Reluctant champion takes finance companies to task

JOHN COWPLAND/Sunday Star-Times

RELUCTANT CHAMPION: Threats only increase the motivation of Suzanne Edmonds, a reluctant champion of the small investors suffering from the finance company collapses who has founded the group, Exposing Unacceptable Financial Advice.

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Anybody inclined to underestimate Suzanne Edmonds, founder of ginger group Exposing Unacceptable Financial Advice, should consider the weekend she endured in the run-up to last Monday's roadshow in Orewa, north of Auckland.

Less than 48 hours before the meeting began, her husband suffered a massive heart attack. The following day her brother, Gray Eatwell, was hospitalised after crashing his farm quad bike.

Despite the two incidents, Edmonds, a lightning rod for finance company victims, still took the stage, determined that nothing would stop the work of the group, which wants to galvanise the thousands of people who have suffered at the hands of incompetent financial advisers.

That determination belies her appearance; a little short and a little mumsy, a talker, though not the most convincing of public speakers.

It's something Edmonds is aware of. "I hate being underestimated," she says.

"I don't mean that arrogantly. I am intelligent, but some people do underestimate me because I don't have maybe the right delivery, or my grammar may not be right, or whatever, they will criticise me, but they don't recognise that I am a very strong person."

Some of that tenacity is in her genes, she reckons. She's the third cousin of outspoken Kapiti Coast financial planner Chris Lee, who has been a staunch critic of badly run finance companies. Her brother, Eatwell, battled for years against the Bank of New Zealand over the failure of his business ventures - a saga he presented in his book You Can Bank On It, the second edition of which was republished in February last year, endorsed by All Black Colin Meads.

"I'm not easily intimidated. I don't know if it's because I am short and I have needed to stand up for myself, but when people attempt to intimidate me, it kind of gives me a drive, and I have had a few threats."

She's having to draw on some of that strength now. "People jokily say to me: 'I hope you are looking over your shoulder', and that kind of thing. It doesn't really frighten me at all."

Money, she says, is not her agenda. She and her husband, who live in the upmarket Auckland suburb of Remuera, do not need to work, she says.

By this time next year, the 50-year- old Edmonds hopes she won't be working as hard, and that EUFA, which is doing its best to sign up fee-paying members ($120 a year), will be self- sustaining and not need as much of her time.

Advocacy has been a hallmark of her career though, and perhaps it has become a habit. She was electorate secretary for Winston Peters during the Winebox inquiry. As head of Age Concern in Tauranga in the 1980s she battled (successfully) for a $1.3 million compensation package for about 100 elderly people ripped off by a rogue office of US accounting giant H&R Block. Then she was a founder of the Bank Customer Action Collective, set up as a result of her brother's battle with the BNZ.

But despite her experience and expertise, her vocation is a tough one.

"I don't enjoy it. It's hard. I have sat in lounge rooms with people who fought in the war and had their money taken off them by financial advisers who defrauded them and grown men crying, older men, who had lost eyes and legs and arms in the war.

"We have had people in this country who have done it all right, they have been good citizens who have done everything asked of them, and they have lost it all to a totally crooked system, a system that is out of control."

Edmonds says her experience has shown her what many do not truly believe, that financial wrongdoing really, really matters. One billion at risk in finance companies isn't just a number. It means miserable retirements, deteriorating states of health, strong, dignified men and women who have done what was asked of them by society all their lives, reduced to tears.

"I've known one man who did commit suicide, and another who tried."

EUFA has two key roles: putting wronged investors in touch with each other, and getting politicians to take the subject seriously.

The first is relatively easy, creating sub-groups of people who have invested with the same finance company, or through the same adviser.

It won't be taking class actions, though it will take part in negotiations where needed, says Edmonds, who has participated in talks with Vestar on its proposals to make good the losses of clients whose money it invested in the likes of Bridgecorp and Capital + Merchant.

The second aim is harder, although doors have opened as politicians realised Edmonds was winning the ear of the media.

Edmonds has had discussions with Commerce Minister Lianne Dalziel, initially pushing for a public inquiry, but that call has morphed into the idea of a taskforce which could hear complaints, and perhaps even a government fund to help victims who could not afford to take legal action.

While that might sound optimistic, Edmonds reckons that the failure of this and previous governments to regulate advisers (regulations are now on the way, but won't be fully enacted until 2010) makes politicians from all parties culpable.

"In 1990 both National and Labour promised to clean up this industry, and they didn't," Edmonds says.

"They have failed people."

Without help, many will get no justice, she says. Most advisers do not belong to a trade body with a disciplinary procedure, or restitution mechanism. Most do not have professional indemnity insurance. The courts are costly and proceedings can take years, whether brought by individuals or in a class action.

"I think the government has an obligation to help."

But she says the idea of the taskforce is a new one. "It needs a lot of discussion, and it needs to be fine-tuned."

That fine-tuning can take place over the coming weeks of the roadshow.

One thing EUFA isn't after is revenge, she says. "I think recovery is what people want more than anything. I don't agree that people want advisers shamed, but they do want them held responsible."

EUFA also has a role to play in giving a voice to victims she says have been verbally abused.

"These people weren't greedy. They weren't stupid. They were just trying to do the best for themselves."

They had every right to trust financial advisers, she says, and should not be abused for it.

- © Fairfax NZ News