Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 249

Cuffelinks Newsletter Edition 249

  •   20 April 2018
  •      
  •   

Mea culpa, it's worse than I expected. In August 2016, I wrote 10 reasons why a Financial Services Royal Commission was not necessary, but Kenneth Hayne and his team have taken discovery of malfeasance to a new level. Among other factors, I thought actions by ASIC and various reviews would uncover wrongdoings and lead to change, but a sledgehammer was required to break through to the facts. The consequences will be far-reaching for wealth management.       

The Royal Commission is gripping viewing. I'm watching hours of it each day, not knowing whether to laugh or cry. The commercial channels should bid for the broadcasting rights over winter. It has everything: the forensic analysis and youthful confidence of bright QCs assisting the grumpy Commissioner; the hapless and bemused witnesses left out to dry by their superiors; and a script worthy of John le Carre with lies, deceit and incompetence.

So many lowlights. AMP giving 20 misleading statements to its regulator. The head of the financial advice business saying he had not "turned my mind" to thinking about adviser commissions. Charging financial advice fees but not meeting the client, with the Commission calling CBA the "Gold Medallist" in fee-for-no-service. An external "independent" board report for ASIC revised by AMP management through 25 drafts, including redacting the CEO's name. An executive unable to identify what he was apologising for. Using the ACCC acronym for the Advice, Culture & Compliance Committee. Counsel accusing a CBA witness of "dissembling" and "misleading". Really, you couldn't invent this stuff, and what a setback for vertical integration and financial advice!

The transcripts of witness interviews are here and videos plus the live webcast are here. Your comments on the Royal Commission are welcome on our website.

Not much Blue Sky now

On the subject of stuff ups, Blue Sky Limited (ASX:BLA) stumbles along while short sellers party, but Hugh Dive explains why shorting is not as easy as it looks. Miles Staude offers four rules to check when the current bull will finally run out of legs, while Tamar Hamlynoutlines the consequences for borrowing due to the recent rise in bank funding costs. 

Blockchain founder writes for us

The initial idea behind blockchain can be traced to 1991 when Stuart Haber and W. Scott Stornetta described a cryptographically secured chain of blocks. Dr Stornetta writes his first article for Australia in Cuffelinks. 

More on pensions and SMSFs

Our comments section often includes a high quality debate worth revisiting. In response to last week's lead article, some people argued that retirement is about living off income, not drawing down capital. Is that correct? We provide a case study on living off $50,000 a year and drawing a pension. Jon Kalkman also argues the case for tax-free pensions and receiving refunds, and Gemma Dale offers guidance on the merits of having two SMSFs.

Congratulations to Chris Cuffe on the 10th anniversary of his innovative Third Link Growth Fund which has now delivered over $7.5 million in donations to charities.

This week's White Paper from Vanguard Investments shows why core-satellite investing is a powerful approach to asset allocation. Our new feature below, NAB/nabtrade's weekly rate sheet on hybrids and listed bonds, is proving very popular.

Look out next week for a Special 250th Edition presented as an ebook, where over 30 market experts explain how a mistake made them better investors. Please invite your friends or colleagues to subscribe for free to receive these valuable lessons.

Graham Hand, Managing Editor

 

Edition 249 | 20 Apr 2018 | Editorial | Newsletter

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Which generation had it toughest?

Each generation believes its economic challenges were uniquely tough - but what does the data say? A closer look reveals a more nuanced, complex story behind the generational hardship debate. 

Maybe it’s time to consider taxing the family home

Australia could unlock smarter investment and greater equity by reforming housing tax concessions. Rethinking exemptions on the family home could benefit most Australians, especially renters and owners of modest homes.

100 Aussies: seven charts on who earns, pays, and owns

The Labor government is talking up tax reform to lift Australia’s ailing economic growth. Before any changes are made, it’s important to know who pays tax, who owns assets, and how much people have in their super for retirement.

The best way to get rich and retire early

This goes through the different options including shares, property and business ownership and declares a winner, as well as outlining the mindset needed to earn enough to never have to work again.

A perfect storm for housing affordability in Australia

Everyone has a theory as to why housing in Australia is so expensive. There are a lot of different factors at play, from skewed migration patterns to banking trends and housing's status as a national obsession.

Chinese steel - building a Sydney Harbour Bridge every 10 minutes

China's steel production, equivalent to building one Sydney Harbour Bridge every 10 minutes, has driven Australia's economic growth. With China's slowdown, what does this mean for Australia's economy and investments?

Latest Updates

Economy

Why we should follow Canada and cut migration

An explosion in low-skilled migration to Australia has depressed wages, killed productivity, and cut rental vacancy rates to near decades-lows. It’s time both sides of politics addressed the issue.

Investing

Simple maths says the AI investment boom ends badly

This AI cycle feels less like a revolution and more like a rerun. Just like fibre in 2000, shale in 2014, and cannabis in 2019, the technology or product is real but the capital cycle will be brutal. Investors beware.

Property

Australian house price speculators: What were you thinking?

Australian housing’s 50-year boom was driven by falling rates and rising borrowing power — not rent or yield. With those drivers exhausted, future returns must reconcile with economic fundamentals. Are we ready?

Shares

ASX reporting season: Room for optimism

Despite mixed ASX results, the market has shown surprising resilience. With rate cuts ahead and economic conditions improving, investors should look beyond short-term noise and position for a potential cyclical upswing.

Property

A Bunnings play without the hefty price tag

BWT Trust has moved to bring management in house. Meanwhile, many of the properties it leases to Bunnings have been repriced to materially higher rents. This has removed two of the key 'snags' holding back the stock.

Investment strategies

Replacing bank hybrids with something similar

With APRA phasing out bank hybrids from 2027, investors must reassess these complex instruments. A synthetic hybrid strategy may offer similar returns but with greater control and clearer understanding of risks.

Shares

Nvidia's CEO is selling. Here's why Aussie investors should care

The magnitude of founder Jensen Huang’s selldown may seem small, but the signal is hard to ignore. When the person with the clearest insight into the company’s future starts cashing out, it’s worth asking why.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.