he was contacted by Northplan (pre-Vestar) with a proposal that Northplan send investors to New Zealand Finance in return for higher than average brokerage fees. Thornton thought it unethical and declined. Syms and Purvis refused to talk to NBR, but Vestar’s PR firm denied everything. Yeah, right.
5. We look forward to our day in court. I relish the day.
Friday 7th May 2010 at 7:51 pm
Graham, if you mean by a single asset class, one type of investment eg finance companies – then yes, I was advised to put all my Vestar investment into the six finance companies we all know they used. There was no diversification and I saw no independent analysis documents. Was I alone in this?
Sunday 9th May 2010 at 7:23 pm
Quite clearly Kelvyn Syms believes what he is saying in reponse to the information being paraded in front of him. He clearly can be made to believe anything which is to his advantage which is what he did when making all these bad investment decisions. Now he is believing what his lawyers are telling him to believe so that when the court case comes up he will be able to speak convincingly about his bad decisions. Can you just picture what the court case will be like with Kelvyn standing there, hand on heart, telling us all how wrong we are about him.
Sunday 9th May 2010 at 10:51 pm
VoV you are implying that you have some financial competence with your comments about where to look in Vestar’s Books. You probably do, and yet you say you allowed all of your money to be put into a single asset class! I am amazed. My/our risk profile was moderate and we had some 25% in Finance Companies much of which has gone.
I also am retired and have no way of replacing the losses, but that doesn’t mean I will stoop as low as some of your commentators. You have a few very vocal folk who lost money and are bitter, there is a huge majority who also lost money but are not attracted to comment on a blog which is set up for and named for negativity. I was trying to add some balance but it seems few are prepared to open their other eye.
I’ve had my say and will leave you alone now.
Monday 10th May 2010 at 9:43 am
The great ship ‘Investors suffer while Kelvin Syms lives life of Riley’ has been dashed at sea and had its guts ripped out on the Great Rocks of Evidence. Sadly the loyal purser Graham is bailing madly and refuses to let it sink!
Monday 10th May 2010 at 4:12 pm
I think that vestar can in no way interpret that as so few investors are making an issue with their lost funds that were invested with them indicates in any shape or form that they think vestar did a “good job” My father at 84 had invested inexcess of $300,000 & now has $100,00 realizable investments with $60,000 being in a questionable state. Due to his age, poor health & now lack of funds, he does not have the means to persue this matter. I find it very amazing that any person would be happy with the situation vestar led them into & the situation they are now landed in.
Monday 10th May 2010 at 5:16 pm
In reply to Graham,
Believe it or not, I agree with much of what you say and I am sorry if you feel aggrieved. Some investors were moderate risk and had balanced portfolios that suffered some reduction but nothing catastrophic. You are fortunate to be one of those. Investors in this category are generally disappointed they lost some money, but philosophical about it. It was a balanced portfolio after all and the risks were known… and all is not lost.
Then there are other investors who were low-risk investors needing income and preservation of capital more than growth. For some reason Northplan/Vestar seemed to regard debentures in low-capital finance companies that almost exclusively lent on highly leveraged, speculative property developments secured by second-ranking mortgages as low risk. These investors have lost extremely large portions of their wealth, as evidenced by the comments above.
They’re not angry about just the loss of money. They’re angry they allowed themselves to be duped, and they’re angry at the perpetrators who they feel lied to them.
I suspect you’ve copped a bit of flak because you’ve tried to convince everyone that you are right and they are wrong. Your comments indicate you have been unable or unwilling to see other people’s point of view or accept that they might be telling the truth.
You are both telling the truth when you describe your own situations.
But it would be wrong for those who knew the risks and ended up losing a small percentage of their investment portfolio to imply that anyone who says they lost more is not telling the truth or is just a bitter loser.
Just as it would be wrong for those low-risk investors who have lost a major percentage of their portfolio (67% in Marie’s case above) to imply that everyone was in a similar situation and has suffered similarly.
