Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 294

Cuffelinks Newsletter Edition 294

  •   22 February 2019
  •      
  •   

Last week's survey on your satisfaction with the Royal Commission drew an excellent 850 responses, and Leisa Bell summarises the results. Only 12% of respondents were 'very satisfied', showing some level of disappointment from the vast majority. However, 'somewhat satisfied' was a healthier 47%, giving an overall positive satisfaction of 59%. 

At the other end of the scale, 7.5% said 'not worth it' and 17% said 'below expectations' giving a negative overall of 25%. Perhaps the year of explosive evidence raised expectations. About 16% voted for 'average result'. Let's call the overall assessment a solid pass mark for Mr Hayne, as shown below.
  

Overall, are you satisfied with the recommendations in the Final Report?

 

Over 70% thought Hayne had erred in not addressing vertical integration, and a massive 87% thought both individuals and companies should be prosecuted more. They should be reassured by ASIC's actions since the Royal Commission, including Chair James Shipton at Senate Estimates this week. When Senator John Williams pointed to previous weaknesses and asked, "Has ASIC got the message that the expectations of the Australian people are that you are to lift your game?", Shipton replied, "Loud and clear, Senator, loud and clear."

Relatively few people expect to change financial services provider as a result of the Commission. The survey received too many comments to publish them all but we have a large selection here

Franking credit debate motors on

Last week's article on the basics of franking credits has received a near-record 138 comments so far. We reprise the article so you can read the feedback as politicians and media continue to run hard on the subject. Chris Richardson of Deloitte Access Economics told 7.30 on Monday:

"I think the tax benefit should be there but it is being rorted, and rorted on an industrial scale ... Now, that is a basic description of the superannuation system in Australia: lots of Australian shares, low rate of tax."    

However, he was critical of Labor's solution:

"Given the way they're doing it, they're fixing one fairness problem [which] is costing more money than it should ... But they are creating some new fairness problems for some retirees at the same time. There are still a bunch of people who I think will be unfairly treated."

A policy is inefficient if it has different impacts when super is held in an industry fund, in an SMSF, by a pensioner, by a pensioner on 28 March 2018, or in a wrap with mainly pension assets.  
 
Damien Williamson gives a worked example of an SMSF with excess franking under Labor's proposal switching to another asset to maintain income.

In other investment news ...

Charles Dalziel says investors must know whether their fund manager is truly playing a long game, while Roger Montgomery warns of the consequences of the debt deleveraging that is underway in Australia. The economy slows when we don't buy as much stuff.

Ilan Israelstam reports on global Exchange Traded Funds and how Australia has a long way to catch up on the global penetration, and Ben Chong identifies three tech trends which might not be as popular as some we have seen in the past.

Still on ETFs, the White Paper from Vanguard summarises 2018 trends. The remarkable rise of fixed income and global equities asset classes accounted for two-thirds of ETF flows.

 


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

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

The 2025 Australian Federal election – implications for investors

With an election due by 17 May, we are effectively in campaign mode with the Government announcing numerous spending promises since January and the Coalition often matching them. Here's what the election means for investors.

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

Latest Updates

Investment strategies

4 ways to take advantage of the market turmoil

Every crisis throws up opportunities. Here are ideas to capitalise on this one, including ‘overbalancing’ your portfolio in stocks, buying heavily discounted LICs, and cherry picking bombed out sectors like oil and gas.

Shares

Why the ASX needs dual-class shares

The ASX is exploring the introduction of dual class share structures for listed companies. Opposition is building to the plan but the ASX should ignore the naysayers and bring Australia into line with its global peers.

The state of women's wealth in Australia

New research shows the average Australian woman has $428,000 in net wealth, 40% less than the average man. This takes a deep dive into what the gender wealth gap looks like across different life stages.

Investing

The two most dangerous words in investing

Market extremes are where the biggest investment risks and opportunities lie. While events like this are usually only obvious in hindsight, learning to watch out for these two words can alert you to them in real time.

Shares

Investing in the backbone of the digital age

Semiconductors are used to make microchips and are essential to a vast range of technology and devices. This looks at what’s driving demand for chips, how the industry is evolving, and favoured stocks to play the theme.

Gold

Why gold’s record highs in 2025 differ from prior peaks

Gold prices hit new recent highs, driven by a stronger euro, tariff concerns, and steady ETF buying – all while the precious metal’s fundamental backdrop remains solid amid a shifting global economic landscape.

Now might be the best time to switch out of bank hybrids

In this interview, Schroders' Helen Mason discusses investing in corporate and financial credit securities, market impacts of tariffs, opportunities for cash investments, and views on tier two and hybrid bonds.

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.