I used to be a listener to Radio Pacific in the mid 1990s and avidly tuned into little Dougy Sommers Edgar and Muriel Dunn, after him - I was as virginal as a wee white pup with a condom on in those days in terms of financial acumen (I would say I have still much to learn on the subject) and continued to tune in to listen to some of the hard sell from the lovable two. I just wanted to listen to stuff about investing on the wireless and these guys were just about the only thing going.
I never invested in anything they were selling, it all sounded too good to be true and as it turned out it was - most of what they advised clients to invest in no longer exist.
Most of use know the Dodgy Doug quickly divested his stake in the dodgy Money Managers that he ran (although there is some speculation as to remaining financial ties) but whatever happened to the hopeless Muriel Dunn?
Read on dear readers.
My memory of those shows and Muriel were piqued over the last few days when news of directors of Dominion Finance were being charged by the Securities Commission over fraud connection to their business.
Muriel used to advise her Radio listeners and clients, in her breathless excited way to put their money in Dominion because it was "safe" and provided investors with a return above the normal boring term investment. Most of Muriel's callers were trusting retired folk.
Muriel believed in diversified investing though!
Yep, along with Dominion Finance she also advised clients and listeners to put their money into other finance companies as well; Five Star, Bridgecorp, Bluechip and a whole host of other finance companies as well. Of course we know that they no longer exist, they all collapsed in a heap of inter-party lending, quintuple entry bookkeeping and misleading advice to investors.
Muriel Dunn clipped the ticket along the way and her clients were left penniless thanks to her incompetent advice.
Here is Muriel complaining to the Advertising Complaints Authority (ASA) about a comment made by Sommers Edgar re her ticket clipping (ironic I know but read it, it will make you laugh) on his Sunday show:
During the programme Mr Somers Edgar made the following remarks:
“Around New Zealand at the moment there are a lot of financial advisers saying exactly the same thing - take your money out of certain funds and reinvest into something else and obtain another fee for this.
The Financial Advisers industry in New Zealand is in dire straits. One of the best-known people in the industry said to me only last week - “there are so many financial planners in New Zealand who are doing it really tough. They expect two things to happen. A number of financial planners will leave the industry and there would be one, or two or three or more, exposed, stealing from clients, as they are so desperate and in financial difficulties, and the evidence of it is - they say, “move your money around and we will take a fee”.”
Ms Dunn Replied:
"As one of the longest standing financial planning practices in New Zealand and the senior woman certified financial planner, and a regular presenter on Radio Pacific (Monday afternoons after Mr Somers Edgar’s Sunday morning programme), I strongly object to Mr Somers Edgar’s statements re financial planners and the financial planning profession.
I dispute that anyone is entitled to make the statement made by Mr Somers-Edgar even if it was not an advertising/promotional, paid for programme.
As a long standing and well respected Certified Financial Planner, I personally feel defamed by the statement broadcast and I know many other financial planners feel the same.
We are all working hard to educate the public of the merits and additional security that they should benefit from by using members of a world wide well respected body such as the International Association of Financial Planners.
We comply to a strict code of conduct and ethics to maintain standards and protect and educate the public. To have someone broadcast a statement suggesting that we (financial planners) will, before long, be stealing from our clients/investors is completely abhorrent.
Mr Somers-Edgar has been in business and running his one hour broadcasts for a very long time. He is not an inexperienced, or naive youngster, who may inadvertently have uttered a few careless words.
I request that this complaint be vigorously pursued by the Board."
Impeccable traits in a financial adviser and so well defended.
The complaint was surprisingly upheld :
The Board ruled that the hyperbolic and exaggerated nature of the claims made in the Money Managers advertisement would be likely to confuse consumers and play on fear, and accordingly it was also in breach of Basic Principle 3.
Even after having taken into consideration the submission from the Advertiser, Money Managers, the Board was still of the view that the content in the advertisement was in breach of the Advertising Codes.
Doug was right! Muriel was misleading investors and clipping the ticket along the way (he of course was doing the same) but the ASA said that Doug couldn't say what he said because it would "confuse consumers" and "play on their fear".
Avoid at all costs if you want to keep your money.
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