Australian (ASX) Stock Market Forum

Looking for advice on getting advice

Joined
11 August 2007
Posts
99
Reaction score
0
Having said that, every planner should have two basic tools in their kit bag:
1. diversification; and
2. an understanding of risk.

The FP Industry will have to change and I can see a future where fees are performance based. Volume-based commissions, whilst meaning a steady flow of income, gives the planner the overwhelming incentive to write business rather than think about the risk.

I agree with you Bushman. However, I think during the 5 year boom the understanding of risk was forgotten.

The FP industry will change, but I don't think fees will be performance based. This causes too many income problems and boutqiue FPers just won't survive.

My view is that consolidation will occur where the big guys (banks, fund managers etc) will have an even larger market share of the industry. Industry super funds are starting to do this now. Commissions will reduce because they use their own products and won't charge a commission.
 
Joined
4 March 2007
Posts
1,366
Reaction score
2
As an aside, I recently went to the FPA conference on the Gold Coast (I am not a FP but have some involvment in the industry). I was struck by the give-aways and excess of the event. Make no mistake about it - like investment bankers the excesses have to stop. This will be lead by generational change in the industry.

My 2c on the equities market - they are bottoming. As the liquidity crunch eases over the next few quarters, the 'flight for safety' will be reversed and equities will be the first to benefit. I mean Uncle Ben is doing his utmost to steer people away from cash and into riskier assets and equities will also lead us out of the recession (which will be bottoming too over the first quarter as cheap debt and fiscal stimulus starts to filter through to the real economy).

Blue chip financials and miners will by the leaders of the pack and that is good news for the ASX-200 which is dominated by the Big $ banks plus RIO/BHP.
Long-run I worry about another bubble and the continuation of 'disaster capitalism' as the all out fight against deflation sows the seeds for the next asset boom. The bond bubble will aslo be popping soon so check what any fixed-income funds are holding.

geez there you go .... better get back to work :rolleyes:

Looking at a chart of the S&P500 from the 1974 bear mkt bottom to about 1983 small cap stocks seem to outperform ( good comparison to now ? )

:Exhibit 1
Relative Performance of Small Stocks vs. S&P 500
( it is not in a form I can post )

In bull markets since the Great Depression, small-capitalization stocks have rallied more than 50% on average from the bottoms they hit mid recession.

In fact, they've logged an average gain of 44% in years during which the economy has been flat or has contracted up to two percentage points.

DYOR

The current times have all reinforced the old wisdoms

1)
That the secret to money is having some....

2)
That may people do not understand this....


no advice here

But some small companies can move ahead and adapt

while large companies must restructure
restructure and restructure

tugboats can turn faster than Titanics
etc
motorway
 
Top