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MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
FINAL EDITION
Vol. 36 No 10 | June 30, 2022
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INFOCUS
A joint industry effort
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35 years of Money Management
TOOLBOX
Accountbased pensions
The five priorities of the Quality of Advice Review
EQUITIES
BY LAURA DEW
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Equity opportunities … if you know where to look WHILE the Australian equity market has struggled in the first half of 2022 but there are multiple factors which suggest it is time for investors to be bullish. Contrary to concerns, experts said the stockmarket was priced normally at the moment, based on its historical earnings multiples, and was paying dividend yields of 4%, making it an attractive option compared to other global markets. Looking at specific sectors, banks were expected to be more profitable in a higher interest rate environment while mining majors would benefit from rising commodity prices in an inflationary environment. There was also the opportunity to add exposure in value and small-cap parts of the market. BlackRock managing director, Charlie Lanchester, said: “We find value across a range of sectors. In particular, we think small and mid-cap industrial stocks across a number of sectors look really interesting. “As often happens in times of dislocation, companies at the smaller end of the market can fall a lot harder than the large caps, because their liquidity is lower. It only takes one or two sellers to panic and those shares can move substantially lower. That’s where we are finding value.”
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Full feature on page 14
A JOINT association of 12 financial services organisations has highlighted five key priorities for the industry in its Quality of Advice Review. In its submission, the organisations agreed there were five areas that should be priority for the review to examine. 1) Recognising the professionalism of financial planners; 2) Addressing the needs of clients including easier-to-understand documentation; 3) Achieving regulatory certainty; 4) Improving sustainability of profession and practices; and 5) Facilitating open data and innovation. While the industry was in agreement in these issues, it was likely they would also make their own individual submissions.
Professionalism of financial planners The organisations proposed a simplified regulatory regime including eliminating the duplication between the registration and professional standards for advisers and the authorisation and obligations of the Corporations Act. Needs of clients Financial advice disclosure and documentation frameworks should be updated to ensure they are designed with clients’ needs at heart. This required a separation of what needed to be disclosed to the client in order to meet regulatory and consumer protection and the documentation of financial advice and recommendations. Continued on page 3
Australia’s life insurance industry announces new peak body BY LIAM CORMICAN
THE AUSTRALIAN life insurance industry is expected to launch a new industry body later this year known as the Council of Australian Life Insurers (CALI). A CALI spokesperson said the industry had undergone significant change, including policy reform and structural changes via industry consolidation following the Hayne Royal Commission, which meant it was time for a dedicated peak body to focus solely on matters affecting life insurers and their customers. The insurers noted that the Financial Services Council (FSC) had played a critical role in representing the life insurance industry during a period of significant change in Australian financial services over its time as the representative body. Continued on page 3
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