Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 297

Cuffelinks Edition 297

  •   15 March 2019
  •      
  •   

What is it about financial advice that many people devalue it compared with other forms of professional advice? I recently went to a dermatologist for a check on some sun spots. When he heard about this newsletter, we spent 20 minutes on his portfolio and investing. Then 15 minutes on my sun spots. I thought we were about even but I paid him $250 for the honour of his time.

Imagine the reverse where a dermatologist goes to see a financial adviser. Is there any chance they would spend more time examining the adviser's sun spots than the doctor's financial plan? No, the doctor would make an appointment in his surgery and bill accordingly. I've experienced similar discussions with lawyers and architects. 

I wonder what the Royal Commission's Kenneth Hayne does for financial advice, because he does not value it highly enough. For example, he says on page 119 of the Final Report:

"I do not believe that the practice of giving financial advice is yet a profession ... For some time now, a financial adviser has been something between a salesperson and a professional adviser. The industry has moved from scandal to scandal, causing financial harm to clients, and damaging public confidence in financial advice."

As I read through a hard copy of the Final Report, another highlight hit me. Kenneth Hayne's interpretation of the 'sole purpose test' limits the ability of an adviser to charge fees through a super fund, which is a common way of covering the cost of financial advice. This may redefine where some financial advice is heading and less people will receive advice. Are advisers too shell shocked to argue about this?

The sole purpose test requires that super can only be used to provide benefits for a member's retirement. Sounds simple, but how do funds justify giving members frequent flyer points? Adrian Urquhart wants a consistent approachbut regulators seem surprisingly unconcerned.

We like a good debate, and this week we check 'marketplace lending', sometimes called 'peer-to-peer' lending. It's a rapidly growing part of the market as investors look for alternatives to bonds and term deposits. John O'Brien advises investors to watch for the early stages of such innovations, while Daniel Foggo explains the protective mechanisms in the structures.

Aidan Geysen worries that the focus on dividends, especially in the franking credit debate, is overwhelming the need to think about total returns, while Brendan Ryan explains the new Pension Loans Scheme now it is open to far more people than welfare pensioners.

The franking credit debate remains as lively as ever, and Cuffelinks is clarifying as many issues as possible. John Kalkman describes the social pact that led to today's structure.

This week's White Paper from NAB/nabtrade is their hybrid pricing report. Given the value of hybrids in the portfolios of many of our readers, it's worth checking this report regularly for spreads, opportunities and price movements. The hybrid market often offers pricing anomolies.

Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 


 

  •   15 March 2019
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

3 ways to fix Australia’s affordability crisis

Our cost-of-living pressures go beyond the RBA: surging house prices, excessive migration, and expanding government programs, including the NDIS, are fuelling inflation, demanding bold, structural solutions.

Making sense of record high markets as the world catches fire

The post-World War Two economic system is unravelling, leading to huge shifts in currency, bond and commodity markets, yet stocks seem oblivious to the chaos. This looks to history as a guide for what’s next.

Is there a better way to reform the CGT discount?

The capital gains tax discount is under review, but debate should go beyond its size. Its original purpose, design flaws and distortions suggest Australia could adopt a better, more targeted approach.

How cutting the CGT discount could help rebalance housing market

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers.

Welcome to Firstlinks Edition 648 with weekend update

This is my last edition as Editor of Firstlinks. I’m moving onto a new role though the newsletter will remain in good hands until my permanent replacement is found.

  • 5 February 2026

It’s economic reality, not fear-based momentum, driving gold higher

Most commentary on gold's recent record highs focus on it being the product of fear or speculative momentum. That's ignoring the deeper structural drivers at play. 

Latest Updates

Superannuation

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

Investment strategies

Corporate earnings show resilience against volatility but risks remain

Evidence for a strong reporting season had been piling up for months and validated an upgrade cycle already underway. However, risks remain from policy uncertainty.

Superannuation

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

SMSF strategies

Sixteen steps in a typical SMSF borrowing

Getting a mortgage is never an easy process but when an investment property is purchased in a SMSF the complexity increases significantly. Read this before taking the plunge. 

Planning

Do HNWI get better advice?

Good advisers lead to more diversification, lower turnover and less home bias. However, studies show the average adviser may not be adding much value to clients. 

Strategy

AFL Final Ten with wildcard edit 'unlevels' the field

When the new AFL season kicks off a wild-card will be added to the finals. Is this new formula fair and how does it impact the odds of winning the premiership.

Planning

Love them or hate them, it's worth understanding annuities

Investors have historically balked at exchanging a lump sum for a future steam of income. Breaking down the financial and emotional considerations of purchasing an annuity.        

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.