What Labor’s proposed changes to franking credits mean

Labor franking credit changes

Everything you need to know about Labor’s proposed franking credit changes including how the changes could actually be good news for self funded retirees, SMSFs and the Australian economy.

One of the more controversial policies being recommended by the Federal Opposition in the lead up to the 2019 election is the removal of cash refunds for franking credits or dividend imputation credits.

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How to pick the best super fund

Best super funds
Stockspot’s Fat Cat Funds Report 2018 has once again found that fees make all the difference when it comes to your retirement savings. If your super funds charges you high fees, chances are you could be $250,000 worse off when you retire.

The Fat Cat Funds report looks at the performance of Australia’s largest superannuation funds. It names the funds that take advantage of Australians unwittingly paying away their retirement funds in superannuation fees.

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How super funds play the ratings game (Part 1)

Ferris wheel
It’s that time of the year again when super funds release their annual performance. This blog looks at how the funds twist their performance relative to other funds and indexing. The funds’ PR is parroted by the ratings agencies whose tables and good news story are accepted at face value by the media.

Firstly, we look at how funds manipulate their inclusion into the categories set by the ratings agencies.

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Do you own your investments?

Blue fence and padlock
Something you may not put a lot of thought into when you invest is how those investments are held. Sometimes investments aren’t legally owned by you but instead owned by another entity on your behalf. That may sound like a minor difference however there can be significant consequences when it comes to security, tax, costs and the portability of your portfolio.

Broadly investments can be held in 2 ways:

  • Directly by you on your own HIN (Holder Identification Number)

  • Indirectly via a commingled fund or omnibus account structure

Historically stock brokers used a direct ownership model, so each of their clients had their own individual investment account or HIN and all investments were registered on the ASX’s computer system called CHESS (Clearing House Electronic Subregistry System). If the stock broker went bust it didn’t impact the end client because their investments were safely separated.

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Where Are the Customers’ Yachts? The problem with wealth management in Australia

Royal Commission
Five years ago this month I started Australia’s first online investment advice company. One of the reasons I set it up was that I saw too many people getting poor investment advice.

The traditional wealth management industry was positioned in TV advertisements as a way to get peace of mind and secure your future. Behind the scenes it was designed to do exactly the opposite. People were being overcharged, given poor advice and pushed into products that actually harmed their ability to reach their goals.

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Why is financial advice important?

Importance of financial advice
Getting the right financial advice is important for people of all ages. Whether you’re starting out or well into your wealth creation journey, good financial advice defines your goals and the path to getting there. It gives you a map and ongoing support to help you take control of your future.

Financial advice encompasses many areas including investing, insurance and estate planning. It should be personalised to your individual situation based on your needs and goals.

Stockspot provides personalised advice on one particular part of your financial life which is investing. To provide advice we take into account other areas of your financial life like your debts and cashflow but our advice centers around whether you should invest and what you should invest in.

Regardless of where you get investment advice from if you’re not given a statement of advice (SOA) and investment plan then it’s not advice and you will need to decide yourself whether a product is suitable for you.

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$59 billion trapped in Fat Cat Funds

2016 Fat Cat Funds Report

For the latest Fat Cat update – How to pick the best super fund

Our latest Fat Cat Funds Report, the largest analysis of superannuation and managed funds in Australia, has found that the money managed by Fat Cat Funds increased to $59 billion, up from $53.5 billion in 2015.

We believe Australians deserve greater visibility around where their money is invested and how it is performing so we have been producing this report to highlight the issues of high fees, poor transparency and conflicts of interest within the investment industry.

This is the 4th year we’ve run the report and this year we compared a record 3,800 funds to assess how they have performed after fees.

Unfortunately for consumers, almost nothing has changed since our first report in 2013 as the big 4 banks and AMP continue to dominate the distribution of Fat Cat Funds.

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The need for a royal commission into banking misconduct

The 2 major parties in Australian politics have been left scratching their heads over what it is the people want. If the result shows anything it’s that the people want their government to listen and stop putting the interests of big corporates before the benefit of the general population.

