Money does not grow on trees!
- Arnold Shields
- Sep 10, 2011
- 3 min read
Updated: Jun 12
Over the past two decades, many Australians were lured into Managed Investment Schemes (MIS) in agribusiness, such as Timbercorp, Great Southern, and Palandri—with promises of high returns from olives, grapes, almonds and other plantation assets.
When these schemes collapsed, investors were often left with:
Worthless assets
Significant debt
Confusion over how it all went wrong
In many of these cases, our expert opinion has been sought to determine whether the advisors and product issuers met their professional obligations.
Key Issues in Failed MIS Investment Advice
1. Personal Advice vs General Advice
Advisors often received commission payments from MIS operators or related entities. While legal, this creates a potential conflict of interest, especially when the advisor steers a client toward a specific investment.
If the advice focuses on a particular MIS for a specific client, this may constitute personal financial advice—bringing with it a much higher duty of care under Australian law.
2. Due Process (or Lack Thereof)
We regularly see cases where a Statement of Advice (SOA) has been provided, but the actual steps taken to assess suitability are undocumented or unclear. Critical conversations and evaluations may not have occurred at all.
3. Poor Quality SOAs
Common flaws in Statements of Advice include:
Generic or irrelevant paragraphs
Internal contradictions
Lack of support for financial projections
Inadequate disclosure of fees or risks
Overuse of fine print and technical disclaimers
These documents often protect the advisor—not the investor.
4. Misleading Focus on Tax Benefits
Negative gearing was a major selling point in many of these MIS investments. However, the true cost, ongoing out-of-pocket expenses with no immediate returns, was rarely explained clearly.
Tax deductions were touted, while the risk of capital loss or speculative income was downplayed.
The Problem with Product Disclosure Statements (PDS)
Although legally required to present all material facts, many PDS documents:
Are overly long and dense
Contain marketing-heavy introductions
Bury critical risks, withdrawal limits, and fee disclosures
Repeatedly refer readers back to their financial advisor
An unsophisticated investor would struggle to identify key risks, much less make a truly informed decision.
Advisor Responsibility: Beyond Repeating the PDS
It’s not enough for an advisor to simply hand over a PDS. A competent advisor should:
Clearly explain how the MIS operates
Highlight the risk of loss, liquidity limitations, and the role of related-party transactions
Clarify that investors often do not hold any interest in the operating business, only the plantation land
In many MIS cases, plantations were young and required years of fees without income, while supply agreements, if any, were confidential and unverifiable.
Investor Liquidity and the Illusion of Exit
MIS investments are notoriously illiquid, often locked in for decades with no secondary market.
Promises of future capital gains or reliable income, especially when not backed by accessible documentation, may border on misleading conduct.
Independent Expert Opinions Can Help
Each MIS case is unique. At Dolman Bateman, we bring forensic and accounting expertise to:
Assess whether the advisor met their legal obligations
Review the timeline and completeness of advice
Examine the SOA and PDS in context
Evaluate the commercial viability of the MIS investment
Determine if investors were misled
Need an Expert Opinion on a Failed Investment?
If you or your client invested in an agribusiness MIS or any investment that turned sour, we can help you understand what went wrong, and whether someone should be held accountable.
📞 Call us on 02 9411 5422 or book a meeting below.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
