A PORTLAND man who lost hundreds of thousands of dollars after investing in a high-risk venture may be the tip of the iceberg with fears that dozens of south-west investors have put their savings into funds which have collapsed.
Nanjing Night Net

Local investors have been warned to check their portfolio as it’s believed that a number of farmers and retirees in the region have put their savings into the high-risk funds without knowing the associated risks.

The Portland man, who did not want to be named, said he had falsely assumed finance industry regulations were enough to protect people who were not financial experts from unknowingly investing in high-risk products.

“I relied on the advice given to me by a financial advisor because, in my ignorance, I assumed that the full extent of the risk I was buying into would be made clear,” he said.

“It wasn’t. I never in my wildest dreams would have invested in a venture as risky as that, but I thought regulation of financial advisors would protect me and that’s what made me walk past the bank and down to the financial advisor.

“I pressed (the advisor) about the risk involved with each investment and he basically said there was none. I said: ‘is my money all right?’ and I was reassured that it was in no way exposed to the problems affecting the global finance sector.

“But the truth is I was investing in something that nobody who is financially literate would invest in. The only reason my money ended up where it did was because of the advice I received from my advisor.

“My advice for anyone thinking of going to a financial advisor is do not just assume that just because the advisor looks the part, with a fancy suit and a flash office, that they have clients’ financial wellbeing at heart.”

Slater and Gordon commercial litigation lawyer Jessica Latimer said in the course of the recovery process for the Portland client, the law firm became aware of dozens of other residents in the region invested in the same funds.

She said Slater and Gordon had become aware of a cluster of cases in and around Portland and Warrnambool where locals had invested in particularly high-risk funds, some of which had since been suspended or wound up.

“We’ve had enquiries from a former factory worker, who invested his entire life savings, and quite a few farmers who have retired and sold some or all of their land and put that money into these investments,” she said. “Another case involves a retired local business identity who invested the proceeds of the sale of their business.

“We’re talking about millions of dollars of people’s hard-earned money and it is possible they have invested large amounts in these funds without understanding the true risks they were dealing with.”

Ms Latimer said the law firm was dealing with a considerable number of enquiries from investors in the region who put money in the MFS Premium Income Fund or LM investment products. “While the PIF product disclosure statement identifies itself as being a high-risk fund, it is possible that these people chose to invest, or were advised to invest, in these funds without a full awareness of the risks associated,” she said.

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