If our new MPs and senators do an effective job, a Royal Commission into the banking industry’s financial advice and remuneration practices should be one positive to emerge from the political disarray the country finds itself in. As the crossbenchers jot down their negotiation wish list, ‘royal commission into banking misconduct’ should be at the top.

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Exposing the Fat Cats

Here at Stockspot, we have been actively campaigning against high fees, kickbacks and conflicts of interest in the financial services industry. We believe there should be greater transparency around where fees are going, and better alignment between advisers and their clients.

Over the past 6 months, we ran our Investing Without The Fat Cats campaign to highlight how Stockspot is different to other financial firms, and shine a spotlight on products that are under-delivering for customers. The research we did as part of the campaign uncovered that many traditional products and services charge layers of hidden fees and commissions that are unnecessarily eating away at investment returns.

As the campaign comes to an end, we reflect on some of the highlights and even some controversies.

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Expert help with your investment portfolio

While investing can be a rewarding hobby for some people, most Australians find the prospect of managing their own investment portfolio risky, time consuming and emotionally exhausting.

It used to be almost impossible for most Australians to seek professional help to invest due to the high fees and account minimums required to get personal investment advice. However, technology has fundamentally changed the investment industry, making it more accessible, affordable and honest. Automated investment services like Stockspot have opened up access to professional investment expertise and made investing in a global portfolio accessible to everyone.

To help investors understand the different investment options available, we’ve created an infographic that explains the 3 main types of service Australians can choose from when getting professional help with investing:

    1. Traditional advisers
    2. Technology-assisted advisers
    3. Automated investment services


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What fund ratings won’t tell you

Even if you don’t pay much attention to your super or investments, you’ve probably noticed fund ratings before. Super funds and other investment products like managed funds use ratings on their websites and marketing materials to attract customers as well as encourage financial planners to recommend them. In fact, many planners aren’t allowed to recommend a fund unless it has been professionally rated.

So what do fund ratings really mean and how useful are they?

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More sieve, less cake: how the banks nab your wealth

Fairfax journalists Adele Ferguson and Ruth Williams have exposed yet another financial planning scandal, this time involving the National Australia Bank (NAB). Just as the Commonwealth Bank was beginning to slip out of public scrutiny for its own financial advice disaster, evidence has emerged of more sackings, cover-ups and inappropriate advice at NAB.

The revelations that NAB’s financial advice arm is fraught with compliance breaches, forgery and fraud has brought to light the need to revise policy around bank conflicts of interest. Australians expect to be given fair and unbiased advice from experts, not to be sold products from financial advisers that are aligned with the businesses building those financial products.

But the reality is quite the opposite. The big four banks (CBA, NAB, Westpac, ANZ) and AMP are ‘vertically integrated’, allowing them to both manufacture financial products and recommend them through their financial advice networks. This has led to a situation where bank-aligned advisers exhibit a strong preference for their own products and platforms over competing offerings, seemingly without regard to whether they’re really the best options for their clients.

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What the Murray FSI Report means for super & technology

Superannuation and technology were two key areas of change recommended by the Murray FSI Report which both have the potential to benefit consumers to the tune of tens of billions of dollars in savings.

1) Superannuation fees still too high –

Superannuation fees are too high in Australia and reform is required to better benefit consumers. This was one of the key findings of the Murray Financial System Inquiry (FSI) Report, Chaired by former Commonwealth Bank CEO, David Murray and released on December 7th. The Report stated that “fund fees could be lowered without compromising returns to members”.

The decline in superannuation fees over the past decade has only been modest given the economies of scale that the sector has achieved. The size of the average fund increased from $260 million in assets in 2004 to $3.3 billion in 2013, whereas average fees fell by just 0.20% in total over the same period. As a result, fees paid to the average superannuation fund have ballooned 988% over the past 10 years.



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The financial services gravy trail will derail

Industry lobbying recently had another win over consumers. Around Christmas the government announced its intention to soften proposed new laws around financial advice and in doing so, continue to allow conflicts of interest in financial planning.

The news was welcomed by an industry that has become addicted to commissions, kickbacks and hidden agendas. Unfortunately it was a step backwards for consumers.

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