Networth News

Welcome to the Networth News update for Wednesday the 28th of September.

Cash sector overtakes super

The bank deposit sector has swelled to a record $1.5 trillion since the global financial crisis, overtaking the $1.4 trillion superannuation savings pool, according to a Rainmaker report. Financial Standard reports that the strong performance of cash over 2010-11 was almost twice the 5 per cent per annum 10-year result. Stock market volatility has also impacted superannuation investment sentiment, with cash asset allocations rising two-thirds through the decade from 10 per cent to 17 per cent.

Accountants key to advice equation

A new licensing regime for accountants needs to be structured carefully as accountants play a key role in the access that Australians have to financial advice. Investor Daily reports that accountants need to embrace a new licensing regime as it is designed to improve advice standards and benchmarks within the accounting profession. Andrew Bloore, chief executive of Super IQ, said the accounting profession did not want to end up in a situation where licensing was rejected and the quality of advice was compromised as a result.

Minimal impact on advice uptake under FoFA

The Government's proposed Future of Financial Advice (FoFA) reforms will not lead to a significant increase in the uptake of financial advice, according to the Self Managed Super Fund Professionals' Association (SPAA). Money Management reports that while 57 per cent of self managed superannuation fund (SMSF) professionals believe FoFA will improve the standard of financial advice, only 14 per cent think it will lead to an increase in the uptake of advice. A SPAA survey of 360 SMSF professionals also found that 81 per cent believed they would be unaffected by the "best interests" duty as outlined in the FoFA reforms while 64 per cent thought they would be unaffected by the banning of volume-based payments.

Tighter capital rules for brokers

Stockbrokers who do not clear their clients' share trades could face a requirement to lift their capital holdings, according to the Australian Securities and Investments Commission (ASIC). The Financial Review reports that ASIC is looking to review capital rules that apply to a growing number of brokers who use non-clearing participants to clear such trades. These firms are obliged to hold less capital than full-service firms as they outsource some of their back-office functions.