By Leon Gettler >>

THE Royal Commission is opening new markets for small operators moving into wealth management.

Simon Madder, the CEO of Prime Financial, said banks were now getting out of wealth management following the shellacking they got at the Royal Commission, opening the way for small businesses.

And they do it much better than the banks, simply because the banks are too big. 

“I think in its simplest form, personalised service,” Mr Madder told Talking Business. “I think there’s a challenge in getting too big and I think if you don’t have the right systems and processes and you’re not close enough to the customer or client, then the theory of what you’re trying to do versus the practice can become quite different.

“I’m not suggesting that banks in the past haven’t put clients first…but perhaps it’s been more product driven than advice or service based.”

Mr Madder said it was understandable why banks had originally moved into wealth management. It was all to sell their clients more services and products, such as insurance.

But banks had moved away from that because it was too difficult.

“You can understand given some of the challenges that have been faced and trying to disentangle the products from the advice piece why the majority of the banks and the investment banks have headed away from it,” Mr Madder said.

He said the findings of the Hayne Commission had shaken the industry.

“In its simplest form, it was shining a light on practices that were fairly questionable.”

The problem with the banks is they had put the product first, ahead of service to the client.

The Royal Commission also raised questions about educational standards and making sure the right people were there giving advice to a client.

“Absolutely it’s impacting, whether it’s a large institution or independent non-bank owned advisory firms,” Mr Madder said. 

“Rightly, clients are asking questions and that can only be a good thing, I would have thought.”

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at


DIGITAL banking platform start-up, Trade Ledger, was named the Ashurst Fintech Start-up of the Year for 2018 after expanding into the UK market and signing up a series of major deals in its first year.

The award goes each year to an Australian financial technology (fintech) start-up ‘that has disrupted the financial services sector with new and innovative services, creating competition and transforming the way we experience financial services’.

Trade Ledger has managed this by being the first corporate lending platform in the world to automate the entire credit assessment process, assess SME supply chain data in real-time, and calculate risk – down to the individual invoice. 

This allows banks and other business lenders to tap into the A$90 billion of unmet business credit demand in Australia, and US$2.1 trillion globally.

“As the global economy transitions towards smaller, high-growth businesses – our all-important start-up and innovation ecosystem – business lenders have an obligation to learn how to supply working capital desperately needed by these businesses of the future,” Trade Ledger CEO and co-founder Martin McCann said.

“Australian banks and business lenders also face risks on several fronts. On the one hand, they need to improve both their cost/income ratio and their capital efficiencies within this segment that is traditionally considered as high risk.

“On the other, they are facing increased competition from technology behemoths such as Amazon, Tencent, and eBay, who are all threatening to use their hordes of data to enter financial services.

“The Trade Ledger platform equips these lenders with the same degree of technological proficiency as these massive tech firms, while arming them with the tools needed to meet our booming innovation ecosystem’s need for credit,” Mr McCann said.

This is the third year of the FinTech Awards. The awards owner, Glen Frost, said he was particularly impressed with both the quality and quantity of this year’s applications.

“The 3rd Annual FinTech Awards recognise and reward the innovators and the risk takers,” Mr Frost said. “To be recognised by your peers for your innovation and entrepreneurial spirit will sustain you through the tough times, it will motivate you, and it will show your customers, investors and staff, that you’ve got what it takes.

“I congratulate Martin McCann, and his team at Trade Ledger, on winning the Ashurst FinTech Startup of the Year.”


SUPERANNUATION funds could provide growth capital for businesses large and small, according to a new discussion paper from Industry Super Australia.

Under the right circumstances, superannuation funds could be directed to complement more traditional capital sources such as banks, according to the paper’s author, Industry Super Australia chief economist Stephen Anthony. 

Dr Anthony’s paper, Should superannuation funds do more direct lending to business?  argues that super funds’ traditionally low asset allocation towards credit to non-financial corporations could be improved via an upgrading of funds internal assessment capacities or via partnerships with banks. 

Dr Anthony said currently Australian banks and overseas investors – including pension funds – were the dominant players in lending to domestic non-financial corporations.

Dr Anthony said research showed that today there was significant untapped potential for super funds in this asset class.

“Expanding superannuation funds’ presence in direct lending will help local business grow and deliver economic benefits,” Dr Anthony said. “We are in a better position to commit to long-term loans in Australian dollars – one important factor as businesses doesn’t need to worry about currency risks.

“SMEs need better access to both debt and equity capital and super funds can help. But any arrangements need to offer attractive returns to funds”

Dr Anthony said the recent spate of corporate leaders calling for super funds to participate more in this space needed to package propositions with more of an eye to returns for super fund members and how the superannuation system works.

“Businesses calling for more super fund participation in direct lending should recognise that funds’ capacity in this area relies on steady and growing inflows from workers’ contributions – facilitated by the existing default superannuation system,” he said. “Business needs to be aware of this and continue to support and enhance the default system that may ultimately deliver the funding they need one day.”

Industry Super Australia is an organisation that provides policy, research and advocacy on behalf of 16 not-for-profit industry super funds, as the custodians of the retirement savings of six million Australians.


THE INSTITUTE of Public Accountants (IPA) has submitted its pre-Budget submission to the Federal Government urging for action on an array of policy fronts -- in particular, the need for genuine and holistic tax reform.

