Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 242

Cuffelinks Newsletter Edition 242

  •   2 March 2018
  •      
  •   

Six months ago, I injured my hamstring on a long bike ride, and eager for a fix, I have seen three physiotherapists for treatment. One arranged steroid injections, another gave rigorous massage and acupuncture, while the third was all exercise. One wanted me back every few days, another after two weeks.

Should I think less of the profession because the solutions differ? Should I simply accept they have different experience, training and preferences for what works? Was the treatment in my best interests or to encourage further visits? Did I need expensive ultrasounds and injections? It's the same with many professions. Most of us don't know if we are overserviced or need the in-house tests.

Financial advice is being scrutinised and regulated far more intensely due to its conflicts. ASIC recently released a report on vertically-integrated financial advice firms which found:

"In 75% of the customer files we reviewed, the adviser has not demonstrated compliance with the best interests duty and related obligations." 

The files were 'non-compliant' because advisers were not considering all relevant circumstances and the customer's existing products.

Our first two articles shed light on some problems the advice industry faces. In the second part of the interview with Michael Kitces (pictured in Sydney), he says the industry caused such regulatory overview, and he suggests a better way forward.
   
Then Peter Thornhill takes an opposite view to the article written last week by Don Ezra. Both men have long backgrounds in asset allocation, and the fact that they can't agree on whether bonds or equities are riskier illustrates part of the advice dilemma. Warren Buffett weighed into the risk debate in his annual letter this week, and we also draw out his argument.

Please comment on any of these articles. There are no definitive answers, which is why investors should educate themselves about the choices available. 

Progress seems more promising on post-retirement investment products, but David Belloutlines five immediate hurdles. Given the Government has just appointed nine prominent experts to an advisory panel, David's caution is important. Then Sean Henaghan wants us to move on from the passive versus active debate and focus more on outcomes. 

On a cheerier note, Adrian Harrington shows which non-residential real estate sectors have performed best and the outlook for 2018, while Julia Stanistreet gives some pointers for selecting Listed Investment Companies trading at a discount to their NTA. Nigel Stewart offers tips to prepare for a market setback before it actually happens.

This week's Sponsor White Paper from BetaShares looks at how to use a 'bear' ETF in various ways, plus a video and background on the new hybrid ETF.  

Graham Hand, Managing Editor

Edition 242 | 2 Mar 2018 | Editorial | Newsletter

 

  •   2 March 2018
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

The strange effect of the 30% minimum capital gains tax

The 30% minimum tax on capital gains sits at the heart of the budget's proposed reforms. Yet the mechanics reveal anomalies that introduce unexpected distortions that raise questions about its design.

Does your will qualify for the discretionary testamentary trust exemption?

Treasury has confirmed the exemption many families were hoping for. But buried in the fine print are two conditions that could leave some wills on the wrong side of the exemption, despite years of careful planning.

Ranking three common retirement strategies

The defining challenge of retirement isn't just about building wealth, it's about converting your lifetime savings into sustainable income. A holistic understanding of different strategies can improve long-term outcomes.

Are you making these SMSF mistakes?

After four decades advising investors, there are a few common mistakes I've seen SMSF investors make. From holding too much cash and chasing yield to overtrading and trusting tips. Are these errors costing you?

Why Australian shares are falling behind the world

Australia’s market boasts a long record of outperformance, but recent results tell a different story. Is the ASX’s lagging performance a temporary setback or evidence that structural forces will keep global markets ahead?

Australia has saved $4.5 trillion for retirement. Here's what matters more

Most Australians approaching retirement can tell you the exact dollar value of their super account. But success depends on more than a sizeable balance. Here's four key questions to ask yourself at the start of the financial year. 

Latest Updates

Economy

Why have Australian living standards 'fallen' and how do we fix it?

For the last few years there has been much talk of a 'cost-of-living' crisis in Australia and of 'falling living standards'. Lately this has flared up again with the pickup in inflation resulting in a renewed fall in real wages.

Latest from Morningstar

Four options for an income investor’s next dollar

What if Australia’s golden age of dividends is ending? Rather than overhaul your portfolio, it may be worth considering where new capital can work harder. I discuss four income strategies and the trade-offs behind each.

Taxation

Completing the reform of CGT: tax real losses like real gains

Recent CGT reforms tax real gains by indexing capital gains to inflation. However, the reform fails to index losses, leading to higher tax on assets that do not keep pace with inflation, creating inefficiencies in the tax system.

Investment strategies

Blockbuster AI debt issuance coming to a bond market near you

With Australia likely to attract a growing share of AI-related issuance, investors should prepare for increasing influence from AI funding demands, evolving credit fundamentals and changing valuation dynamics.

Investment strategies

Active managers: Bringing a gun to the gunfight

When data arrived, basketball abandoned the mid-range shot, Formula 1 reinvented the pit stop and chess embraced humans working with machines. Active managers confronting today's markets may learn from the same path.

Retirement

What Australian super funds can learn from the UK

Most people want answers to three retirement questions: What have I got? Is it enough? What can I do with it? A leading UK pension innovator shares his lessons on helping members better understand and prepare for retirement.

Investment strategies

What the market may be missing in FY27

We asked ten fund managers the same question following FY26. While their investment styles differ dramatically, their answers revealed several surprising areas of agreement about where markets may be heading next.

Sponsors

Alliances

© 2026 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.