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

Noel Whittaker’s take on the budget

Marketed as a fix for inequality and housing affordability, the latest budget instead delivers a tangle of tax changes that leave everyday Australians worse off.

Australia has no death duties. Technically.

Australia may not levy formal death duties, but a growing web of tax measures is quietly shaping what wealth passes between generations. Now, the 2026 budget adds another layer.

How to minimise tax with a will

Inheritance tax implications in Australia may surprise some, as poor estate planning without proper wills or trusts can lead to costly tax bills and delays for beneficiaries.

Testamentary trusts post-budget: Estate planning, tax reform and the ‘death tax’ debate

Proposed Budget changes to taxation are casting new uncertainty over testamentary trusts, prompting closer scrutiny of estate planning structures and the real implications of reforms still taking shape.

Back to the future - Why indexing CGT is a good idea

A return to indexation of capital gains would be a fairer way to compensate households for the effects of inflation than the current discount. Importantly, it opens the door to future, broader reforms to stop the taxation of inflation.

Meg on SMSFs: The CGT changes don’t impact super but what about Div 296 tax decisions?

New CGT rules could tip the scales in the super vs non-super debate. For those facing the Division 296 tax, the case for withdrawing has gotten more complex. A "comparison rate" tool may help assess decisions.

Latest Updates

Investment strategies

Choose your hedges wisely… and often

A new market regime is exposing the fragility of static hedges. With correlations shifting and safe havens flipping, investors must rethink diversification and adopt more adaptive tools to protect capital.

Investment strategies

Yields take centre stage again

The Australian credit landscape is shifting. Yields are rising, issuance is strong and spreads continue to tighten. Income is re‑emerging as the dominant driver of returns, though pockets of risk may be building beneath the surface.

Investment strategies

The grass is always greener: Rethinking Australian vs global equities

Australia's once‑dominant sharemarket is losing ground as others surge ahead, prompting investors to question home‑bias instincts. Meanwhile, the US market appears attractive. Is it time to revisit your global equity allocation?

Investment strategies

Stop asking if there's a stock market bubble. Ask this instead.

Markets continue to push onwards despite valuations looking stretched by historical standards. Bubble talk is rampant, however investors may be focusing on the wrong thing. The real story sits deeper than the headlines.

Taxation

The GST cannot stop inflation

Raising the GST when inflation jumps sounds clever on paper, until we examine how it may play out in practice. What is pitched as a simple inflation fix can lead to a sharp turn in the wrong direction for prices.

Shares

Why SpaceX is coming to your super fund

SpaceX’s blockbuster debut is grabbing headlines, but the real story for Australian investors is much quieter. Giant listings eventually filter into super funds and ETFs, subtly reshaping portfolios long before most realise.

Taxation

Is the government being honest with us about its business CGT changes?

The government’s assurances on small‑business concessions don’t withstand the scrutiny. Token carve‑outs and a lack of credible rationale for CGT changes may reshape how Australia rewards long‑term value creation. 

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.