“Our pre-Budget submission is closely aligned with our Australian Small Business White Paper with many recommendations to support the productivity and growth of the sector,” IPA chief executive officer, Andrew Conway said. 

“Unless Australia can stem the tide of the flagging productivity levels, our economy will continue to decline and our current living standards will suffer accordingly.

“Taxation is just one area that can stimulate economic growth if done correctly," he said.

“Currently we are seeing tax policy proposals from the Government and the Opposition which are quite disparate and we need all parties to be at least roughly on the same page if true and bold tax reform is to take place.

“The community needs to give the Government and Opposition to have the robust conversation on tax that is required.

“All Australians need to stand up and put the public interest ahead of political and self-interest.

“We will continue to voice our disappointment and frustration with the stalled tax reform process.

“A piecemeal approach is sub-optimal and may even prove harmful to long term reform,” Mr Conway said.

More information on the IPA’s pre-Budget submission:


MORE self-funded retirees are becoming aware of the implications of Labor’s proposal to remove the ability for individuals and superannuation funds to claim their full entitlement to franking credits and the Institute of Public Accountants (IPA) is questioning the unfairness of the proposed policy.

“The refunding of imputation credit policy has been in operation for close to two decades and removing it in a piecemeal way without dealing with the consequences is fraught with danger,” IPA chief executive officer, Andrew Conway said.

“Piecemeal change fails the fairness and equity test that policy makers generally strive for. 

“Any policy change that has inconsistent outcomes -- industry funds versus SMSFs, pension guarantee rule -- will struggle to meet the fairness test.  In addition, retirees with large balances in excess of $1.6 million in superannuation are also less impacted than those with lower balances," Mr Conway said.

“More importantly we need to be looking at how we tax all forms of savings more consistently. A more holistic approach to taxing personal savings across all asset classes, as recommended by the Henry Review, would be more beneficial than changing one aspect in isolation.

“We do not support any changes in the removal of refundable franking credits unless it is associated with more holistic tax changes to the treatment of savings more broadly.  A survey of our members also shows that 95 percent of respondents do not support any change.

“The inquiry has put the spotlight on the policy proposal," Mr Conway said. "The IPA was represented at the inquiry, putting forward our members’ views, along with our submission."


By Leon Gettler >>

WITH SIGNS of a bear market at the end of last year, there were all sorts of warnings that 2019 would be a tough year for share markets.

But investors can expect a good year ahead in the markets, if they can deal with the volatility, says AMP chief economist Shane Oliver

Dr Oliver told Talking Business that there were some issues, like the uncertainty about trade and Donald Trump, still to be resolved.

“But I think this will be a better year for the simple reason that we don’t see a global recession, we don’t see a US recession any time soon,” Dr Oliver said. 

“Yes we have seen a slowdown in growth but we saw slowdowns in growth in 2015, 2016 and 2011 but they weren’t associated with global recession at the time.

“Consequently, if investors come to the view ‘We’re not going to have a recession after all, maybe it’s a few years down the track but we’re not there yet’.  Then share markets are pretty cheap, even at these levels,” Dr Oliver said.

“We still have an environment of pretty easy monetary global conditions globally.

“I think this will set up for a better year.”    

He said however that volatility would continue.

He said there was little volatility in 2017 but usually years of low volatility are followed by periods where it is high.

Dr Oliver said earnings growth this year would be more moderate compared with last year, which was helped by Donald Trump’s tax cuts which added 5-10 percent of earnings growth. 

He said earnings growth would slow from around 20 percent to about 5 percent. Still, the share market could rally in that sort of environment.

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at



By Leon Gettler >>

GLOBAL GROWTH is expected to slow down in 2019 with the data flow from China, the US, the Eurozone and Australia, according to economist Stephen Koukoulas.

Mr Koukoulas told Talking Business that while there was no sign at this stage of a recession or hard landing, growth will be slower in 2019.

“We have got the global economy easing back a notch and the big question for economists and markets is, how slow will it get?” Mr Koukoulas said.

He said the picture in Australia was complicated with the slowdown in the housing market and the tightening of credit, leaving businesses struggling to raise money. 

He said Prime Minister Scott Morrison’s election pledge to create 1.25 million jobs over the next five years was problematic.

He said the government’s budget forecasts in December had gross domestic product growing at 3.5 percent and employment growth at 1.5 percent.

“Even with those good numbers, you only have 950,000 jobs. Maybe has something up his sleeve in terms of pump priming for the economy, but it doesn’t look likely. He won’t achieve that.”

Mr Koukoulas said the Reserve Bank of Australia would have to do an about face and cut interest rates with inflation low and the economy weaker than expected.

He said gradual deceleration in China will affect the global economy, and Australia’s.

He said China was growing at the slowest rate in 28 years and China was now easing its monetary policy because of concerns it was slowing down a lot harder than first forecast.

“The thing that’s still lingering over the global economy is the Trump tariff wars,” he said.

Another issue was the political turmoil, of the shutdown in the US, Brexit, demonstrations in Paris and France and the election in Australia. All this has an impact on investors.

 “It doesn’t stop businesses from investing and consumers from spending but it has this marginal impact,” Mr Koukoulas said. 

“When you talk about an economy going at 2.5 or 3 percent, it doesn’t sound like much but it’s actually quite important for its implications for employment, for inflation. The softening of the economy becomes a little more acute.”


Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at

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