We are not happy with the financial advice we received

Q.  You mentioned briefly on Sunday 13th July, MFS formerly Octaviar now managed by Wellington.

We are moderate risk investors and have found ourselves through our SMSF having a $50,000-00 holding in the above, not good from what we hear. Lonsec are employed by our financial advisers and supposed to have comprehensive research data to help formulate tailored plans.

We have been told the three scenarios are full recovery 65 cents, going concern with no recovery 45 cents and liquidation of the fund by 31/3/09, 14 cents. Any further information would be greatly appreciated.

A. Unfortunately, I cannot give you guidance as to which way you should go with this investment as my license will simply not allow me to do that.

Lonsec are a reputable organisation, and I hope I don’t insult, but over and over again, investors put too much faith in the recommendations made by stockbrokers, financial planners and the like.

They seem to think we have a crystal ball that works.  We are humans, act in good faith, but when the investment is executed, the reality is that we have outsourced it to a third party.  We can’t control mismanagement within corporations,  the world economy, politics, foreign conflict etc.

No doubt, Lonsec  would have undertaken comprehensive research and made the recommendation in good faith.  I am also fairly confident, they would now prefer they didn’t.

I just hope that you have a diversified portfolio and your $50K holding in Octaviar represents a small percentage of your total assets.    I also hope Wellington manage to sort out the mess and you don’t lose too much of your hard earned savings.

There is a great book I read every few years called ‘Where are the customers yachts (or a good hard look at Wall Street)’ which is an entertaining and great read.   Cheers and wishing you lots of luck.  Josie

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