Shorten along with the MSM are going crook on the practices of AMP, CBA, Westpac (and I'm not excusing such companies) BUT
....... the underlying legislation, tax frameworks and mechanisms for providing so-called advice to Joe Bloggs and friends was carefully contrived, melded and remelded by G O V E R N M E N T.
Key Government inspired farces include:
1. A tax scheme that has every punter putting all their eggs into a limited range of local baskets for long lost industry development goals. This means that when one fund goes down due to something like a global downturn ..... THEY ALL GO DOWN. Australia represents something like 2% of the global economy and it rides on the back of its China trade. Should China hit a major recession at some point ....................
Government's psychotic desire to provide tax incentives for residential real estate investments is another example.
2. The assumption that it is possible for an adviser to save Joe Bloggs from himself. Typical Joes want fool proof advice but are unwilling to pay for it in a transparent manner. Many Joes are so bone stupid that they prefer to pay trailing commissions rather than a fee for service.
Many Joes are both greedy and believe in alchemy and their Leprechaun with a pot of gold at the end of the rainbow. Risk managed investment doesn't work that way. Joe is more likely to get out of a fund what he puts in but of course Joe doesn't want to put any in until he turns 50 and then finds out that the Government have put strict caps on what he can put in.
At this point Joe may rightly feel that Federal Government actually wants him to head for the nearest Centrelink office upon retirement. I'm being a bit sarcastic in saying that Government to wants everyone to go to Centrelink when they retire but that's the end result of disconnected Government policy agendas.
3. Regulations and rules that not only overcomplicate everything but change for the sake of change on an annual basis. Ordinary tax returns need specialist advice these days.
The key point is that Federal Governments have set agendas based on poor advice. The financial planning monster Government created attempts to make a buck in circumstances where doing the right thing can't make a buck.
I don't work as a planner. I'm too bearish and would point clients into bear products that won't make anyone happy until seconds before midnight or the morning after a Wall Street wipe out.
Some firms I've come across say things like "we invest for the long term" and we "don't try to predict the market". Are these firms simple fools? There is a difference between "predicting the market (picking tops and bottoms) " and remaining completely oblivious to changed market risk. But now I'm back to my first point ..... funds can't easily extricate themselves from local market risk while Government incentivates their clients for being locked to the local market. In any case if Joes doesn't get what he thinks he wants from one planner he'll just walk out the door and find another.
