Upfront Investor | Are Financial Advice Changes Fair for You?

With the Federal government moving to rush through changes to the Future of Financial Advice (FOFA) reforms investors are right to take notice and ask whether they have been fairly represented, but this is not the only issue you need to be concerned about.

Firstly, I believe in a fair financial system, one that allows advisor businesses to grow, with sufficient protections in place for the consumer. I also see a danger in over regulation as we don’t want to be seen as a nanny state. That said I do have concerns about protections being removed that could affect the financially illiterate. Good financial advisors build trust with their clients through being transparent and helping to educate their clients, and therefore these advisors will have the clients for life. Regulations don’t create these sorts of relationships, the right business model and culture will.

What we are seeing now is history repeating. When a major financial crisis occurs, the few rogues in the system are exposed, there is a public outcry and then the government comes in and tightens up the system. After a period of time, or a change of government, these rules are amended as consumers are less fearful and conditions improve, and so the cycle repeats.

I am not saying that I agree with all the changes the Federal government are putting through, nor the way they are doing it. However, there is a positive to come out of all of this debate, which is, you the consumer are probably now more aware of issues and over the next decade I hope to see more and more people asking the right questions of their advisors and seeking to improve their own financial literacy.

So what do we expect in the market?

Although on Thursday last week the Australian share market attempted to recover from the current negative sentiment weighing on markets globally, we saw Friday end the session in a sea of red, down at 5347 points. It was interesting to see the market take a breather on Monday, with the shortest trading range seen since the 10th of January. This I believe is a reflection of the battle between the buyers and the sellers, and the indecision that currently exits. On the one hand the analysis shows our market has very strong support above 5200 points for a further rise this year, however, the market must break through overhead resistance at around 5450 points for the tussle to be over. Confirmation of direction is likely to be confirmed in the coming weeks.

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To your profitable trading,

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’. Dale has assisted thousands of traders and investors to learn to trade shares and become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment adviceto traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.