Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 316

Welcome to the Firstlinks Edition 316

If you knew your incoming boss thought something the business does is 'absolutely abhorrent', would you fix it before he arrived? I know I would. So is NAB redesigning and repricing some of its products before Ross McEwan becomes CEO, since that's what he thinks about many of the current pricing practices. My dictionary defines 'abhorrent' as 'inspiring disgust and loathing'. There's not much wriggle room there.

Or has McEwan forgotten how Australian banks often price their products? Shortly after McEwan took over RBS in 2014, he acknowledged:

"We happen to be the least trusted bank in the least trusted sector in the marketplace."

He set about restoring trust, and he has already said his goal will be to make NAB the most trusted bank in Australia. He also said in 2014:

“It is absolutely abhorrent to give better rates to a new customer than someone who has been with you for 30 years. We have 16 million customers – it is time we need to focus on them rather than winning one or two more ... We do not want to build a bank by sucking people in with better rates only to dump them six months later. That is what created problems in this industry.”

Ross McEwan hates introductory rates. He said RBS would not win business by offering attractive new deals that are not available to its existing customers, but that's exactly what NAB and other Australian banks do regularly. Here are a couple of examples:

1. NAB iSaver account offers a four month introductory rate of 2.11% for new customers then the rate falls to a miserly 0.11% as a reward for loyalty.

2. Balance transfer rates on credit cards only last for a limited time. At the end of the balance transfer period, any of the transfer amount not paid off shifts to the higher cash advance rate.

 

There is even a video explaining how this works. Elsewhere, there are 'special' and 'standard' term deposits, and home loan rates not available to refinance an existing home loan.

It's what is called a loyalty taxas I've written about before, and former ACCC Chairman Allan Fels makes similar criticisms of the insurance industry. Add your thoughts on the merits of introductory offers in Have Your Say.

On to some brighter notes ...

Continuing our popular Interview Series, Megan Scott of Martin Currie Australia explains how she manages her wide range of responsibilities as part of a global investment business. 

On investing, most Australian listed property trusts (A-REITs) had a strong FY19, and Patrick Barrett checks whether it will continue. Investors in bank hybrids have also had a good run, but with much tighter margins, both Jonathan Rochford and Justin McCarthy ask if it's time to sell.

Dick Smith put franking credits on the front page again (well, maybe page two) when he suddenly discovered his big refund, and Jon Kalkman and Tony Dillon do the numbers for him.

Miles Staude draws on the proven lessons from the Warren Buffett teacher, Benjamin Graham, to show value investing will again have its day, maybe when we're not at all-time highs.

This week's White Paper from AMP Capital is a detailed study on the role of 'green bonds', while the NAB/nabtrade hybrid rate sheet below shows how low many margins have fallen.

Graham Hand, Managing Editor

 

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

 

  •   25 July 2019
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

The growing debt burden of retiring Australians

More Australians are retiring with larger mortgages and less super. This paper explores how unlocking housing wealth can help ease the nation’s growing retirement cashflow crunch.

Warren Buffett's final lesson

I’ve long seen Buffett as a flawed genius: a great investor though a man with shortcomings. With his final letter to Berkshire shareholders, I reflect on how my views of Buffett have changed and the legacy he leaves.

LICs vs ETFs – which perform best?

With investor sentiment shifting and ETFs surging ahead, we pit Australia’s biggest LICs against their ETF rivals to see which delivers better returns over the short and long term. The results are revealing.

Family trusts: Are they still worth it?

Family trusts remain a core structure for wealth management, but rising ATO scrutiny and complex compliance raise questions about their ongoing value. Are the benefits still worth the administrative burden?

13 ways to save money on your tax - legally

Thoughtful tax planning is a cornerstone of successful investing. This highlights 13 legal ways that you can reduce tax, preserve capital, and enhance long-term wealth across super, property, and shares.

Why it’s time to ditch the retirement journey

Retirement isn’t a clean financial arc. Income shocks, health costs and family pressures hit at random, exposing the limits of age-based planning and the myth of a predictable “retirement journey".

Latest Updates

Weekly Editorial

Welcome to Firstlinks Edition 639

Thank you for the hundreds of responses to our Reader Survey and to maximise the sample size, we’re leaving it open until this Sunday. Here is an overview of the results so far.

  • 27 November 2025
  • 1
Investment strategies

Where to hide in the ‘everything bubble’

It might not be quite an ‘everything bubble’ but there’s froth in many assets, not just US stocks, right now. It might be time to stress test your portfolio and consider assets that could offer you shelter if trouble is coming.

Investment strategies

The ultimate investing hack: dividend growth stocks

Investors often fall prey to ‘amygdala hijacks,’ letting emotion trump reason. By focusing on dividend-growth with stocks instead of volatile prices, you can steady your mindset and let compounding do the work. 

Investment strategies

CBA or global banks?

CBA’s recent pullback highlights single-stock risk. Global banks trade at lower P/Es with rising earnings and dividends, offering investors both income potential and long-term value beyond the local market.

Investment strategies

Global dividends rising, but Australia lags

Global dividend growth surged in the third quarter, with median growth of almost 6%. Australia was a notable exception as dividends fell, thanks to flagging mining company payouts.

Economy

I called inflation's rise and fall and here's what's next

In 2020, I warned that surging US money supply growth would spark inflation. By early 2023, I said US money supply was dropping dramatically and that meant inflation would decline. Here's what happens next.

Superannuation

Are excessive super funds giving Australia “Dutch Disease”?

The irony is profound: a system designed to secure Australians’ futures may be systematically dismantling the economic diversity necessary for long-term prosperity.

Investment strategies

Could your children pass the inheritance ‘stress test’?

You devote years of your life working, saving and investing, striving to build a legacy that will outlive you. Before any wealth moves to the next generation, here are six questions every parent should ask themselves.

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.