Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 294

Cuffelinks Newsletter Edition 294

  •   22 February 2019
  •      
  •   

Last week's survey on your satisfaction with the Royal Commission drew an excellent 850 responses, and Leisa Bell summarises the results. Only 12% of respondents were 'very satisfied', showing some level of disappointment from the vast majority. However, 'somewhat satisfied' was a healthier 47%, giving an overall positive satisfaction of 59%. 

At the other end of the scale, 7.5% said 'not worth it' and 17% said 'below expectations' giving a negative overall of 25%. Perhaps the year of explosive evidence raised expectations. About 16% voted for 'average result'. Let's call the overall assessment a solid pass mark for Mr Hayne, as shown below.
  

Overall, are you satisfied with the recommendations in the Final Report?

 

Over 70% thought Hayne had erred in not addressing vertical integration, and a massive 87% thought both individuals and companies should be prosecuted more. They should be reassured by ASIC's actions since the Royal Commission, including Chair James Shipton at Senate Estimates this week. When Senator John Williams pointed to previous weaknesses and asked, "Has ASIC got the message that the expectations of the Australian people are that you are to lift your game?", Shipton replied, "Loud and clear, Senator, loud and clear."

Relatively few people expect to change financial services provider as a result of the Commission. The survey received too many comments to publish them all but we have a large selection here

Franking credit debate motors on

Last week's article on the basics of franking credits has received a near-record 138 comments so far. We reprise the article so you can read the feedback as politicians and media continue to run hard on the subject. Chris Richardson of Deloitte Access Economics told 7.30 on Monday:

"I think the tax benefit should be there but it is being rorted, and rorted on an industrial scale ... Now, that is a basic description of the superannuation system in Australia: lots of Australian shares, low rate of tax."    

However, he was critical of Labor's solution:

"Given the way they're doing it, they're fixing one fairness problem [which] is costing more money than it should ... But they are creating some new fairness problems for some retirees at the same time. There are still a bunch of people who I think will be unfairly treated."

A policy is inefficient if it has different impacts when super is held in an industry fund, in an SMSF, by a pensioner, by a pensioner on 28 March 2018, or in a wrap with mainly pension assets.  
 
Damien Williamson gives a worked example of an SMSF with excess franking under Labor's proposal switching to another asset to maintain income.

In other investment news ...

Charles Dalziel says investors must know whether their fund manager is truly playing a long game, while Roger Montgomery warns of the consequences of the debt deleveraging that is underway in Australia. The economy slows when we don't buy as much stuff.

Ilan Israelstam reports on global Exchange Traded Funds and how Australia has a long way to catch up on the global penetration, and Ben Chong identifies three tech trends which might not be as popular as some we have seen in the past.

Still on ETFs, the White Paper from Vanguard summarises 2018 trends. The remarkable rise of fixed income and global equities asset classes accounted for two-thirds of ETF flows.

 


Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 


 

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.

The hidden property empire of Australia’s politicians

With rising home prices and falling affordability, political leaders preach reform. But asset disclosures show many are heavily invested in property - raising doubts about whose interests housing policy really protects.

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.