Monday 10th May 2010 at 5:27 pm
A comment about the “Victims of Vestar” name…
Graham talks about “a blog which is set up for and named for negativity”.
He’s wrong about the first point but right about the second point.
I’ve grown increasingly uncomfortable with the name and intend to do something about it. I’ll write a separate article about it next week and ask for your feedback.
Monday 10th May 2010 at 5:44 pm
My companies were Bridgecorp, St Laurents and Property Finance Nearly $200,000.
I dont think they performed well. So what do you think? And I worked through Vestar.
Monday 10th May 2010 at 7:21 pm
Marie, the bad news is that you’ll be lucky to get 4 cents in the dollar from Bridgecorp, and St Laurence could be as low as 28 cents in the dollar. I don’t know about PFS but I think they’re in a much better position. I’ll find out. Let’s say PFS pays 75% – that means if you had $200,000 spread evenly across all three you could expect to get $71,333 back.
Graham, this lady stands to lose 64% of her investment portfolio and unfortunately she’s not atypical. I am in a similar category. People like us really do exist!
Monday 10th May 2010 at 8:00 pm
One of the main points of difference with people like Graham is how we saw Vestar as Financial Advisors. I certainly saw my Vestar advisor as my financial advisor because I didn’t have the understanding of finance that he did. I said I wanted low risk and trusted him to do that for me. I assumed medium and high risk investments would be worse off in times of crisis. More fool me, I guess. I was conned!
Tuesday 11th May 2010 at 3:40 pm
YES, I think ‘conned’ is the right word for what has happened to the ‘VoV’ peoples.
YES, I feel very angry with myself for trusting a so-called professional finance person and against the Directors of finance companies for putting so many people’s lives in turmoil.
I requested low risk, was not too concerned about the interest levels, as long as my ‘capital’ remained intact.
Colin Strang Financial Services sold into Northplan / Vestar and had put my investments in 8 of the first 16 companies to go ‘down’ and in which I effectively lost around $100,000.
YES, I trusted Colin, believed he was working for ME, even to the extent that I rang 5-6 times voicing my concerns, and was assured each time that my money was safe, ‘insured’ & ‘guaranteed’ against any loss that might occur. Yeah, right!
YES, I want to see justice done but what an extremely slow process even with all the good works of EUFA and VoV. YES, I intend to ‘hang in there’ with this fight for as long as I can afford to do so.
Thursday 13th May 2010 at 8:14 am
I would like to know how many people have been approached by Stock & Share Trading Company to sell their St Laurence denominated class A secured debentures initially for 8 cents per dollar and since in Receivership at five cents per dollar. The offer was to close on the 20th May unless earlier withdrawn if they received acceptances for at least $200,000.
Thursday 13th May 2010 at 8:49 am
My mother left her grand-daughters a ‘Vestar portfolio’. As will be familiar to many of you, a large proportion of this was in compromised finance companies and other investments with conflicts of interest which are now worthless.
In Nov 2007 my wife and I were about to sign up a new portfolio with Vestar. We had no experience of investing. $60,000 of this was advised to go into Capital+Merchant. I was given a copy of the prospectus. This contained information that made me doubt its security; specifically the extent to which the facility with Fortress had been drawn. I asked questions and was assured that this wasn’t a problem as there was 100% insurance with Lloyds. We didn’t sign. 10 days later C+M failed and the insurance was proved to be worthless.
As an adviser, Vestar had completely misrepresented the quality of what they were selling. As I found out later, there was no-one in the industry unaware of C+M’s position at the time. I was fortunate to have escaped the consequences at that point, but this illustrates the failure of the Vestar Investment Committee, and the advisers that they instructed, to take the most basic steps to qualify what they were selling.
Thursday 13th May 2010 at 9:26 am
if there was knowledge of bridgecorp going under a year before it happen then vestar hawera knew before taking my money in 2007 that it would never come back and i said low risk please what if all these responsable had to sell there properties to pay investers back and live like us. ON THE BREAD LINE.
