Yields are saving planners' bacon: Philpot
The relatively high yields on Australian corporate bonds, selected shares and property in Australia are the only thing "saving planners' bacon" in the current environment, says HLB Mann Judd wealth management partner Jonathan Philpot.
Philpot's clients are mostly retirees with self-managed superannuation funds, and thanks to the current yields they are seeing "enough income coming into their bank account to pay the 5 per cent pension".
"So we're not having to say 'look, we're going to have to sell down some shares'. Unfortunately for many people who are in retail and industry super funds, they don't see a bank account that's collecting the income," Philpot said.
Instead, retirees in retail and industry funds are looking at the third year out of five in which they've had poor returns, and are beginning to think "this conservative option seems to be doing pretty well, why don't I flick over to that?", he said.
Retirees are focusing "more and more" on the short-term, and the big challenge for advisers in the current environment is to prevent their clients from making "fundamentally bad decisions", Philpot said.
"All I know is that real capital loss happens when you're selling something when the market's fairly cheap and buying into something that's fairly expensive. That's when you're get those real losses in your portfolio, and they're really hard to get back," he said.
Recommended for you
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments for investments.
Inefficient data processes and systems mean advisers are spending over half of their time on product implementation and administration at the expense of clients, according to research.
With the regulator announcing its enforcement focus for 2025 last week, law firm Hall & Wilcox examines the areas which have dropped down the list in priority for the regulator.
