MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 35 No 9 | June 3, 2021
12
INFOCUS
An era of regulation
22
ADVICE
Goal setting with clients
Property exposure
Breakthrough acknowledgement on FDS arrangements
CHINA
BY MIKE TAYLOR
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The year of normalisation AFTER being hit with the COVID-19 pandemic last year, China has managed to recover the fastest from the virus and return to business as usual. Returns from MSCI China last year were 18.1% compared to returns of 1.4% by the ASX 200 and the country had returned to positive gross domestic product growth by July 2020. The country is also targeting foreign investors in the hope of growing its economy beyond the scope of domestic retail investors, which it is worried is creating an inefficient market. “Domestically, increasing foreign investor participation, particularly that of institutional investors, in the onshore markets can help to improve market dynamics, reduce trading volatility (induced by high retail investor participation), enhance risk pricing and ultimately make the allocation of financial resources more efficient,” said AXA IM’s Aidan Yao. But managers have warned that investors looking to replicate the strong returns of 2020 would be wise to “temper their expectations” as last year’s returns had been coming off a low base. Schroders’ Stephen Kam said: “The market did so well at a headline level last year that valuations are elevated, that good news is priced in so will the earnings be good enough to support those high valuations?”
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TOOLBOX
Full feature on page 14
THE Government will be almost compelled to change the arrangements for annual client renewals to address what would represent almost an impossibility for financial advisers, according to the Association of Financial Advisers (AFA). AFA acting chief executive, Phil Anderson, is arguing that as the legislative and regulatory arrangements currently stand, advisers might literally have only one day to provide a fee disclosure statement (FDS) – something which is virtually impossible. What is more, the AFA has had its understanding of the situation confirmed by the Australian Securities and Investments Commission (ASIC) and Treasury. “We have been very adamant that it is simply not possible to provide an FDS in one day and
have equally been clear that it is inappropriate to take the risk, as any breach in terms of the content of an FDS or getting the amount wrong would result in the ongoing fee arrangement being terminated,” Anderson has said in a message to members. “Some of the obvious reasons for why this is impossible are as follows: • There is often a delay in fees being processed into the remuneration systems; • It is not possible to precisely predict in advance the amount for asset-based fee clients; • FDSs are important disclosure documents and should be subject to careful checking; • ASIC expect advisers to manually check FDS amounts against product systems (ASIC Report 636); Continued on page 3
UniSuper appoints Peter Chun as CEO BY JASSMYN GOH
UNISUPER has appointed Peter Chun as its new chief executive and he will start in the role on 6 September. Chun would replace CEO Kevin O’Sullivan who announced earlier this year that he would be stepping down after eight years. Chun had 30 years of experience in financial services and was most recently group executive, member growth at Aware Super where he was responsible for leading the bank, marketing, digital, product and business development functions. Chun also spent over a decade at Colonial First State in roles across product, distribution, and investments. Continued on page 3
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