Eureka Correspondence

The end of union power, FoFA reforms and Macquarie, the price of good advice.

The end of union power

Alan’s latest weekend briefing said: "The Rudd Ascendancy, to be most likely followed quickly by the Abbott Ascendancy, should spell the end of trade union power in Australia. It probably will not mean the end of trade unions themselves, but they will need to become much more service-oriented organisations rather than quasi-political bodies" (see: Kohler's Week: The Correction, The Rudd (Re)Ascendancy, AMP, China, and more).

If this comes to pass then it will be the most profound redirection of Australia since Federation. Australia has been dominated by a single sectional interest body for approximately 50% of the time by the very existence of what is now called the ALP.

I don't think you are right in your prediction, Alan, but if you are, how sad that for the first 70 years of my life I lived in a country that was stolen by this narrow view of life. I am not against trade unions.  But I am vehemently against any narrow sectional interest group usurping the democratic process.

I can't let myself dream such a wonderful thought because it sounds too good to be true.

Ken Moxham

FoFA reforms and Macquarie

I contacted Macquarie regarding Alan's advice to open a new CMT account and they said this new legislation does not come into effect until July 2014. Could you please clarify this as my adviser at Macquarie was quite adamant that opening a new account was unnecessary?

Thank you for your assistance.

Diane Lovett

Editor’s response: Thank you for your letter. Cliona O’Dowd’s recent article, FoFA’s failing: Advisers off the reforms hook, addresses this issue in detail. In some cases, trail commissions will be paid on new accounts until July 1 2014.

The price for good advice

In Alan Kohler and James Kirby’s Inside Line video, FoFA, A July 1 opportunity, Alan makes reference to financial advisers as nothing more than sales people flogging a product.

It is well known that financial advisers come under some of the strictest codes of regulation ever seen in this country, and in the main, always work in the best interests of their clients. In this regard, the new legislation surrounding best interests and fiduciary obligations will have little effect.

Those same advisers, in the main, who have been receiving trail commissions, have used those trails as payment for ongoing services in maintaining a client’s wealth and insurance portfolios in a manner that ensures they are achieving their financial goals.

To imply that financial advisers are just product floggers is an insult to the profession. Whether it be a trail or an ongoing service fee it is payment either directly or indirectly by the client for a service that they are entitled to use. Personal advice does not come free. There is a price for obtaining a high level of knowledge in a very complex financial world. Not everyone has the same level of knowledge as you Alan and I am sure that if they were seeking financial advice from you then there would be a cost for that advice.

Name withheld

For more Eureka Correspondence, click here.

Related Articles