MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 34 No 9 | June 4, 2020
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CHINA
Emerging from lockdown
FIXED INCOME
30
QE The impact of QE
EMERGING MARKETS
INSURANCE
The changing face of the sector
Merger conjecture back on around FPA and AFA BY MIKE TAYLOR
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Who wins from the lower oil price? WHEN investing, it can help to take a broad approach to the world beyond domestic Australian equities. However, there are headwinds to this overseas approach, particularly when investing in emerging markets, and it is important to remember emerging markets are not necessarily in the same shape as their developed market counterparts. Factors to consider with emerging markets which are less of a consideration for developed markets include the political stability of the country, the stability of the currency, their fiscal deficit and economic outlook. These differences have been illustrated recently by the impact of the lower oil price which turned negative for the first time in history, significantly affecting emerging markets who rely on oil price strength in US dollar terms such as Brazil, Russia and Saudi Arabia. These markets have all been hit at a time when they are already under pressure from the COVID-19 pandemic and Brazil, in particular, is going through a rocky time politically with the departure of several ministers. However, it was not all bad news for the sector, as countries such as China and India were beneficiaries by virtue of being some of the world’s largest oil importers. With oil production cut by 10% and oil tankers sitting idle with millions of barrels aboard, the question now is what will happen once lockdown has ceased?
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THE announcement of a significant restructure within the Financial Planning Association (FPA) and consequent job losses has reawakened calls for a merger between the FPA and the Association of Financial Advisers (AFA). In the wake of the calling of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, both the AFA and the FPA have been working more closely together on generating a single voice policy approach but, as yet, there has been no move towards formal merger talks. However, this has not stopped discussion of the issue, with former FPA chair and chief executive of financial planning group, CountPlus, Matthew Rowe suggesting that a merger might be in the ultimate best interests of
the industry. “It is great to see the FPA and AFA beginning to work closely together on some key issues. I think the forecast drop in financial adviser numbers to circa 15,000 will mean it is only a matter of time before we have a single Association representing our professional community,” he said. AFA chief executive, Phil Kewin, acknowledged the degree to which both the FPA and the AFA had been working more closely together and their shared challenges in terms of decreasing adviser numbers which would inevitably impact on membership of the two organisations. However, he made clear that there had been no formal discussion around mergers – something which would need to happen at board level. Continued on page 3
FPA announces its new shape – fewer jobs, more advocacy FINANCIAL Planning Association (FPA) chief executive, Dante De Gori has confirmed job losses resulting from the organisation’s pursuit of a new structure. As revealed by Money Management, weeks after the departure of the FPA’s chief operating officer Pene Lovett in February, eight people in late May were told they were to be made redundant with De Gori a day later issuing a formal statement confirming the job losses and unveiling a “2025 Strategic Roadmap”. He said the five-year strategic roadmap would start from 1 July and would focus on three core pillars – members, advocacy and consumers • Members: To lead the profession on the financial planning model of the future • Advocacy: To be the voice of the profession with a policy vision that ensures a growing and sustainable future for financial planning Continued on page 3
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