Thursday 13th May 2010 at 12:01 pm
I was sold what my wife and I understood to be Clendon Shopping Centre Redeemable Preference Shares on 30/5/2007. Up until and including the valuation report dated 30/6/2008 this investment was described as “Clendon Shopping Centre Redeemable Preference Shares” on monthly reports.
Over the next three months “Clendon Shopping Centre Redeemable Preference Shares” morphed through “Clendon Shopping Centre (PPDL) (POS Interest)” to become “Point Nominees (Clendon) Limited” on the 30/9/08 Valuation.
When I queried why I no longer held Redeemable Preference Shares I was told that there was a tax advantage in doing it this way prior to becoming a shareholder in the syndicated property. At no stage was I given or even shown a prospectus. At no stage were we ever told that we were investing in a syndicated property. In view of our earlier experience with Waltus syndicates we would never have touched this with a barge pole.
Has any Clendon investor been given or shown a prospectus for Clendon?
I would be interested to know the source of B&A’s posting that “Syms is still currently receiving $262,000.00 (17.5%) a year for his Clendon investment” and can’t help but compare this with an earlier posting that claimed Hannon and Holmes were recieving 15.5% from a late in $1.5 M from an investment they made in Radius Property on the day of the last RProp AGM.
Clendon, as far as I know, last produced a quarterly update on January 2008.
When did they last have an AGM?
Friday 14th May 2010 at 12:05 pm
I had decided to say no more, but I have learned something of relevance which does not appear to be discussed here. There was apparently a second type of portfolio operated by Vestar – the Star somethingorother. I either never heard of it or have forgotten it because it would not have interested me.
I understand it was for people who wanted income rather than growth, who wanted high returns, who wanted to pay less or no management fees. I may not have all the facts here or be correct with all of this but I believe it was a fixed interest fund with no other asset classes and people wanting it were not asked to complete a personal risk tolerance profile because the decision as to investment class/es was already made by the choice of this fund.
This was not a balanced portfolio; unlike the main Vestar business which was. Being entirely interest-earning investments and not involving banks because it sought a higher yield I imagine it was possible to have every investment in that fund go bad when a collapse started and snowballed.
I do not know how the decision to enter into that fund would have been made – how much was the client and how much was the advisor but it does not seem the type of portfolio that should be used for someone who could not afford to lose capital. Offered the choice between a balanced portfolio and a single asset class (perhaps with the exception of property or where the investor had exceptional circumstances) the decision is a no-brainer.
Having said that, nobody would/could have foreseen the extent of the damage which we have seen. St Laurence for example was held up by everyone I ever talked to (and I had heaps of money with them) as a solid property company which always maintained a healthy cash reserve.
Friday 14th May 2010 at 2:33 pm
People interested in joining Court proceedings against the people behind Vestar, or any other financial advisors in Southland and Otago, should contact senior litigation solicitor Duncan Anderson at Macalisters Solicitors, 46 Don Street, Invercargill.
Efforts are being made to get one or two groups together for this purpose.
Phone toll free on 0508 506 506 or e mail dja@macalisters.co.nz.
Friday 14th May 2010 at 9:42 pm
Yes, and barrister Lawrence Herzog is also taking a case against Vestar’s directors and members of the investment committee. He is currently representing about 150 ex Vestar clients.
Amongst the group are people from all over the country, including Southland.
Because his case is quite advanced, you should consider contacting Lawrence Herzog on 027 4755-289 or email herzog@xtra.co.nz if you are interested in joining the action.
If you are interested in taking action against financial advisors other than Vestar and you are from Southland, Duncan Anderson sounds like he would be worth talking to.
Sunday 16th May 2010 at 1:34 pm
Graham has missed most of the point – he is one individual and seems to have little knowledge of the actual practices of Vestar. They charged for service they did not give ( and kept that money) and they failed to sell the products that their clients required. They sold substandard products flamboyantly window dressed. Pretty simple really.
