A comparison of Australian and US Household Wealth

A comparison of Australian and US Household Wealth Australian households among the world’s wealthiest

The “Australian Financial Review” of 10 October 2012 reported that Australia’s median wealth per adult at USD194,000 is the highest in the world, according to the Credit Suisse Global Wealth Report 2012. Average wealth per adult, at USD355,000, is second only to Switzerland.

It wasn’t that long ago, in fact the late 1990’s, that Australia was seen as a potential laggard in terms of growth of household wealth, given our relative disadvantages in the then “hot” fields of technology and telecommunications. We were seen very much as an “old economy”. The subsequent experience is a classic reminder of the dangers/futility of naïve extrapolation and long range forecasting.

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The cost of “free” financial advice

The cost of “free” financial adviceFinancial advice is “freely” available

Many people are reluctant to seek out and pay for personal financial advice. Some are just distrustful of financial planners, heavily influenced by the negative publicity that accompanies every financial product disaster. The entire financial planning industry is tarnished by the “bad apples”

But there are many others that can’t see the point in paying for advice because they believe they can get it for free: from family, friends, and the media, including the internet. “Free” is a very strong motivator, particularly if the advice is apparently authoritative and credentialled.

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Putting the investment odds in your favour

Putting the investment odds in your favour

Managing investment uncertainty

Whether we like it or not, there’s a lot uncertainty involved in predicting the future. Despite the increasing availability of information, our ability to predict has not improved. This means that we have to learn to live with an element of chance when it comes to managing our investments.

You can manage this element of chance by managing the level of investment risk you hold. An appropriate strategy will consider a) how much risk is appropriate and b) how you will manage this risk exposure over time (or across varying market conditions).

In this article we look at another area of life where the need to manage elements of chance arises and make some comparisons on how we might apply this experience to investment management.

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Independent Financial Advice: is it becoming more accessible?

Independent Financial Advice: is it becoming more accessible?
The Future of Financial Advice

The financial advice industry is going through some major reforms following numerous post GFC reviews and the Government’s “Future of Financial Advice” (FOFA) proposals. The intention is to create a profession of advice providers that is separate from the financial product providers. This requires breaking the (commission based) nexus that currently exists between the two.

While most advisers accept that this is the right path to take, there has been significant resistance to the proposed banning of financial product commissions. Understandably, the proposals require some significant reforms to the practices of the majority of advisers. In future, they will be required to seek payment directly from the consumer, rather than via commissions from the financial products they recommend.

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