In the wake of the Federal Budget, and with sovereign debt worries in Europe, the future is uncertain for financial planners.
Two important events occurred last week: the Treasurer, Wayne Swan, handed down the Federal Budget; and Money Management, in association with Lonsec, held its 23rd Fund Manager of the Year Awards.
The Federal Budget was important for financial planners because it represented what is likely to have been the last definitive word on government policy before a Federal election.
The Money Management Fund Manager of the Year Awards were important because they reflected the degree to which markets and therefore investment returns have recovered.
The fund managers that took out the major Money Management awards were those which best handled the recovery.
It was a very different picture to the year before, when the winners were those which had managed to best handle the downturn.
It is perhaps significant that Schroders has registered back-to-back wins, suggesting it is a manager for all seasons.
The market recovery, which has driven investment returns back into the black is the same recovery the Federal Government is hoping will drive its Budget into surplus inside three years.
The question for the Government, fund managers and financial advisers, therefore, is whether the recovery will continue.
In the background lurk innumerable unknowns, not the least being the degree to which the sovereign debt drama that has transfixed Greece will be played out in Portugal, Ireland, Italy or Spain and how that might impact Australia.
Recent research published by Wealth Insights suggests the confidence being felt by Australian financial planners is fragile.
Given the Government’s recent pronouncements around planner remuneration, that caution is entirely justified.
But it may be many months, perhaps as long as a year, before the Government’s policy outlines are manifested in legislation.
With the Budget having been handed down and the Opposition having made its response, the Parliament will now enter its last winter recess before it enters a full-blown election season.
Many things change following elections, including the degree to which governments feel beholden to those, including unions, who fund their campaigns.
