ANZ Capital Notes
Could Eureka Report do some analysis on the ANZ Capital Notes Issue announced on July 2?
Editor’s response: Thanks for your letter. Philip Bayley has just written a very informative piece on the offer, Measuring up the better return: ANZ notes or equity?
The case for financial advice
Alan’s note on AMP in his recent weekend briefing, Kohler's Week: The Correction, The Rudd (Re)Ascendancy, AMP, China, and more, highlights the risk of investing without professional advice.
AMP is 1% of the All Ords Index so should not be more than 3% of a pre-retirees equity holding.
As a stockbroker/ client adviser, most of my advice to clients is to buy good businesses, sell judiciously and manage risk to minimise losing money.
After 40 years of investing and stockbroking, I know first hand that investing is not easy and requires patience and good advice.
The most difficult task is to find an adviser who is actually experienced in investing his own money. He is worth the effort of finding because he knows the value of money and is concerned for his clients. None of my clients would be in the situation of one investment deciding their retirement.
Financial advice and fee disclosure
Last week’s letter, The price of good advice, certainly makes a point, but why are financial advisers adverse to charging for a service like most other professionals? No-one rejects the claim that they need to be paid for their services. My experience was that they do not truly disclose their fees in a simple effective manner and I would argue that many clients do not fully understand what "fees" the advisers are getting for their service. This also can foster a perception of self-interest in promoting products. If a straight fee for service is offered then the clients know exactly what they are paying for and the products presented should be given an equal opportunity as being the "best" for the client.
Maybe doctors should be able to get a trailing fee for ''your health"? Are they not managing your health much the same as financial advisors are managing your money?
What happened to WestSide story?
Last year, WestSide Corp (WCL) was the subject of takeover action from Liquefied Natural Gas Ltd. Tom Elliott said this was a spec buy (see WestSide story), but the takeover bid failed and since then the share price has dropped dramatically. Could Tom please give some updated news on this stock? Is it still a potential takeover target?
Tom’s response: Thank you for your letter. At the time, I said WCL was speculative, since the takeover was by no means a certainty. Personally, I wouldn't sell now as the damage is already done, but there is still the possibility of other bids further down the line.
In his recent article, Six resolutions for a new financial year, Robert Gottliebsen says: "If we do not change the government in Australia there will be a very big fall in the market."
This is a bold assertion. It may be what Robert hopes will occur but I can't see any reason why it would. Former and now newly-appointed Prime Minister Kevin Rudd is backed by a capable cabinet with a combination of experience and sound, progressive policies that present no threat to the economy and investment community. In my view this will be recognised both here and internationally.