Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 283

Cuffelinks Newsletter Edition 283

  •   7 December 2018
  •      
  •   

The Royal Commission's two defining moments

In his final summary after an exhausting 68 days of public hearings, 134 witnesses and 6,500 exhibits, Commissioner Kenneth Hayne identified one phrase, six words long - "Can I show you a document?" - that had entered the vocabulary over the course of the Commission. It was usually followed by Rowena Orr or Michael Hodge demonstrating an embarrassing mistake.

I consider the two most impactful words of the Commission were dissembling and criminal.

It was Michael Hodge who accused CBA's Marianne Perkovic of dissembling. In Marianne's defence, I thought she had a right to provide context, as most answers are not black or white. Dissembling means 'to conceal or disguise one's true beliefs'. Kenneth Hayne issued a warning:

"We will get along much more quickly and efficiently and if I may put it quite bluntly, it will be safer for you, if you attend to counsel's questions. If you need to stop and think about your answer, take your time." 

Safer for you! What did he mean by that serious threat?

Michael Hodge said: "Is the reason why you are dissembling in the way you are dissembling because you are trying to pre-emptively explain why it took more than two years to notify ASIC of this breach?"

Kenneth Hayne later added: "Ms Perkovic, I do not regard that as answering counsel's question. Please ask the question again. I want you to listen to it and I want you to answer it as directly as you can."

Little wonder Marianne completed most of her subsequent evidence with one-word answers. This was in April 2018, near the start of the Commission, and it set the rules. It was a warning to everyone, and the QCs hired by banks stepped up their witness training intensity.

Giving evidence was probably the most intimidating experience in the careers of most of the witnesses. Put this to your 'inverted bucket list' of things you never want to face ...

 


Similarly, a collective shiver hit witnesses when Hayne asked Nicole Smith, the NULIS/MLC trustee, if she had ever contemplated that:

" ... taking money to which there was no entitlement raised a question of criminal law?"

It was one thing to give evidence that might result in a corporate fine, but Hayne was suggesting financial services staff might go to jail. The Royal Commission had become dangerous.

Garry Mackrell's opinion on what went wrong at CBA has already received almost 10,000 views, and it's well worth reading if you missed it.

Many important articles this week 

Would you change your portfolio if you could take a genuinely long-term view and ignore the daily market noise? Chris Cuffe explains how managing a charitable portfolio gives him freedom to look to the future and generate returns to build the money for charitable giving.

Phil Graham shows how balanced fund performance comparisons are flawed by using short time periods and different asset allocations. Given the Productivity Commission recommendation to push default superannuation contributions into a 'best in show' shortlist of funds, these comparisons may have major policy and business implications.

Dr Rodney Brown lectures on SMSFs and financial planning, and he describes a technique for SMSF trustees to continue to utilise their franking credits under Labor's proposal. It hangs on the entire SMSF being treated as a single tax entity, and the ability of some trustees to emulate what the large funds can do in co-mingling pension and accumulation money.

The latest report on commercial property in Asia Pac has just issued, and Adrian Harringtonchecks how Australian cities are faring. In another sector, John O'Brien says we tend to overlook the enduring quality in consumer staples, worth a look in this highly volatile market.

Then Phillip Richards reminds us of the value of appointing an enduring Power of Attorney, perhaps something to fix up over the coming holidays, and Aaron Binstead warns of the impact of sequencing risk on retirement outcomes. 

Two big news items in the last week - the students going on strike to protest against inaction on climate change, and David Attenborough telling leaders at a UN summit that "we are facing a man-made disaster of a global scale" - make Colonial First State Global Asset Management's White Paper on climate change highly topical.

Welcome to two new sponsors for 2019, OpenInvest and Regal Funds Management.

Graham Hand, Managing Editor

 

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

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

Designing a life, with money to spare

Are you living your life by default or by design? It strikes me that many people are doing the former and living according to others’ expectations of them, leading to poor choices including with their finances.

World's largest asset manager wants to revolutionise your portfolio

Larry Fink is one of the smartest people in the finance industry. In his latest shareholder letter, the Blackrock CEO outlines his quest to become the biggest player in private assets and upend investor portfolios.

Latest Updates

Investment strategies

An enlightened dividend path

While many chase high yields, true investment power lies in companies that steadily grow dividends. This strategy, rooted in patience and discipline, quietly compounds wealth and anchors investors through market turbulence.

Investment strategies

Don't let Trump derail your wealth creation plans

If you want to build wealth over the long-term, trying to guess the stock market's next move is generally a bad idea. In a month where this might be more tempting than ever, here is what you should focus on instead.

Economics

Pros and cons of Labor's home batteries scheme

Labor has announced a $2.3 billion Cheaper Home Batteries Program, aimed at slashing the cost of home batteries. The goal is to turbocharge battery uptake, though practical difficulties may prevent that happening.

Investment strategies

Will China's EV boom end in tears?

China's EV dominance is reshaping global auto markets - but with soaring tariffs, overcapacity, and rising scrutiny, the industry’s meteoric rise may face a turbulent road ahead. Can China maintain its lead - or will it stall?

Investment strategies

REITs: a haven in a Trumpian world?

Equity markets have been lashed by Trump's tariff policies, yet REITs have outperformed. Not only are they largely unaffected by tariffs, but they offer a unique combination of growth, sound fundamentals, and value.

Shares

Why Europe is back on the global investor map

European equities are surging ahead of the U.S this year, driven by strong earnings, undervaluation, and fiscal stimulus. With quality founder-led firms and a strengthening Euro, Europe may be the next global investment hotspot.

Chalmers' disingenuous budget claims

The Treasurer often touts a $207 billion improvement in Australia's financial position. A deeper look at the numbers reveals something less impressive, caused far more by commodity price surprises than policy.

Fixed interest

Duration: Friend or foe in a defensive allocation?

Duration is back. After years in the doghouse, shifting markets and higher yields are restoring its role as a reliable diversifier and income source - offering defensive strength in today’s uncertain environment.

Sponsors

Alliances

© 2025 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.