Monday, 5 November 2018

Net Worth: November 2018

Things that make you go hmmmm...

Oh well, the random walk down wall street took us head-first into a lamp-post last month. My NW is back down to where it was in September 2017, having dropped almost $100,000 during October. Up by the stairs, down by the elevator, as they say. It could have been even worse if I hadn't sold up a lot of my geared share holdings in June, so thank Plutus I decided to de-leverage rather than gear-up. The poor stock market performance was complimented by the continued decline in house prices in Sydney, so the only positive contribution to my net worth during October was the $225 reduction in our home mortgage.
Although I'd been aware of the market 'correction' happening during October, I didn't really pay much attention as I've been busy trying to finish off my assignments for the Diploma of Financial Planning course I'm doing (nearly there!) and the first subject of the Masters in Financial Planning course I'm enrolled in this semester. The Hayne Royal commission interim report has been laying bare the rampant greed and unethical behavior in the financial planning 'industry' in Australia, with the Big 4 banks coming in for special attention, along with the large financial planning 'groups' like IOOF and AMP. Several well-known ('celebrity') financial planners/firms closed up shop after having to front the Royal Commission. Combined with the major changes to regulation and education requirements for 'financial planners' coming into effect on 1 Jan 2019 I expect a lot of the 'old school' planners will be exiting the 'industry' during the next few years. Many of them had business models reliant of hefty commissions received when selling life insurance products, which is being wound back and is under pressure to be completely eliminated (like commissions on non-insurance investment products), and they would struggle to move to a fee-for-service business model. In addition, many of them do not have a uni degree, so would have to go 'back to school' to meet the education requirements for existing planners by the 2024 deadline. I'm trying to get my DFP and become a 'registered' financial planner before 31 Dec so I don't have to meet the supervision requirements for 'new' planners that comes into effect on 1 Jan 2019. There seems to have been a recent addition of the category 'career changer' that might spare me from the supervision requirement if I don't get registered before 1 Jan 2019, but it isn't clearly defined, and I'd still need to complete the Graduate Diploma in Financial Planning before being able to get registered in that case. So, full steam ahead with finishing off my DFP asap...

Hopefully the changes will 'professionalize' the financial planning industry in the next few years, and the exodus of existing planners and barriers to entry for new planners may reduce competition and increase demand - all good things for my intention to set up my own (part-time) financial planning business next year. We'll see how it goes.

ps. no diet updates at the moment, as I haven't been sticking to my diet plan, and haven't had time to go to the gym. Hopefully I'll get back on track after my uni exam at the end of this month.

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