This year was big for financial services. The Howard Government’s legacy is Simpler Super, which drove billions of dollars into retirement funds.
It also drove a lot of revenue into financial advisers’ and fund managers’ pockets. The end of year financials showed everyone had a good year.
With the newly-installed Labor Government talking about lifting the mandatory superannuation limits to 15 per cent there could be better years to come for financial services, but meanwhile 2007 will remain the highlight for most.
This year has also been a big one for mergers and acquisitions, the latest being ING’s takeover of Financial Services Group. Consolidation has been in both the funds management and financial planning areas. And with Commonwealth Bank of Australia’s purchase of IWL in October, software companies have also featured.
Boutiques are still handpicking staff from big institutions, with whole teams being lifted from fund managers.
Regulatory change started in the form of compulsory professional indemnity insurance to bail planners out of future Westpoint-type claims.
Financial Planning Association boss Jo-Anne Bloch has promised to focus on cutting red tape in the industry.
And, in the investing world’s biggest news, the credit crunch emanating from the United States sub-prime mortgage debacle cast a pall over the industry. Credit markets are now trading at levels that show investors fear the US is heading for a recession. The biggest casualties here have been Basis Capital and Absolute Capital.
