Investors again voice fears over dividend reform

franking-credits/dividends/Franking-credit-reform/AFIC/

19 March 2019
| By Hannah Wootton |
image
image
expand image

In an unsurprising survey result, one of Australia’s largest listed investment companies has found that many Australian investors are deeply concerned by Labor’s proposed dividend imputation reforms.

Eighty-five per cent of nearly 15,000 shareholders to respond to a survey by the Australian Foundation Investment Company (AFIC) said that they relied on franking credits, with many noting that they’d face “significant” income losses should the policy go through.

AFIC managing director, Mark Freeman, said that shareholders were “distressed” by the changes as they’d planned to depend on them in their retirement “in good faith based on the current system”.

“We have received many stories from elderly retirees who are proud of working hard throughout their lives as well as living on modest means in order to save and be self-sufficient in retirement. They did this with an understanding of the current rules, knowing it takes a number of years to build up a retirement fund,” Freeman said.

Attempting to counter Labor’s position that the reforms would only impact wealthy retirees, Freeman claimed that many respondents had planned to use the credits to fund a “modest quality of life in retirement”, earmarking them for groceries and medical expenses.

Freeman also suggested that the reforms could impact investment in Australian businesses, as franking credits were a “key reason” retail investors supported domestic companies’ capital raisings after the Global Financial Crisis.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 4 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

3 weeks 5 days ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 4 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 3 days ago

TOP PERFORMING FUNDS