Five things you need to know this week - 7 October

By Drew Meredith.

1. Is this the end? May well have been the question of the week after the Reserve Bank of Australia ‘shocked’ pundits, economists and the market after increasing the cash rate by just 25 basis points. With nearly every ‘expert’ forecasting a 50 basis point hike, the market naturally responded positively as quant-driven strategies quickly rebalanced portfolios. The RBA made international news by being the first central bank to pause, rather than blindly keep increasing rates.?
2. Listed financial advice group Prime Financial Group (ASX:PFG) became the latest to look for additional verticals. The group announced the acquisition of Gold Coast-based SMSF administrator, Intello for a cost of $4.6 million. The group is clearly seeking growth in a disrupted market with the CEO saying “our goal is to double revenue over three years to $50 million from $26 million in FY22 through organic and inorganic activity and enhance capability across our existing service lines”. The acquisition will take the combined client base to 4,000 funds.
3. The Australian Law Reform Commission (ALRC) has once again reiterated the need for an ‘overall simplification’ of the financial services laws. In their interim report, they recommend “serious tidying” comparing the legislation to a poorly planned renovation, with add-ons included without a broad strategy. The report goes as far as saying the legislation is “disorganised, unwieldy, incoherent, and difficult to navigate”. It likely adds further hope to a true simplification of the industry in the coming year.
4. Adviser numbers have continued to dwindle, with 38 per cent of registered advisers leaving in the last 3 years. “The number of registered financial advisers is now back to where it was even before the adviser registration system was introduced” according to Rainmaker. The latest report was accompanied with forecasts that suggest the entire industry could disappear if the recent trend continued, but the group suggested a balancing at 12,000 advisers was the best-case scenario in 20 years' time.
5. From Tahn Sharpe: More Australians are worried they won’t have enough to live on, with three in five believing they’ll fall short – up from only two in five people two years ago – according to research from institutional wealth provider AMP.?The recent?Financial Wellness?report from AMP reveals a “staggering” $200,000 gap between what people think they need to retire comfortably ($600,000) and what they believe they’ll have ($400,000). “AMP’s research is conclusive,” it states. “The past two years have increased people’s fears that retirement won’t live up to their expectations and that their non-work lives will be crimped by financial concerns.”