The industry wanted to call investments “product”. When I buy a “product” and it is faulty then I expect the law to protect me. We will have to wait and see if the court agrees with Graham and all the other who Mr Syms claims are happy Vestar customers.
Sunday 16th May 2010 at 2:29 pm
Yes, and it does appear as though Graham’s comments are legitimate and representative of those investors who had balanced portfolios and weren’t over-weighted in finance companies.
That, of course, is only one group of investors. I don’t what proportion of Vestar’s clients they would have made up.
The other group of Vestar investors is the one made up of low-risk investors who were shunted into high-risk finance companies.
So anyone commenting needs to be mindful of the fact that what’s true for one group is not necessarily true for other groups.
Sunday 16th May 2010 at 2:52 pm
In reply to Graham…
Thanks for acknowledging that there are some Vestar investors who were put into inappropriate investments. Marie seems to be among those low-risk investors who were put into Vestar’s FIMS service (Fixed Interest Management System).
These were sold as low-risk investments providing “enhanced rates not normally available to the retail investor” and were zero fees, with Vestar receiving compensation by taking some of the fixed return for themselves, and passing the rest on to investors.
At the FIMS promotional seminars, Kelvin Syms gave convincing presentations about risk versus return in regard to fixed interest investments. In particular, he talked about how low returns do not necessarily indicate low risk, and high returns do not necessarily indicate high risk.
He then went on about how people could benefit from high returns at low risk through their FIMS service.
A statement in the FIMS brochure said, “Have the comfort of knowing the fixed interest investments you are investing in have been thoroughly researched by experts”.
Yeah right… As I mentioned in an earlier comment, Vestar commissioned a ratings agency report for Boston Finance in 2005, but when it failed the evaluation they shelved the report and said nothing to investors.
A [large?] number of FIMS investors were later talked into moving into the Star Managed Agreement, which appears to be essentially the same as FIMS except that fees were charged. I think Vestar continued to clip the ticket on the fixed return as well as charging fees to clients, so they effectively clipped the ticket on BOTH sides of the transaction. Talk about a conflict of interest!
Sunday 16th May 2010 at 7:39 pm
Yes, my advisor (Irwin) placed all my investment in finance companies. 10 separate investments. One was cashed in leaving 9 in failed companies. I was a conservative investor and questioned thoroughly at the time but got reassurances. When asked for my file, it showed a portfolio plan from Curtin (never shown or discussed with me) with a diversified plan with only a minor amount in finance companies. Pity it wasn’t adhered to. Was it ‘greed’ for commissions with the advisor? Or was this advisor under the direction of the directors? How good were the auditors, etc? Perhaps a few court cases will provide answers to our questions. Interesting.
Wednesday 19th May 2010 at 12:45 pm
The most productive thing investors in failed finance companies can do in the short term is investigate whether their losses can be claimed as tax deduction in the year ended 31/3/2010. In some cases – especially if the investments have been ‘ring fenced’ in a family trust – a successful claim is quick likely.
Thursday 20th May 2010 at 2:41 pm
My wife and I also attended those seminars mentioned by VOV above, gained the same impression and received what turned out to be the same misinformation. Quite frankly blatant lies.
In addition we were assured that each of the investments that we made were underwritten by an insurance policy that covered our complete capital even if the interest was lost. It was on this basis that we decided to invest.
This turned out to be just more lies by Kelvin Syms and his associates. In fact it was down right fraudulent.
How does Graham explain that complete lack of any integrity?
Thursday 20th May 2010 at 4:35 pm
Anson, in defence of Graham it appears he didn’t know about Vestar’s FIMS or Star Managed Agreement products. He was in a balanced portfolio and therefore only had moderate losses (as a percentage of his total portfolio).
Graham’s mistake was assuming everyone else was affected to the same small degree and were therefore a bunch of sour grape whingers, but other than that he’s just another Vestar investor like you and me.
The real enemy are the directors, investment committee and advisors at Vestar who cynically pumped us into high-risk investments while telling us they were low-risk.
Monday 24th May 2010 at 1:00 pm
Heres the latest! http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10646837