During the Christmas break I got stuck into a podcast produced by The Australian called “Who the Hell is Hamish?” You may have heard of it. If you haven’t, here’s a quick recap (note: spoiler alert).
The seven-part series chronicles the life and crimes of serial Sydney-based conman Hamish McLaren, also known as Hamish Watson, who managed to swindle more than $7 million from wealthy investors across Australia, Hong Kong, the US and the UK over a number of years. One of his victims was Aussie fashion designer Lisa Ho.
Posing as a successful futures trader, former Goldman Sachs employee and wealthy investor, the conman was able to gain the trust of his victims and convince them that he would invest their money and deliver stellar returns. Which he did – for a while – using a Ponzi scheme method. But eventually he left his victims penniless.
He was eventually captured by police and in June last year was jailed for up to 16 years. But the money he stole is long gone. No remediation programs being announced from this guy.
What struck me while listening to this story was how this man played on the anti-bank sentiment that has become so commonplace in Australia’s culture.
Throughout this series we hear from victims who were told by the conman not to trust the banks, or that he “hates the banks”, playing on the resentments they may also have cultivated. He urges his victims not to let “those thieves” steal their savings. When in reality, that’s exactly what he planned to do himself.
There is no doubt that consumer trust in the Australian banking industry has been significantly eroded in recent years, culminating in the Hayne royal commission. This leaves vulnerable Australians in a very dangerous predicament; particularly as new operators look to fill the gap and win trust by offering an alternative to the big banks. Bank bashing consumers hungry for yield are in the perfect position to be scooped up by scammers.
While there are plenty of credible new players in the market looking to challenge the major financial institutions by offering a better customer experience and superior returns, there are also criminals promising to do the same.
In this environment, it might be worth remembering that it is better to deal with the devil you know than the devil you don’t. For all their faults, the big banks are licensed and there is recourse when things go wrong. Particularly in the aftermath of the royal commission and the formation of AFCA. In fact, there probably has never been a better time in history to be dealing with a bank if something goes wrong or you have a complaint.
Dealing with an unlicensed operator, however, means there is little that can be done when your life savings are stolen.
Over the years I’ve seen a number of financial services professionals become victims of scam artists posing as referral partners and business associates but who were in fact unlicensed criminals. ASIC is of little help when it comes to these matters, as they can only go after those who are licensed.
When it comes to scammers, the police need to be involved and that becomes a long and difficult process. Victims of financial crimes committed by unlicensed con artists rarely recover their money.
Once you’ve handed it over, it’s as good as gone.
Beware: your hunger for investment returns, coupled with a mistrust of the banks, is the perfect attitude to drive you into the hands of unscrupulous scam artists.
If you want to see the real scammers, take a closer look into small cap stocks on the ASX. Scammy IPO’s, lifestyle directors bleeding the company dry of funds, pumps and dumps, dubious related party fees. Imagine being paid 6% of funds raised too, not a bad gig. All this is overseen by the ASX and ASIC of course.
In this environment, it might be worth remembering that it’s better not to deal with businesses that have failed their clients so broadly. As for scammers the most expensive financial adviser in Australian history worked for Westpac and costs them about $23 million in fines. Never been a better time!
“Yea Right” is spot on….What a load of %$#$….saying “better to deal with the devil you know, than the devil you don’t” because the Banks have deep pockets says a lot about individual financial planners. the advice landscape and their desire to self regulate.
Given the negative reaction to Mr Yea Right… it certainly points to the death of independent advice in Australia and the majority of planners being linked to some Bank owned license.
This is further evidence of why so much of the effort to improve the client experience is wasted. Obviously, suitably qualified advisers should be a given, but the problem, as this example clearly indicates, is that the public can’t distinguish between the qualified professional and the crook and, obviously, don’t even know what questions to ask. It’s the age old story; laws only control the law-abiding.
Are you allowed to use the words banks and criminals in the same sentence or in this instance headline. It does have a familiar ring to it.
This is a really good example of what clients are paying for when they are in a trusted advice relationship – their life savings are being protected and managed to achieve their family objectives. Given the examples of scammers where they lose everything ( can you imagine that ? ) it highlights the risks exposed by overregulation and an unlevel playing field. The highest selling book for 2019 was the Barefoot Investor. Clearly this guy is in the business of selling books and can say whatever he likes. We had a client close their insurance policies recently because they have been encouraged in the book to take control and do it themselves ? I read the book while I waited for my plane to depart over the holidays ( didn’t pay for it – no need – the book was that simplistic it took less than 20 minutes to read ). If this client dies or has an accident – who is held accountable ? Noone. The family are left with nothing and the book sales continue. When you are next at the airport, have a free read of the book and the claims of this self declared expert on everything. Surprising that he does not explain that he lives his lifestyle based on the profits from the book ( even though he hypocritically claims that advisers exist to profit themselves only ) and that he does not recommend borrowing the book from a friend or read it at the airport to save costs and avoid profits supporting his lifestyle.
