Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 265

Cuffelinks Newsletter Edition 265

  •   3 August 2018
  •      
  •   

Next week, as the Royal Commission turns to superannuation, it will join a conga line of regulators and commissions uncovering the industry's secrets. We had the APRA Prudential Inquiry into the Commonwealth Bank, the Productivity Commission Review of Superannuation, and ASIC Chair James Shipton said he plans to target financial advice with more consumer testing, shadow shopping and on-site visits. At the FSC Conference, he added:

"There needs to be a wholesale review of conflicts of interest in firms, sectors and markets to identify, manage and if appropriate, remove every single conflict of interest. There does not appear to be a single example of a strategic plan that articulates the principles of engagement with regulatory agencies."  

Productivity Commission Deputy Chair, Karen Chester, said she was shocked by the poor quality of data and comparing fund performance "nearly killed three team members". 

It feels like a 'now or never' moment for the wealth industry. On one side, there are more public resources than ever digging into the value chain. On the other side, billions of dollars of payments are entrenched in the system. My best guess is the latter will win. As Karen Chester told the FSC, "When things are overlapped and murky, accountability goes out the window."

This week, Kevin Bungard explains why the PC Report has gaps in its analysis of SMSFs, and the ATO issues warnings to SMSF trustees and a series of checklists for good fund management.

Meanwhile, the real stuff of investing ...

Roger Montgomery sees little merit in the Nine takeover of Fairfax, bringing two struggling industries together. My daily breakfast routine of coffee and toast while reading printed copies of The Herald and The AFR looks doomed in the medium term, and the reduced diversity of ownership of media means more people must support independent voices and the ABC. 

One of Australia's leading economists, Don Stammer, shows why the Aussie dollar has held up reasonably well, Ashley Owen takes a swipe at large companies wasting capital and Kurt Winrich gives three vital characteristics of great companies. Erik Weisman says industries are increasingly becoming winner-takes-all.

Elsewhere, Jeff Gebler reveals the vast difference between what people say they want when questioned by financial advisers, and what they actually do in their real lives.

This week's White Paper from Vanguard is a study of indexing and active management, and researches the most common criticisms of indexing. Well worth a read, as well as updated reports in Additional Features below.

We are changing the way we publish articles on the Cuffelinks website. New content will be added regularly during the week, not only at the time of the newsletter. It's worth checking more frequently for new articles on asset allocation and understanding of markets. Articles often have new comments added, such as the high quality franking credits debate here and here.    

Graham Hand, Managing Editor

 

Edition 265 | 3 Aug 2018 | Editorial|Newsletter

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

Welcome to Firstlinks Edition 627 with weekend update

This week, I got the news that my mother has dementia. It came shortly after my father received the same diagnosis. This is a meditation on getting old and my regrets in not getting my parents’ affairs in order sooner.

  • 4 September 2025

5 charts every retiree must see…

Retirement can be daunting for Australians facing financial uncertainty. Understand your goals, longevity challenges, inflation impacts, market risks, and components of retirement income with these crucial charts.

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

Super crosses the retirement Rubicon

Australia's superannuation system faces a 'Rubicon' moment, a turning point where the focus is shifting from accumulation phase to retirement readiness, but unfortunately, many funds are not rising to the challenge.

Latest Updates

Investment strategies

Why I dislike dividend stocks

If you need income then buying dividend stocks makes perfect sense. But if you don’t then it makes little sense because it’s likely to limit building real wealth. Here’s what you should do instead.

Superannuation

Meg on SMSFs: Indexation of Division 296 tax isn't enough

Labor is reviewing the $3 million super tax's most contentious aspects: lack of indexation and the tax on unrealised gains. Those fighting for change shouldn’t just settle for indexation of the threshold.

Shares

Will ASX dividends rise over the next 12 months?

Market forecasts for ASX dividend yields are at a 30-year low amid fears about the economy and the capacity for banks and resource companies to pay higher dividends. This pessimism seems overdone.

Shares

Expensive market valuations may make sense

World share markets seem toppy at first glance, though digging deeper reveals important nuances. While the top 2% of stocks are pricey, they're also growing faster, and the remaining 98% are inexpensive versus history.

Fixed interest

The end of the strong US dollar cycle

The US dollar’s overvaluation, weaker fundamentals, and crowded positioning point to further downside. Diversifying into non-US equities and emerging market debt may offer opportunities for global investors.

Investment strategies

Today’s case for floating rate notes

Market volatility and uncertainty in 2025 prompt the need for a diversified portfolio. Floating Rate Notes offer stability, income, and protection against interest rate risks, making them a valuable investment option.

Strategy

Breaking down recent footy finals by the numbers

In a first, 2025 saw AFL and NRL minor premiers both go out in straight sets. AFL data suggests the pre-finals bye is weakening the stranglehold of top-4 sides more than ever before.

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.