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Welcome to Firstlinks Edition 324

  •   18 September 2019
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Disruption is an overused word but there are major trends underway which are changing retirement planning. Three prominent experts, Michael Rice, Anthony Asher and David Knox, have written a detailed paper on a better integrated system for retirement options. We draw out their seven trends affecting the long-term investing of Australians and attach the full research.

Three recent events demonstrate that we are at a moment in time when some businesses fundamentally change in the space of a few years. Bill Gates wrote this in 1996, giving companies a warning:

"We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction."

One event on 'regtech' was part of a series that ASIC is running for its Innovation Hub. Over the next few years, 'advisertech' developments will become apparent to anyone who sees a financial adviser. We have updated last week's article on FoFA, the 'Failure of Financial Advice', with remarks by Adam Curtis of Perpetual, plus a wide range of feedback from advisers confirming that low-value customers will struggle to obtain advice without technology fixes.

Another event was the Fine Food Australia exhibition, which is reserved for food professionals from around the world. I gained entry because my wife, Deborah Solomon, runs Charmaine Solomon's business, producing legendary curry blends and marinades (hey, if Peter FitzSimons can mention his wife each week, I can do it once!). There was a surprising focus on 'plant-based meat'. Some of it, derived from jackfruit or soy beans, is vegetarian and unconvincing, but the US-listed Beyond Meat had a large display and its product is more persuasive (although it's crazy that the company is valued at $20 billion). Not a fine piece of rib eye but it's easy to imagine beef patties will be replaced as the products improve, covered in sauce, tomato and pickles. 

The third event is the 2019 International Motor Show in Frankfurt, underway at the moment, and for the first time, its dominant theme is electric vehicles. Major manufacturers such as Porsche, Honda, Volkswagen and even Lamborghini launched production vehicles, not just concept cars. They will be in showrooms in the next year, so it's worth reading Zehrid Osmani's explanation on why the best investment opportunities might not be the cars but parts of the supporting ecosystem.

Food, transport, money ... so much of our lives will be affected. For financial advice, the Federal Government is finally moving on the Royal Commission findings. As the third verse of Bob Dylan's famous song says to legislators: "he that gets hurt will be he that has stalled":

"Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
The battle outside ragin'
Will soon shake your windows
And rattle your walls
For the times they are a-changin' "

Daniel Brammall describes four advice changes going through the legislation process, and the industry is largely ignoring at least three of them.

Also this week, Jonathan Kriska checks the recent reporting by listed property trusts and shows which sectors are doing well as investors continue to search for defensive yields.

There are many possible roads in the journey towards retirement, and Aidan Geysen shows why investing is similar to a road trip with easy routes and maps but perhaps better ways to travel.

With the focus on negative interest rates, Tony Dillon gives a simple explanation of what it means for your long-term investing and why people are buying when it seems to lock in a loss.

As more investors are buying bonds or bond funds, this week's White Paper from UBS Asset Management explains why going global and active can add value versus passive allocations. The latest ETF Review from BetaShares is also in our Education Centre and attached below.

Graham Hand, Managing Editor

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



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