Perpetual’s Deverall warns of short-termism
Perpetual chief executive David Deverall has used a speech to the InstituteofChartered AccountantsinAustralia to warn of the impact of short-termism on investment decisions.
Deverall revealed the findings of a Perpetual survey of business leaders pointed to some disturbing trends, including that many of those surveyed are risking long-term wealth creation in favour of short-term earnings and incentives.
He said the survey revealed that while business leaders believed investors and shareholders were more interested in long-term performance and strategy, nearly one in four believed their current financial reporting was too focused on the short term.
Deverall said short-termism could destroy long-term value, decrease market efficiency, reduce investment returns and impede efforts to strengthen corporate governance.
“This growing imbalance towards short-term issues is posing a real threat to wealth creation over the longer term, particularly in superannuation,” he said.
“Business leaders need to invest in growth strategies which will deliver long-term value for shareholders,” Deverall said. “Communicating to the market needs to provide a balance between ticking off the short-term targets and providing information about how strategic initiatives will delver long-term growth.”
AUTHOR
Mike Taylor
Recommended for you
Numbers are in for 2024, with Wealth Data confirming how many advisers left during the calendar year and which business models saw the largest growth in terms of new licensees.
Praemium has seen its highest net inflows in over two years for Q2 FY25 as its Powerwrap platform returns to inflows after five consecutive quarterly outflows.
Insignia Financial has announced total quarterly net inflows of $2.3 billion as well as a third bid from Bain Capital.
As DBFO reforms around fees take effect, Adviser Ratings explores how advice businesses can adopt more transparent and client-centric pricing models in 2025.