Scott Pape, the author has/had a financial services licence which he handed back / has handed back, to become a financial counsellor. Yes, his insurance advice is well below par in my opinion as well. The trouble is that some of the other advice is very good and the mixture of good and bad and very convincing advice appears to me to be quite toxic as very few would be able to distinguish good from not so good.
I hear Sam Henderson is going down the same path.
AFSL 302081 for Scott Pape (Publishing One) is still current and enables him to give general advice. As an Adviser, I have no great love for the guy, but get your facts right please. He has not “handed back” the AFSL. You just made that up.
General Advice – how can two words that are so contradictory be put together yet alone be allowed by an AFSL ?
Um, how can that be allowed by an AFSL is that your question? The answer is…the Corporations Act 2001 as supplemented by the Regulatory Guides. Y’know, that law type stuff Hillbilly.
@Calling this, you’re clearly a $@## wit. It’s a comment by John Jones, questioning “how could this be done”. You’ve added nothing to this and it would be appreciated you stop wasting time, so would you please $@#@ off.
@Calling this Your response is typical of a lawyer or technician. Rather than understanding the context behind the comment you go straight to the technical argument and assume you are of a superior mind ? Your surname is not Hayne by chance ?You share the same arrogance. Do you guys have any friends in the real world that pull you down from your high horse ?
i would suggest some of the things he talks about go beyond General Advice
How about an example of those “things”? Or is this just a vague statement intended to disparage the person concerned?
An example? How about this…”The chief executive of Hostplus, David Elia, told the commission that its funds under management had surged $2.5bn over the past two years because fans of the popular book The Barefoot Investor, had taken author Scott Pape’s advice and invested in the Hostplus Indexed balanced fund, because it has a tiny management fee…” as reported here https://www.theguardian.com/australia-news/2018/aug/18/superannuation-scandal-four-steps-to-ensure-youre-not-being-ripped-off
Regardless of whether he intentionally goes beyond “General Advice”, his readers perceive it as personal advice and act on it regardless of their individual circumstances.
This is the big flaw with the “General Advice” provisions of the Corps Law. It assumes that consumers understand the difference between General and Personal advice. They don’t. Even when a “General Advice warning” is given, consumers ignore it like they do with most legalistic gobbledegook. To consumers it’s all just expert financial advice. Consequently “General Advice” has become a legal loophole for dodgy advice. It needs to be banned.
Agreed. As an Adviser I would prefer something like “financial information” as a phrase over ‘general advice’ as then its pretty clear we are not giving advice. However, we have the law as it is currently written to deal with.
Common theme is to pick up on criticism of banks and financial planners and then send a message mixed with truths and spin. The workings of con men.
Yes, no coincidence that the loudest anti-bank voices are also the biggest scammers; the union (with known criminal elements intact) running the morally corrupt industry super ponzi schemes.
The regulator and police need to be on the job and not wait till the $$$$s have disappeared. past history clearly shows the scammers have plenty of time to steal and clear out with little or zero compensation and likely get away scott free. Time for enforcement to be strong and quick.
The reality is that once the money is gone it is gone so there is nothing the police can do to compensate the victim. Direct marketing, TV ads, call centres, book sales, internet calculators etc are all unregulated and provide opportunities to mislead and manipulate.
Spot on James. The RC has shown there are many thing wrong with regulated financial service providers that need to be fixed. But at the end of the day, those things are minority issues (in spite of media distortion to the contrary). And they are being fixed. The unregulated alternatives are far worse. Unfortunately the mainstream media and kneejerking politicians are actually herding consumers towards the worst scammers, spruikers, and high risk alternatives. Like a fake lighthouse directing ships onto the rocks.
This is becoming increasingly clear in financial advice where the regulatory focus is purely on restricting and culling licensed advisers. Meanwhile unlicensed accountants, real estate agents, mortgage brokers, book authors, “journalists”, property spruikers, online advertisers, call centre operators, and “roboadvisers”, are free to give as much dodgy financial advice as they like. Consumers will be much worse off as a result.
Is this a serious article? So only banks can be trusted with peoples money, there are no alternatives to the banks? Im hoping this is a comedy piece, if not that actual clients dont read it. Im assuming the writer has never worked for a bank so dosent understand the inner workings. Im also assuming the writer hasnt invested much if thier own money before . There are two aims to maximise shareholder profit they are shaft clients and shaft staff, this is how banks work these days. Use the bank as if they stuff up you are covered…mmmmmm alrighty then…next.
Scammer at work here? 🙂
I actually thought the same thing ! How about a royal commission in to industry funds. Lets see the ponzi scheme be revealed. This a an article aimed at scaring people in to only deal with banks. I think this article was just a stocking filler.