Having done nothing positive for us over the past few years we would like to see them acting positively in our interests now. Unfortunately, from these responses it seems they will not be looking to canvas our views regarding extending the moratorium and nor are they pushing hard to get things resolved in our best interests.

Answers supplied by Stewart Lockhart, Corporate Business Manager, Covenant Trustee Company Limited

Question 1.  Matrix Funding are charging $27,000 per month, and have only recovered 37% of principal so far.  What staff do they have, and how is this $27,000 per month justified.  As shareholders we have a right to know, and should be given a breakdown of costs.

Answer:      The management fee was appropriate at the time the moratorium was entered into in August 2009. Indeed,  it compared very  favourably with other moratoria, and the receivership option.

Question 2.  Will Covenant as Trustee be automatically extending the moratorium for 12 months, or will you allow shareholders a vote on whether or not to extend it.  If you are extending it what level of fees do you think are justified?

Answer:   Regarding the management fee , in March this year Covenant  met with Orange and amongst other things we  discussed an  adjustment to the management  fee. The fee reduction discussions have not been concluded yet.   In March this year  Covenant also had initial discussions to extend  the moratorium for a further year as from 31 July 2011 .The Company expects to have paid 42 cents in the dollar principal by 31 July 2011. (see the moratorium report dated May 2011  for further details.) The decision to extend the  moratorium will be made in July this year, and at that point,  an announcement will be made to the debenture holders. You may  recall the terms of the moratorium which commenced in August 2009   -  that  the trust deed does not require  a further meeting  of debenture holders to give effect to an extension to 31 July 2012.

Question 3.  If the Moratorium is extended a further year until August 2012, and the full amounts have still not been recovered by then, what is the outcome for shareholders regarding monies still to be recovered, possibly still a further 4 years away?

Answer:  if the moratorium is extended to 31 July 2012, and at its conclusion  there should be  debenture holder moneys   outstanding  the options to consider will be  a further moratorium or to appoint a receiver.

DO NOT accept this offer.

Reviewing the recent report is further gloomy reading for investors.

The moratorium was implemented in August 2009 and now in Feb 2011 we have the following facts:

37% of the principal has been repaid – but the rest of the money is a long way off, up to five years away.

Is it what you expected from your 2 year moratorium?

Remember that Somers-Edgar’s Matrix Funding is being paid $27,000 per month yet they are clearly failing to deliver. Does that surprise anyone?

What skills NZ Funds will pass on to the industry are unknown – but if others adopt the historic financial management techniques of NZ Funds owners we have serious concerns for investors in New Zealand.

Mr Siddall & Tills, the ultimate owners of NZ Funds, were beneficiaries of trusts that made many millions of dollars through First Step – a scheme which lost millions of dollars of investors money and was plagued with multiple levels of inter-related transactions with little independent oversight.

Incredibly the IFA now holds these two individual’s company up as a beacon for the industry – yet neither of them have ever fronted up to explain how such apparently safe investments turned so bad.

If you find that appointing NZ Funds as Professional Development Advisors is an affront to the losses and pain you have suffered please write to Peter Lee, Chief Executive, IFA, peter@ifa.org.nz.

Read more about these Siddall & Tills here http://www.stuff.co.nz/sunday-star-times/business/3016690/Old-school-tennis-champs-NZs-hidden-money-men

Archives / Taking Stock /  3rd February 2011.

 http://www.chrislee.co.nz/index.php?page=newsletter-display&list=2&month=February&year=2011

He clearly demonstrates that “First Step” was a house built on sand.

The lawyers cleverly constructed the foundations to protect the few who made millions but inevitably it failed due to its poor lending practices and lack of capital.

It is a sad indictment of New Zealand that three individuals can make ten’s of millions of dollars at the expense of investors – yet suffer no official sanction.

They would legally be entitled to launch the same scheme again today!

