Welcome to our September newsletter. September means it’s football finals season and hopefully the beginning of warmer weather despite the recent late winter chill. I can’t believe how quickly this year seems to be flying by.
Economic news in August was dominated by continued rising inflation, another round of interest rate rises (we expect more of both are yet to come), and the rising costs of electricity – I nearly fell off my chair when Heather showed me our latest power bill (continues to skyrocket despite the fact we have two solar power systems total of 15kw plus solar hot water). I’m looking forward to the longer days and hopefully better weather – not only to get better return from our investment in solar power but to be able to get back in the yard to progress a landscaping project we started over a year ago and to put a few more hours on the tractor – so much work I want to do but the paddocks are just too wet.
The Aussie dollar fell more than one cent over the month to close around US68.5c. Aussie shares bucked the global trend, finishing steady over the month. Geopolitical issues are continuing to dampen global economic activity and the outlook for share prices in the short term.
Australian property prices continued to soften, with the fourth consecutive month of average declining prices nationally, but conditions vary considerably from location to location. Further softening is anticipated as the RBA uses the interest rate sledgehammer to try to cut rising inflation, but I’m not as pessimistic on the property market as what we are hearing in the media.
Property prices are not the only thing that is falling. While many industries are facing difficulties in filling job vacancies, one industry of particular interest to me is the provision of financial advice – the number of licenced financial advisers is falling far quicker than property prices and the trend is accelerating – but interest rates have nothing to do with it. Higher education standards, a compulsory exam and an ever increasing mountain of compliance rules which I feel must have been written by the screenwriters of the 1980’s British comedy series – “Yes Minister” have forced many to just leave the industry. The number of licenced financial advisers in Australia has dropped from just under 28,000 in 2018 to a little over 16,000 now, with a further 500 advisers tipped to be removed from the ASIC licenced financial adviser register over the next few months.
The 2019 Royal Commission highlighted there was obviously a need for reform in the industry – much of it directed to the banks and other major institutions who have now either exited or significantly reduced their involvement in the provision of financial advice – but now there is recognition by the current Government that the impact of the changes had far greater consequences than expected (not blaming either party – there was bipartisan support for the changes). There just simply are not enough licenced financial advisors to meet demand for advice, the average age of advisers is increasing and there are few new entrants to the industry – at a time when financial issues are becoming more complex.
Hopefully some constructive changes will come from the current “Quality of Advice Review” to remove some of the make financial advice accessible to more people without impacting on the standard of the advice provided.
On a more positive note, the highlight in August for me was the global giving initiative we are involved with, Buy1Give1, passed the milestone of 300,000,000 giving impacts to worthy causes. It is an honour to be a part of this movement and to do our bit to try and make this world a better place.
