Four Corners last night included a visit to FNQ for a story on the troubled LM Mortgage operations:
JAMIE DURIE, LM INVESTMENT SPOKESMAN: Offering a global pathway to
these burgeoning Australian investment opportunities is LM Investment
STEPHEN LONG: With the celebrity gardener Jamie Durie as its chief spruiker, LM is expanding worldwide.
But back home, some of its clients aren't doing so well.
Danny Maher is a financial planner from Cairns.
(Driving with Danny Maher) So you're pretty much involved in a salvage operation on behalf...
He's trying to salvage the lives of people convinced by another advisor to put their money in a fund run by LM Investments.
(to Danny Maher) How much has been lost in these mortgage trusts up here?
MAHER: Oh look, it's hard to quantify. I
know of one trust, the LM First Mortgage Income Fund, that there's about
20 million dollars worth of exposure here in the Cairns and Far North
STEPHEN LONG: Twenty million in this area? That is huge!
MAHER: Well it's quite a sizeable fund and some of these people...
Unfortunately, they are mainly retirees and it is their livelihood.
They've lost their life savings.
STEPHEN LONG: We drove north from Cairns to meet one of those people.
a retired cane cutter, the son of Italian immigrants, and he's lived
for 45 years high up in the hills between Cairns and Mossman.
The fund once held close to $1 billion in assets so it's uncertain to what extent FNQ may have been over-represented among investors. A decade ago when KS ventured for an episode in financial planning he had cause to have a closer look at LM mortgage funds and had some concerns that it was perhaps riskier than thought by both advisors and investors.
It was however included on the product lists of large planning groups at the time, including Commonwealth Bank. CommBank was also the banker to LM. Michael West at the Sydney Morning Herald covered the LM story last year.
The Far North has had its share of casualties in recnt years including Storm Financial, CEC and Hedley with significant wealth destruction. It is recalled some years ago an ASIC representative before a parliamentary committee commented that they found surveillance more difficult the more distant from the capitals and cited FNQ as an example.