Those that fail to learn from history, are doomed to repeat it. - Winston Churchill

This is a positive result for the many people who have lost millions through the dreadful products promoted by Money Managers.

However, we note that:

• not once has anyone associated with Money Managers offered an explanation or apology
• the sales agents who blindly promoted these products are reforming as individual investment businesses.
• they will still be associated with NZ Funds products – a business owned by Siddall & Tills (shadowy millionaires who profited handsomely from some of the failed Money Managers products)

Our advice remains the same. These agents failed to protect investors interests in the past so let the buyer beware!

Check out this story for an amusing take on things http://www.goodreturns.co.nz/article/976497358/mmg-advisers-glad-to-be-moving-away-from-the-brand.html – be sure to note the lack of humility.

And what does this quote say of past practices “Now we’re fee-based there’s no conflict of interest and it’s better for the client as it’s more transparent”!

Time will tell what brands they have established as most have done little for their clients these past years.

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Help us keep track of the former advisors by recording their new businesses here http://moneymanagersactiongroup.org.nz/the-phoenix-agencies/

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The legal answer is no, Money Managers has been liquidated and MMG is a new legal entity.

Like a phoenix, MMG has risen from the ashes of Money Managers but here are some things about MMG you may wish to consider:

• MMG employs many of the same advisors who sold people into the defunct products listed on this site (see the people page). They profited from selling these schemes yet failed to anticipate the schemes’ demise.
• MMG have as beneficial shareholders Mr Somers-Edgar, Mr Siddall & Mr Tills. These three individuals profited from First Step and now stand to profit from MMG
• Except for in respect of DNZ, no-one from MMG has ever sought to organise action on behalf of clients to help recover money lost from the failed investments listed on this site.
• MMG promotes funds established and run by NZ Funds Ltd – an entity owned by MMG owners Siddall & Tills.
• MMG claim in their disclosure statement that  ”MMG was established in 1986.” The Companies Office shows MMG as being formed in May 2008. So they claim the longevity of Money Managers but not the legal liability! MMG_Corporate_Disclosure_Statement.
• MMG have received commissions from the First Step scheme despite millions being written off investors balances.

In summary, if dealing with MMG, “let the buyer beware”.

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MMG Fees

Interesting story in the Sunday Star Times (29/8/10) about MMG’s new fee structure.

Apparently they have dramatically increased fees charged so that they can come to 4% of the portfolio value.

With these fees, to beat the bank rate you need to make around 9%.

But what risks are being taken to get that type of return?!?

Here is an easy way to sleep easy with your retirement nest egg – put it in the bank (preferable a couple of them!).

Firstly, the Serious Fraud Office has First Step on its radar read it here -

And then we read the Commerce Commission is making inquiries as well read it here.

Lets hope that they make progress on our behalf.

We are an organization for clients of Money Managers who have suffered financial losses over the past few years and are looking for advice, support and direction on how to seek redress for the losses to their retirement nest-egg.    

Money Managers was a New Zealand based, franchised network, of sales agents who promoted mainly in-house investment products to vulnerable retired citizens.    

We are researching the actions of Money Managers, along with the actions of those who developed and ran the schemes it promoted.    

Click to join

Our members share similar stories of trusting their Money Managers sales agents without reservation. However it has now been revealed that the recommended investments were entirely inappropriate for them.    

Very conservative investors have discovered their retirement savings were used to fund a used car finance business or to finance developing geothermal projects.    

As a Group we are investigating where customer’s retirement money was invested, inquiring whether it was in accordance with promises made by sales agents and pressing for recompense where a suitable case can be established.    

By joining the Action Group members share a common purpose – working together to get their retirement savings returned.    

Our organisation has investors who have lost money on the following schemes:    

• First Step
• DNZ Property
• Cash Plus
• First Masterfund
• Orange Finance Ltd
• Orange Insurance Ltd
• Totara Funds

Please add your story to the site so others know they are not alone.    

Click on http://moneymanagersactiongroup.org.nz/our-stories/