Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Robert G. Allen is a #1 New York Times bestselling author of Creating Wealth, Multiple Streams of Income and The One Minute Millionaire.
Depositors are facing a critical decision, given low rates on savings, risks from bail-in and tightening terms and conditions. So are there alternatives?
And join us tomorrow for a deep dive on Deposit Bail-In.
A discussion about investing, with Kerry Stevenson, the founder of the annually held Gold and Alternative Investments Conference.
The event features experts from around the world in the gold, silver and cryptocurrency space, along with numerous ASX-listed precious metals mining companies.
Note she is not a professional investment manager.
In another in our series talking with those in the front line of finance and property, I caught up again with Tony Locantro from Alto Capital in Perth. We discussed the property market and broader investment strategies. What to do?
ASIC says Commonwealth Bank of Australia (CBA) will refund approximately $80 million to around 216,000 Wealth Package customers as compensation for failing to apply fee waivers, interest concessions and other benefits since 2008. The refund payments include an additional amount of interest to recognise the time elapsed since the relevant benefit was not applied. CBA reported this matter to ASIC under its breach reporting obligations in the Corporations Act.
For an annual fee, the Wealth Package (for some customers described as ‘Mortgage Advantage Package’) offered benefits such as interest rate discounts and fee waivers in relation to a range of products including home loans, credit cards, transaction accounts, personal loans, overdrafts and insurance.
CBA relied on staff to manually apply many of the discounts available under the Wealth Package. Investigations revealed that an exception reports, which was designed to detect when the discounts were not properly applied, was not working properly.
CBA discovered the breach following a customer complaint and reported it to ASIC in 2014. CBA committed to fully investigate the cause of the breach and the impact on all eligible Wealth Package holders. CBA also engaged Ernst & Young, an independent firm, to review and provide recommendations to improve controls, ensure its remediation process would identify all those affected, and ensure an accurate calculation of refunds.
ASIC Deputy Chairman Peter Kell said, ‘This was a significant breach, and shows how important it is for licensees to have robust systems in place to ensure financial products deliver the benefits that consumers have paid for.’
‘Manual processes to apply discounts, waivers and other concessions involve inherent compliance risks. Licensees should carefully consider whether those risks are being appropriately managed, or are capable of being appropriately managed’ Mr Kell said.
CBA has simplified the Wealth Package by reducing the number of options and products on offer. These changes have not removed benefits that existing package holders were entitled to receive for existing eligible products.
ABS released their funds management data to December 2014. The managed funds industry had $2,489.9b funds under management (including some changes to the data capture and revisions), an increase of $57.6b (2%) on the September quarter 2014 figure of $2,432.3b. The main valuation effects that occurred during the December quarter 2014 were:
At 31 December 2014, the consolidated assets of managed funds institutions were $1,958.5b, an increase of $48.8b (3%) on the September quarter 2014 figure of $1,909.7b. The asset types that increased were:
These were partially offset by decreases in:
At 31 December 2014, there were $503.9b of assets cross invested between managed funds institutions whilst the unconsolidated assets of superannuation (pension) funds increased $54.4b (3%), public offer (retail) unit trusts increased $4.5b (2%), life insurance corporations increased $4.3b (2%), cash management trusts increased $0.8b (3%), and common funds increased $0.2b (2%). Friendly societies were flat.
The ABS just released their Managed Funds data to September 2014. The managed funds industry had $2,439.5b funds under management, an increase of $26.6b (1%) on the June quarter 2014 figure of $2,412.8b. The main valuation effects that occurred during the September quarter 2014 were as follows: the S&P/ASX 200 decreased 1.9%; the price of foreign shares, as represented by the MSCI World Index excluding Australia, increased 2.4%; and the A$ depreciated 7.6% against the US$.
The consolidated assets of managed funds institutions were $1,922.7b, an increase of $20.0b (1%) on the June quarter 2014 figure of $1,902.7b. The asset types that increased were overseas assets, $16.8b (5%); deposits, $4.4b (2%); short term securities, $2.5b (3%); units in trusts, $2.3b (1%); land, buildings and equipment, $0.6b (0%); and shares, $0.1b (0%). These were partially offset by decreases in other financial assets, $5.8b (16%); bonds, etc., $0.5b (0%); other non-financial assets, $0.2b (2%); and loans and placements, $0.2b (0%). Derivatives were flat. There were $484.7b of assets cross invested between managed funds institutions.
Unconsolidated assets of superannuation (pension) funds increased $24.3b (1%), life insurance corporations increased $3.0b (1%), public offer (retail) unit trusts increased $1.9b (1%), cash management trusts increased $0.6b (2%), common funds increased $0.2b (2%), and friendly societies increased $0.1b (1%).
The ABS released their data for the managed funds industry to June 2014 today. At 30 June 2014, the managed funds industry had $2,405.3b funds under management, an increase of $46.1b (2%) on the March quarter 2014 figure of $2,359.2b. The main valuation effects that occurred during the June quarter 2014 were as follows: the S&P/ASX 200 was flat; the price of foreign shares, as represented by the MSCI World Index excluding Australia, increased 4.2%; and the A$ appreciated 2.2% against the US$.
At 30 June 2014, the consolidated assets of managed funds institutions were $1,895.3b, an increase of $31.3b (2%) on the March quarter 2014 figure of $1,864.0b. The asset types that increased were units in trusts, $12.5b (6%); shares, $9.2b (2%); overseas assets, $9.0b (3%); loans and placements, $4.8b (11%); bonds, etc., $3.3b (3%); short term securities, $2.1b (3%); and derivatives, $0.2b (16%). These were partially offset by decreases in other financial assets, $5.0b (12%); deposits, $4.5b (2%); other non-financial assets, $0.3b (2%); and land, buildings and equipment, $0.1b (0%).
