Australian Agribusiness Group(AAG) is set to introduce a fee structure for investors wishing to use its research reports on the agribusiness sector as well as levying fees on those financial planners who don’t acknowledge the group in the use of the research.
Up until now planners have been able to access the reports for free via the Internet as long as the group was acknowledged which also gave them access to market overviews, access to AAG staff for discussion and recommended list production and access to other reports on the MIS industry produced by AAG.
“We know that many financial planners use our research and don’t acknowledge the fact,” AAG managing director Marcus Elgin says.
AAG will now have a two tier service, with dealer groups and planners that do acknowledge AAG for research having full access to the group’s reports, while a public website will enable investors and non-acknowledging advisers to buy individual reports and market overviews for about $100.
“If you are going to spend $30,000 on an investment, wouldn’t you like to see an independent opinion into that investment?
“Many planners simply say to their clients — ‘this project is good, invest in this’, but we say the public should have the opportunity to see for themselves, to compare and contrast, to test their planner’s advice and see if they agree,” Elgin says.
AAG’s licence allows it to provide research to the public although it is not allowed to give specific advice.
The group has also released a new report showing the top 25 agribusiness farms have produced returns almost equal to the All Ords over a 23 year period.
The All Ords Accumulation Index produced a return of 11.8 per cent over that period compared to 11.2 per cent for agribusiness according to the report.
The report also looked at volatility of agribusiness returns compared to other investment classes and found the schemes performed favourably when compared to shares.
The average risk/return ratio for agribusiness was 7.3/4.4 per cent – comparing to the All Ords Accumulation Index risk/return ratio of 17/11 per cent. However, 10-year bonds were the top performer with a risk/return ratio of 3.5/10.1 per cent.
The AAG report says the inclusion of agribusiness in a portfolio reduces risk and enhances returns, and suggests advisers should consider a heavier weighing for the agribusiness sector in portfolios than the traditional portfolio allocation of between 0 and 10 per cent.
The report says between 35 and 75 per cent agribusiness allocation produces the greater impact on portfolio returns, although it does not believe advisers should be advising use of the top end of the scale.
