The Australian share market recovered some of its recent losses in April, with the All Ordinaries index closing the month 3.5% higher at 6,071.60 points. The Australian Dollar continued its recent slide, falling by 1.7% in April, with 1 Australian dollar now buying 75.43 US cents.
As noted in last months' newsletter, the Reserve Bank of Australia (RBA) board kept the official Cash Rate on hold at 1.50% per annum in April. The RBA board will meet again today, with rates once again expected to remain on hold.
Global share market returns were positive across the board in April, as fear of a "trade-war" between the United States and China eased. The United States Dow Jones index gained by 0.2%, the London FTSE gained by 6.4%, the Japan Nikkei 225 gained by 5.0% and the Hong Kong Hang Seng Index gained by 2.4% in the month.
The Royal Commission into the banking and financial services industry dominated media reports in April. While it is only early stages, the inquiry has already uncovered shocking revelations of dishonesty and misconduct within some of Australia's largest financial institutions.
The clear message coming from the Royal Commission is that "vertical integration" within financial institutions is leading to some poor advice outcomes for the public.
It is worth noting that based on publicly available Royal Commission background papers, 44% of all financial advisers operate under a licence controlled by the largest 10 financial institutions. A further 30% of the total number of financial advisers on ASIC's Financial Advisers Register work for one of the major banks.
It is clear that financial institutions have had a significant controlling interest in the financial advice market for some time.
I note that Apex Partners is a privately-owned financial advice and wealth management business. We are an authorised representative of Capstone Financial Planning, a 100% privately-owned national Australian Financial Services Licensee that has no alignment to any bank or financial institution.
My focus is, and always has been, assessing the most appropriate financial strategy (as associated investment products) for a clients' needs and circumstances with no bias towards any particular product provider. I firmly believe that the ownership structure of Apex Partners allows this to happen without any competing interests.
Time will tell what regulations will follow from the Royal Commission's findings. I do expect further regulations to come as the financial services industry attempts to regain the trust of the public.
For more information, please contact Ryan Love on 1300 856 338.
This article is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.