Letters 12/10 – Time to move with the times
I read with some interest the letter that Marj Russell wrote about licensing advisers.
I hate to state the obvious, but the current system allows Marj to do exactly what she wants to do. She can apply to become a broker in her own right - in other words she is licensed directly to the Government and takes full responsibility for her own actions. All advisers with appropriate qualifications have the right to do this. Unfortunately, with the right also comes the responsibility.
In relation to comments about brokerage being an unnecessary intermediary, I assume she is talking about broker/dealer groups who provide resources, licensing, training etc to advisers. Most advisers are smart enough to realise that they make their money out of giving advice to clients, not running licenses and doing compliance. The reason that this system has evolved is that the
Government wants someone to be held responsible for the advice being given to clients. An adviser can do that directly by taking up their own license or by doing it through a broker/dealer group.
This type of legislative intervention together with the competency requirements that will be needed under CLERP 6 have lifted the standard of the industry and will continue to do so.
The reason that the "do gooders" have continued to tinker with the system is that the schonks have always found a way around the system in the past.
They may continue to do so in the future, but it will become more difficult to do so and the penalties will be more punitive. Whether we like it or not, the world is changing and we need to change with it. Hanging on to the past is not a solution.
Ray Miles
Managing director
Associated Planners
I read with interest the article titled "Index funds beat active management" (Money Management, September 14). In the article, (Vanguard group director Burton) Malkeil says: "The Vanguard 500 Trust Fund, the largest managed fund in the US has outperformed over three quarters of active managers in the last 10 years and over 80 per cent in the last five years."
A few comments:
An accurate heading for this article should have started with the word, "some".
It is possible that some active portfolio managers outperformed all indexed funds over the timeframes of 10 years and five years.
If "Index funds beat active management" as the unqualified headline suggests, why bother with Money Management's managed Investments Section pages 27 to 32 inclusive?
Ken Loyall
CFP
Loyall & Associates
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