Performance fees: friend or foe?
David Wright continues his analysis of the pros and cons of paying fund managers for how well they do. Following on from the theme of our story in the last edition (February-March 2010), the proliferation of boutique funds management businesses and the emergence of hedge fund products into the retail investor market has seen more
April 07, 2010
Everything that’s old is new again
The growing optimism among brokers for company earnings may be well founded. Ron Bewley explains. In the last issue of Professional Planner I tackled the problem of companies and brokers seemingly not updating their forecasts quickly enough. As a result, I reweighted the data to take a longer-term view – and that upgraded my interpretation
April 07, 2010
Changing gears as economic recovery consolidates
Frank Gelber says property investors should strap themselves in and enjoy the ride. So much for the downturn in the Australian economy, let alone the recession that many expected. It turns out that, even as the doomsayers were in the ascendancy, the economy was picking up through the second half of 2009. The recovery is
April 07, 2010
Discipline and an open mind the secrets to success
Bob Van Munster examines investors’ tendency to only see what they want to see Long periods of market volatility and uncertainty are sure to inject fear into investors. The recent global financial crisis is a prime example. During such periods, there tends to be a rise in the number of unopened superannuation statements in Australian
April 07, 2010
Guiding clients to success
Ivan Ang of Fitzpatricks shares his insights into philanthropic advice with Simon Mumme. Ivan Ang has explored the intersection of philanthropy and financial advice from most angles. A partner in the Fitzpatricks financial planning firm in Sydney, Ang has “been down the rabbit holes of what works and what doesn’t”, and is still honing his
April 01, 2010
Aligning managers’ interests
If asset-based fees are inappropriate for financial planners, then they’re equally inappropriate for investment managers, and other players, argues David Wright. In a small part of the Australian Securities and Investments Commission’s (ASIC’s) submission to the Parliamentary Joint Inquiry into Financial Products and Services in Australia (“the Ripoll Inquiry”), ASIC said: “Remuneration based on the
February 07, 2010
Patience a virtue for investors in 2010
Ron Bewley says there could be handsome rewards for investors who are prepared to stay the course. As the new decade begins, we can reflect on the chaos that heralded the last. Who can forget the hype that was sold to business about the dangers of not upgrading software to shield it from the Y2k
February 07, 2010
End of cycles? Think again
The current risk aversion in both debt and equity markets means we’re setting up for a big one. Here we go again, says Frank Gelber. Will we repeat the mistakes of the financial engineering (FE) boom? Not exactly. There are a whole lot of new mistakes we’ll make next time around. But the essence of
February 07, 2010
Anchoring and aversion to ambiguity
Last year finished up being a real surprise for many investors and commentators alike. After dipping 15 per cent in the early part of the year, the Australian sharemarket looked set to repeat 2008’s 38 per cent fall. But how different the year turned out to be, with the market staging an incredible recovery from
February 07, 2010
Know your product
Advisers should know the full range of giving options available – and how they match specific philanthropic aims – before their clients decide to donate, writes Simon Mumme. The growth of private ancillary funds (PAFs) – formerly named prescribed private funds (PPFs) – shows that a new culture of giving in Australia is catching on.
February 01, 2010
Indexing is an alternative, not a replacement
The recent performance of active managers doesn’t mean they should be dumped in favour of using index funds, says David Wright. A number of trends have emerged from the global financial crisis (“GFC”), not the least of which has been the large inflow of investor money into index funds. While this has been very noticeable,
December 07, 2009
Does gearing still work?
Ron Bewley says it’s too soon to tell what effect the global financial crisis has had on properly-constructed, long-term gearing strategies. People only ask questions such as, “Does gearing still work?” when the market is bad – and that is not the time to assess a long-term strategy. We, and others, have argued that the
December 07, 2009
