The View Newsletter – September 2014

It’s just over 100 days since Joe hockey handed down his first budget – and we’re still talking about it.

It’s safe to say that most of us are a little sick of the political ‘hokey pokey’ and would rather all the talking (bluster, bloopers and blunders included) was done and dusted, the hold-up is not doing our country any favours.The government’s failure to sell it’s budget quickly has created uncertainty and a perception there is a budget crisis in the capital. Consumers are becoming increasingly worried.

Four men who agree are Australia’s leading bank economists who have stated that ‘simmering geopolitical issues aside, it is the budget and its failure to pass that worries them the most’.
” I think we need to recognise the fact that issues around the budget have had an impact upon confidence it flows into the real economy by people deciding to save more, spend less, business diverting their capital spending plans and the like ….The best thing we can do is get the budget behind us”, said Warren Hogan chief economist at ANZ.Let’s hope for second time lucky, as the government reboots it’s budget sales pitch – After all, it’s easy to say that the economy’s structural problems are medium- to long- term but it’s the medium- to long- term that has a nasty habit of becoming the short to near term at a surprisingly rapid rate!

Restoring Trust

Where to start? Is certainly a phrase that comes to mind when beginning a critique of the financial services industry at present. An extraordinary few weeks during which we woke to incredulous news headlines almost every other day.  Macquarie Group was writing letters to thousands of customers, Commonwealth Bank of Australia were issued new license conditions, the chairman of the Financial System Inquiry raised concerns about the structure of the industry and now lawyers are describing the FoFA laws as “some of the poorest quality legislative provisions ever seen” (Australian Financial Review, 29th August 2014).

The string of scandals may seem many, but they have served to force some good and we’ve witnessed some big changes to the industry already. We can only hope that this marks the beginning of a long journey towards restoring trust with the Australian public.

Raising the Standard

Last week we witnessed announcements by many of the largest financial planning groups in the country. The central theme was clear – we will see education standards of financial planners raised across the profession.

Click here for an overall summary of the key themes in last week’s announcements.

The industry’s poor standard of education, both an Adviser’s certification and their commitment to ongoing education included, has long troubled us. When you consider the nature of an Adviser’s responsibility (custodians of a client’s wealth), it’s staggering to think it’s taken this long – But a step forward none-the-less.

Australia provides a huge opportunity for households to manage their retirement savings…