Merry Christmas from NFS!
Hello and Merry Christmas All.
Where has 2018 gone, flashed by as we slept on the job, no way! But it does seem that every year goes by faster than the one before, maybe a function of getting older or perhaps we could blame it on Donald Trump or even Global Warming.
Brief Overview
The past 4 months have not been very kind to client investment accounts with the ‘fear’ of a global trade war emanating from the ‘Trump’ induced China-USA spat that has dominated economic news. Fear of what might happen, even if it does not, has driven markets lower and as quickly as they have reacted negatively, they can reverse into optimism driven by ‘greed’ (in this case the chance to pick up under-priced stock-market bargains). There are a number of positive signs of a relaxation of the trade war and the ‘brave’ are taking the early lead to get the bargains already, our share-market has enjoyed a couple of solid and positive days recently.
The best advice is to hold tight, things will recover. Right now, we have paper losses all over the place, but I am seeing these offset by strong income earnings. Last Thursday I met with clients with a portfolio in excess of $1.3m where the net year on year result was negative 3.7%. Looking closer we found that the account received cash distributions of 5.7% and these were offset by paper losses of 9.4%. The good news is that the 9.4% losses can and should be reversed relatively soon and the cash can’t be taken away.
The Financial Services Business
2018 has been a very challenging time for our line of business, the ‘Royal Commission’ really stirred up a lot of negativity in many aspects related to our work and we have watched in horror as many of the parties appearing before the Commission tried vainly to explain the indefensible acts they portrayed. The final report is due out in February and I am expecting even more regulations to be imposed on the way we do business and with inevitable increases in compliance procedures and operating costs.
Professional Standards & Changes
In addition, we have a whole new regime of professional education standards to meet from 1/1/19 and with a series of escalating events culminating in 2024 by which time every existing and new adviser must meet prescribed minimum education standards to be able to continue to practice. Joel and I already hold the basic educational standards and are on track to meet all of the requirements by each of the planned completion dates over the next 5 years. Casey resigned and finished with us at the end of November, so I can’t comment on her forward status related to the new education requirements. The clients that she serviced now have the option of joining with Joel or Bob for ongoing service. We will contact each client affected early in January.
2019 and beyond!
Already we are planning for 2019 including some significant growth. Recently we acquired a small financial planning business based in Kyneton and we expect to acquire another to be based out of our Sunbury office in February, more on that later. We are currently advertising in the market for a new adviser to work out of our Sunbury office to handle the new business being purchased.
We appreciate your trust in the services we provide, especially during troubling cyclical times such as these. It is that very trust that makes us work hard, honestly, and with your best interests as our focus.
Christmas Business Hours
Our offices will close from 5pm on Friday 21st December and re-open at 9am on Wednesday 2nd January. Urgent assistance is available by calling Bob on 0412 335 246 or Joel on 0430 180 196.
