Networth News

Welcome to the Networth News update for Thursday the 22nd of September.

Stronger Super proposes "opt-out" reform

Superannuation fund members with balances of less than $1000 will have to "opt-out" of having their multiple superannuation accounts consolidated under the Government's Stronger Super proposals. Money Management reports that employers will have to make contributions for employees who have not chosen a superannuation fund by offering a MySuper product from 2013. Under the Stronger Super proposals, which were unveiled yesterday, funds will also need to transfer existing default super balances to a MySuper product by 1 July 2017.

Buyer of last resort agreements key to valuations

Buyer of last resort (BOLR) agreements and availability of growth finance are key to the future value of financial planning practices, according to practice brokerage Centurion Market Makers. Investor Daily reports that about half of Australia's financial advice practices have access to a BOLR arrangement. Centurion Market Makers director Chris Wrightson, said in a report that BOLR has underwritten the value of practices for the past 10 years and nothing seen from institutional licensees suggests the price or terms will be altered. The report also noted that planning practice valuations are holding up despite industry uncertainty over Future of Financial Advice reforms.

Alternative investment strategies more popular

Fund managers are increasingly turning to alternative investment strategies on the back of recent financial market volatility. The Financial Review reports that investments in infrastructure, unlisted property, private equity and a broad range of hedge fund strategies are popular growth options. Alternative asset allocations account for 19 per cent of all pension fund assets globally – up from 5 per cent 15 years ago, according to Towers Watson research.

Economy can weather global financial storms

Australia is in a good position to weather global financial volatility and the fallout from the European sovereign debt crisis, according to the Commonwealth Bank. The Australian reports that there could be unintended consequences, however, and issues in Europe have already prompted wholesale funding costs to rise on world markets. Australia's top four banks are already fully funded, and CBA CFO David Craig also said that a rush of retail deposits would further cushion the banks against higher funding costs.