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The Forum > Article Comments > Are we financially literate? > Comments

Are we financially literate? : Comments

By Everald Compton, published 12/5/2014

Should governments protect the vulnerable, the greedy and the reckless?

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If it sounds too good to be true.........
Posted by ateday, Monday, 12 May 2014 9:19:10 AM
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Agree Everald!
A fool and his money are soon parted, and indeed, then become a taxpayer burden.
If housing where not so dammed expensive, you could advise your members to invest in them.
Some of the regional opportunities are tailor made for aged investors, (allegedly) and are positively geared, like some mining village tenements, near coal prospects, that have an expected commercial life of up to 90 years!
And given the only requirement is a freehold house, one could buy 10 such houses, and earn some $600.00 net, virtually tax free dollars a week, $31,200.00 a year?
Given current thresholds, only the last $13,200 would be taxable, and at the lowest rate?
Should the house buying investor retire at around 55, the investment houses would be freehold and earning over $200,000 PA by the time they were 75?
If one is to take a risk, then bricks and mortar is probably the best risk, that eventually becomes freehold, courtesy of tenants!
And at least a hundred times better than (money plucked from thin air) securitiesed mortgages.
At the end of the day, if you don't understand it, don't buy it, and if it seems to good to be true, it probably is!
At least people can and should do their own diligent research, and then invest at home, where there are some protections.
If those protections are removed, all we can expect, is (an)other storm finance mass bankruptcy event(s) and more distressed oldies, separated from often very modest retirement nest eggs!
As for banks, there's probably is a better return from the big four and less risk as shareholders, rather than deceived fee paying savers!?
If the current protections are watered down, the end result will be far fewer investment advisers and a one term Abbott government?
Rhrosty.
Posted by Rhrosty, Monday, 12 May 2014 10:37:53 AM
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Perhaps there is a short cut here.

"There is a strong tendency for financial advisers to recommend investments that earn them the highest commissions. We need legislation that sets a ceiling on what fees and commissions can be earned and which requires a disclosure of those fees and commissions to clients."

The higher the (potential) returns, the riskier the product is likelier to be. The riskier the product, the higher will be the incentive (commission) needed to sell it. Therefore the simplest remedy would be to insist on full disclosure of commissions, fees, discounts and other incentives at the point of sale.

That will allow the individual to make their own assessment of the risks involved, and choose to invest with the potential of higher return, or opt for the safer investment.

Putting a cap on commissions would have the effect of keeping this "risk signal" hidden from view. And would encourage the emergence of other legal forms of reward, which would condemn regulators into a continual game of catch-up as they close each successive loophole.
Posted by Pericles, Monday, 12 May 2014 10:43:36 AM
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Author/quote.,,<After all/everyone has the right to change their insurance policies every year. They must be entitled to do likewise with their financial advisers.

Another proposed legislative change will make it easy for financial advisers and planners to avoid legal action by investors over the losses they incur. While I basically object to people going to Court over losses in investments, because all investors must accept the possibility that they may lose their money at any time, they do need some capacity to sue corrupt entities like Storm Financial and obtain justice.

There is a strong tendency for financial advisers to recommend investments that earn them the highest commissions. We need legislation that sets a ceiling on what fees and commissions can be earned and which requires a disclosure of those fees and commissions to clients.

The powerful question relates to how it can be assured that advisers act in the best interests of their clients, not themselves. Proposed legislative changes give an unacceptable leniency in how to determine the best interests of a client. This is not good, as the needs vary from one person to another and each one has different financial imperatives.

Rather than change legislation, it will be best to encourage banks and other financial institutions to create new financial products for the Ageing, as most Seniors want to invest in products that will guarantee them a reasonable financial return for the term of their life expectancy. There are very few investments that meet this need.

If the proposed changes do become law, there will be a very considerable backlash from Seniors, many of whom will decide to handle their investments without seeking financial advice, and this will lead to many more personal disasters.>>

AS WE EACH MUST DO
my super became my hobby//I FIGURE things always go up in prICE
[OR HAVE FOR SO LONG]..THAT i have over ONE MILION THINGS
Posted by one under god, Monday, 12 May 2014 3:56:47 PM
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that im custodian.. over..but are for future survival/needs
WORTH ONE Dollar each../of course..some more others less..[BUT I GOT OVER 3 MILLION Postage stamps]..BUT CANt sell..but point iS i invested in many thingS..IE CEnt coin=5 cents to buY.

Concluding ON/SPREAD MY RISK..THE MONEY WIL BE BAILED IN
YOU will be left with debt obligations then more HYPERINFLATION
WHILE MONEY IS OVER SUPPLIED IT HAD TO GO SOMEWHERE//INTO ASSET..but they sole our pubic assets..AND WORSE MADE US BEAR THE COST PLUS THE LOSS.

that step too far.INTO TREASON

THE COMPULSORY Super only measures money
AND MONEY WilL hyperventilate if its over printed /AND IT IS BEING OVER PRINTED/IN SHORT OVER SUPPLY/GOVT WAS ACTING UNLAWFULLY WHEN IT MANDATED IT

PLUS DID TREASON when it gave TOP-UPS..TO PEOPLE EARNING TOO MUCH TO EVER GET A 'PENSION'//YET THEY SLURP UP Big on the govt top up[thats criminal malfeasance/get rid of that

currently//we not only paying todays pensions/BUT TOMORROWS AS WELL
Tomorrow all we will be paying for - today's PENSION..TOP UP

POINT BEING WHERE YOU Mugs go wrong is going for cash
cash in deflated INTO Zip/by the time.you get iT
AND MOST LIKELY YOu will loose it in one lump
buying the traps/INDUSTRY OF GETTING AT YOUR LUMP Sum

the issue lies with getting the lump-SUM

http://rss.infowars.com/20140508_Thu_Alex.mp
Posted by one under god, Monday, 12 May 2014 4:04:54 PM
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Having worked in the financial services industry, I can assure everyone that hardly anyone in that industry understands a damned thing about money, investment or their own products. What they know is what they're told to push.

Since the 80's, "capital guaranteed" funds have been unpopular within the industry...they have to guarantee security and return. That's NOT what the industry desires, which is "market linked" funds, meaning no security or guarantees of returns. So they can then be cowboys on the stock markets. They don't have to look for conservative or safe investments, hold no responsibility for the monies of their investors, and stand to make large fees...they don't pay the investor the return made, but a percentage less than their earnings. This makes more money NOT for the agents or reps at point of sale, but DOES make more money for the fund managers who are on salaries plus bonuses based on increased profits of the funds they manage.

This is about forcing the industry to be more tightly regulated, which ain't gonna happen, reducing salaries of fund managers and CEO's, which also won't happen, and getting investment houses to invest more conservatively and offer more securities and guarantees, which also won't happen.

This is the cowboy economy, also known as "free market", where everyone is in it for the quick buck (or million).

As for products for retirees, there are plenty. But what there isn't plenty of, is integrity and people that understand tax implications, and how to displace monies to gain the best tax situation. Accountants aren't interested, generally, in these products, as they view the time spent with a client discussing these products as time wasted, since prospective clients have a tendency to shop around, and aren't obliged to go ahead with their accountant. Fair enough.

People complained about agents earning excessive fees in the late 80's/early 90's, but no-one complained about fund managers and CEO's, which is where the lion's share has always gone.
Posted by Dick Dastardly, Monday, 12 May 2014 4:06:00 PM
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