LOOSE CHANGE
Sydney Morning Herald
Wednesday March 24, 2010
Guess the priceCommissions may be on the way out but consumers have no idea how much they should be paying for financial advice. A survey of consumers commissioned by super fund GESB found half think they should pay less than $500 a year for a five-year financial plan. Less than a quarter think between $501 and $1500 is about right, while only 1 per cent think $3001 to $4000 is a fair price to pay. The cost of a comprehensive plan, on average, is $3600.Barriers applyThe board of the Financial Planning Association has decided to exclude life insurance from its plan to phase out commissions on financial products. The FPA chief executive, Jo-Anne Bloch, says there are barriers to changing life insurance to fee-for-service and the cost of advice for life insurance would be too high for many, resulting in further underinsurance.Old world bestThe chief economist at Vanguard Investments, Joe Davis, says developed countries' indebtedness implies low economic growth. However, contrary to popular opinion, there is no correlation between gross domestic product growth and equity returns over the long term. While investor focus is on emerging markets, he says risks remain in these markets and some of the developed world's sharemarkets have fallen by so much they may provide better returns.Shortage of shelterThe Housing Industry Association has sounded the alarm on the housing shortage. Its Housing to 2020 report finds that, under current trends, the shortage will reach 466,000 dwellings by 2020. At the moment the shortage is 109,000 dwellings. The association puts the shortage down to planning restrictions, tax biases, labour shortages and a lack of affordable, well-located land.
© 2010 Sydney Morning Herald