Weekly wrap…ASIC’s no action on grandfathering allows influx of advisers

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Synchron has increased its adviser numbers by over 10 per cent during the period 1 March 2014-7 April 2014 and has had to recruit additional permanent staff members to its head office in Melbourne in order to process the influx of applications and deliver services to advisers.
Synchron has been able to lift its self-imposed hold on adviser applications, following ASIC’s ‘no-action’ position on the Grandfathering provisions of the Future of Financial Advice (FoFA) reforms. “We have always been in the business of making the process of moving to Synchron as seamless and cost-effective as possible,” director Don Trapnell said. “We couldn’t in all conscience encourage advisers to move to us if there was any possibility they would lose an entire revenue stream and put their businesses at risk.”

Treasury has released a draft corporations legislations amendment bill package and is inviting interested parties to make a submission.
The draft Bill is a package of repeal and streamlining amendments to the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001; to reduce compliance costs for business. Its net impact on business is expected to be deregulatory. Amendments include improving the disclosure of executive remuneration in Australia, increasing the flexibility of companies to pay dividends, and improving the efficiency of the Takeovers Panel. Submissions close 16 May 2014.

ASIC has launched an online survey to gather feedback on its services and engagement with the small business sector.
'Small businesses account for 96% of businesses registered with ASIC, so it's important we understand the sector's needs and expectations', said ASIC commissioner Greg Tanzer. This is ASIC’s second small business survey. The last survey, conducted in late 2012, resulted in the establishment of ASIC's Small Business Engagement team which is focused on strengthening ASIC’s relationship with key stakeholders such as business advisers and industry associations and developing resources to help small businesses better understand their compliance obligations.

Research undertaken by national accounting and advisory firm William Buck highlighted that nearly 2 out of 3 private business owners didn’t have their personal financial situation under control.
A series of interviews were conducted by William Buck (The William Buck Hour) which focused on owners of mid-sized private businesses. The questions covered a variety of issues relating to the business and owner’s personal financial situation. Scott Harrington, director of William Buck NSW said, “These results weren’t surprising to us - they were consistent with what we expected from our experience – but they should be alarming for business owners.”

Financial planners can now provide clients with a tangible estate plan in the time it takes to deliver a client review, according to Hans Egger, co-creator of the AstuteWheel Estate Planning suite of tools.  
The comprehensive AstuteWheel Estate Planning solution enables all parties involved in the process – the client, financial planner, solicitor and accountant - to understand the client’s situation, without the client having to repeat and recall their details to each professional. The tools helps financial planners walk their clients through the estate planning process, ultimately producing an estate plan briefing document which they can take to a solicitor.
 
FIIG Securities today closed a $55 million bond issue for New Zealand credit and financial risk insurer CBL Corporation Limited, the first time it has arranged a bond for a non-Australian company.
The five year, senior secured fixed-rate Australian dollar note carries an indicative interest rate of 8.25% per annum paid semi-annually in arrears. FIIG CEO Mark Paton said the bond was yet another first for FIIG as it continued to develop the path to the Australian bond market for mid-cap companies. “This is the eighth bond we have brought to market for mid-cap companies, the first for a New Zealand-based company and the first for a group with a credit rating,” he said.

Nikko Asset Management's Global Investment Committee has cut its overweight stance on global equities, that lasted for over two-and-a-half years, to neutral. This confirms the provisional decision made in early March.
“We believe equity valuations have peaked and that markets will trade nervously going forward. On top of that, unsettled geopolitics make us uncomfortable and the fallout from China’s reform efforts could cause some shocks,” said John F. Vail, chief global strategist and GIC chairman. “In a few markets we expect equities to do well, but against the tunnel of uncertainty looming out there—and given the slim difference between our bond and equity return forecasts—we feel a neutral view on global equities versus bonds is warranted.”

Plato is working with Milliman to overcome the problems of sequencing and longevity risk by developing risk management strategies that will aim to enable investors to maintain higher weightings in growth assets whilst providing tail risk management in times of financial crises like the global financial crisis.
Combining a growth oriented investment strategy with the management of volatility and equity market risk via the Milliman Managed Risk Strategy (MMRS) provides the opportunity to invest in a more sustainable way given the ever increasing length of retirement and the need to maintain purchasing power over time, Milliman’s practice leader Wade Matterson said.

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