www.moneymanagement.com.au
MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
Vol. 36 No 2 | February 24, 2022
12
INFOCUS
Managed investment schemes
ADVISER EDUCATION
19
Was FASEA exam worthwhile?
Picking tomorrow’s leaders
More principle-based advice legislation needed
ETFs
BY LIAM CORMICAN
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Targeting a new audience WITH more millennials and female investors using exchange traded funds (ETFs) to make their first foray into investment markets, firms are changing the types of funds they are offering as the audience expands. What used to be the domain of Australian and international equities has expanded to include more thematic funds in areas such as video games, technology and climate change. There had been a particular growth in the number of environmental, social and governance (ESG) ETFs being launched. Even firms which had traditionally focused on active management such as Australian Ethical and Munro Partners were now launching ETFs as a way to ‘democractise’ investment and allow all types of investors to invest with them. John McMurdo, chief executive of Australian Ethical, said: “We wanted to make sure everyone who wanted to invest ethically had the option to do so. Many in that channel will be millennials though and this will make it easier to cater to them”. Meanwhile, Perpetual said they planned to launch a whole range of active ETFs after launching its first active ETF last year focused on ethical and socially responsible investing.
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ESG
Full feature on page 14
ADVISERS need less prescriptive and more principle-based legislation in order to make the industry more efficient and more affordable to middle Australia, according to Diverger Limited. Speaking to Money Management, Nathan Jacobsen, managing director of Diverger Limited, said the Corporations Act had become very operational and specific in how outcomes should be delivered to clients, rather than principle based. “A reversion to a less prescriptive, less black and white and more principle-based legislation will actually provide, what is now a very professional adviser population, with the flexibility to execute advice more efficiently,” said Jacobsen. In particular, fee disclosures
and opt-in obligations had become “extremely prescriptive”, according to Jacobsen. “They also place obligations, not just on the adviser, they place it on the licensee, they place it on the platform providers, and ultimately, the super trustees, through different legislation, see themselves as needing to see evidence as well,” he said. Jacobsen said this had created a multiple-tier system of oversight for advisers. “And this is on an adviser population that’s been under a code of ethics now for two years,” Jacobsen said. “It has been through the ethics exam; it no longer has passive revenue streams so it’s actually substantially a more professional cohort of advisers. Continued on page 3
Adviser optimism lifts despite market volatility FINANCIAL advisers’ confidence in their businesses is improving strongly despite higher market volatility, according to Colonial First State (CFS) research. Adviser sentiment lifted in the December quarter of 2021, scoring 57 out of 100 in the CFS Advice Insights Report research, which was a distinct rise from Q4 2020’s score of 51. Released in mid-February and conducted by financial research consultancy, CoreData, the report surveyed 270 mass affluent and high net worth individuals (HNWIs) as well as more than 200 financial advisers to examine investor behaviour and sentiment. Confidence improved across all index measures including revenue expectations, business outlook, business conditions and operating conditions. Over 70% of advisers expected their revenue Continued on page 3
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