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.

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

Welcome to Firstlinks Edition 627 with weekend update

This week, I got the news that my mother has dementia. It came shortly after my father received the same diagnosis. This is a meditation on getting old and my regrets in not getting my parents’ affairs in order sooner.

  • 4 September 2025

5 charts every retiree must see…

Retirement can be daunting for Australians facing financial uncertainty. Understand your goals, longevity challenges, inflation impacts, market risks, and components of retirement income with these crucial charts.

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

Super crosses the retirement Rubicon

Australia's superannuation system faces a 'Rubicon' moment, a turning point where the focus is shifting from accumulation phase to retirement readiness, but unfortunately, many funds are not rising to the challenge.

Latest Updates

Investment strategies

Why I dislike dividend stocks

If you need income then buying dividend stocks makes perfect sense. But if you don’t then it makes little sense because it’s likely to limit building real wealth. Here’s what you should do instead.

Superannuation

Meg on SMSFs: Indexation of Division 296 tax isn't enough

Labor is reviewing the $3 million super tax's most contentious aspects: lack of indexation and the tax on unrealised gains. Those fighting for change shouldn’t just settle for indexation of the threshold.

Shares

Will ASX dividends rise over the next 12 months?

Market forecasts for ASX dividend yields are at a 30-year low amid fears about the economy and the capacity for banks and resource companies to pay higher dividends. This pessimism seems overdone.

Shares

Expensive market valuations may make sense

World share markets seem toppy at first glance, though digging deeper reveals important nuances. While the top 2% of stocks are pricey, they're also growing faster, and the remaining 98% are inexpensive versus history.

Fixed interest

The end of the strong US dollar cycle

The US dollar’s overvaluation, weaker fundamentals, and crowded positioning point to further downside. Diversifying into non-US equities and emerging market debt may offer opportunities for global investors.

Investment strategies

Today’s case for floating rate notes

Market volatility and uncertainty in 2025 prompt the need for a diversified portfolio. Floating Rate Notes offer stability, income, and protection against interest rate risks, making them a valuable investment option.

Strategy

Breaking down recent footy finals by the numbers

In a first, 2025 saw AFL and NRL minor premiers both go out in straight sets. AFL data suggests the pre-finals bye is weakening the stranglehold of top-4 sides more than ever before.

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.