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.

 

  •   22 February 2019
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

Why spending more in early retirement can improve lifetime income

Conventional wisdom encourages retirees to preserve superannuation. But if those likely to qualify for the Age Pension later in life spend a little more today, it may deliver higher lifetime income and a more stable retirement.

Testamentary trusts have secured the CGT exemption

Treasury’s latest CGT reform draft delivers a win for testamentary trusts and deceased estates, exempting estate-derived gains from the 30% floor. However, questions on death and divorce rollovers remain unresolved.

Meg on SMSFs: What do we think about reversionary pensions these days?

Reversionary pensions have long been a staple of SMSF estate planning, but are they still the best option? Meg Heffron revisits a once-clear favourite and asks whether changing super rules have shifted the balance.

Is it time to bail on Australian stocks?

For generations, Australian investors have backed banks, miners and dividends. But has that loyalty come at a cost? A look at the numbers raises an uncomfortable question about where future returns will come from.

Testamentary trusts survived the trust tax. The drafting battle has just begun.

The fight over testamentary trusts looked settled. Then the draft legislation arrived. Hidden in a technical detail is a question that could force many families to rethink wills they thought were already future-proof.

How does the 4% rule stack up?

The 4% rule has long been retirement's gold standard. But after a difficult period for investors, fresh analysis suggests a more conservative approach may significantly improve the chances of making savings last.

Latest Updates

Planning

How the typical Australian Family could save $844,350 in taxes

The value of a testamentary trust is not determined by wealth alone. Depending on circumstances, it can reduce the tax burden on inherited income, create efficiencies and help build intergenerational wealth.

Superannuation

There's a reason why your super is locked up until your 60s

For decades, it seemed settled. Then one controversial idea reignited a debate that could reshape the financial future of millions. The real question isn’t who’s right or wrong, but whether a long-held assumption deserves another look.

Property

The housing slide could become a crash

House prices are sliding across Australia, yet the most dangerous ingredient for a housing crash is still missing. If job losses surge amid growing economic risks, today's correction could become a historic property downturn.

Retirement

Under-retiring: The greatest retirement risk in a generation

Two retirees. Similar savings. Completely different lives. New research from Challenger reveals why some Australians confidently spend in retirement while others hold back and the overlooked factor shaping retirement decisions.

Five risks to watch in markets

Things you may often hear are: a recession is around the corner, markets are overpriced, the AI sector is about to flop at any moment. It’s like the never-ending laundry pile that sits in my house, it never really disappears.

Investment strategies

Do you qualify as ‘rich’?

What does it mean to be 'rich'? For something so universally desired, it is surprisingly difficult to define. That ambiguity creates a challenge for investors and raises a bigger question about what financial success really looks like.

Investment strategies

If you’re worried about your bond portfolio, you’re missing the point

Most investors think they know what bonds are for. But when markets turn volatile, a surprising misunderstanding can lead to costly decisions. Here’s the overlooked lesson that could change how you view your portfolio.

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 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.