The Best interests duty in the future of financial advice reforms : striking a balance between certainty and flexibility

Presentation delivered to the Australian and New Zealand Consumer Law Roundtable held at the University of Melbourne Law School on Friday, 16 November 2012. The paper covers the background to the 'Future of Financial Advice' reforms and their context. In addition to this the scope of best interests duty is discussed. The paper concludes with an assessment of the likely effectives of best interest duty as a consumer protection measure.

Submission on Financial Planning Association Consultation Paper

This report was submitted to the Financial Planning Association and is confined to the proposals in relation to compliance with the Best Interests duty (Part B) and the provision of Scaled Advice (Part C) in the FPA Consultation Paper, Modifications to the FPA Code of Professional Practice to incorporate FoFA, released in October 2012.

The financial life well-lived: psychological benefits of financial planning

As the financial planning industry undergoes a series of reforms aimed at increased professionalism and improved quality of advice, financial planner training in Australia and elsewhere has begun to acknowledge the importance of interdisciplinary knowledge bases in informing both curriculum design and professoinal practice (e.g. FPA2009). This paper underscores the importance of the process of financial planning by providing a conceptual analysis of the six step financial planning process using key mechanisms derived from theory and research in cognate disciplines such as psychology and well-being. The paper identifies how these mechanisms may operate to impact client well-being in the financial planning context. The conceptual mapping of th emechanisms to process elements of financial planning is a unique contribution to the financial planning literature and offers a further framework in the armamentarium of researchers interested in pursuing questions around the value of financial planning. The conceptual framework derived from the analysis also adds to the growing body of literature aimed at developing an integrated model of financial planning.

When financial incentives do more good than harm : a checklist

Financial incentives can sometimes improve the quality of clinical practice, but they may also be an expensive distraction. Paul Glasziou and colleagues have devised a checklist to help prevent their premature or inappropriate implementation

Essays on volatility and liquidity in financial markets

The price formation of financial assets is a complex process. It extends beyond the standard economic paradigm of supply and demand to the understanding of the dynamic behavior of price variability, the price impact of information, and the implications of trading behavior of market participants on prices. In this thesis, I study aggregate market and individual assets volatility, liquidity dimensions, and causes of mispricing for US equities over a recent sample period. How volatility forecasts are modeled, what determines intradaily jumps and causes changes in intradaily volatility and what drives the premium of traded equity indexes? Are they induced, for example, by the information content of lagged volatility and return parameters or by macroeconomic news, changes in liquidity and volatility? Besides satisfying our intellectual curiosity, answers to these questions are of direct importance to investors developing trading strategies, policy makers evaluating macroeconomic policies and to arbitrageurs exploiting mispricing in exchange-traded funds. Results show that the leverage effect and lagged absolute returns improve forecasts of continuous components of daily realized volatility as well as jumps. Implied volatility does not subsume the information content of lagged returns in forecasting realized volatility and its components. The reported results are linked to the heterogeneous market hypothesis and demonstrate the validity of extending the hypothesis to returns. Depth shocks, signed order flow, the number of trades, and resiliency are the most important determinants of intradaily volatility. In contrast, spread shock and resiliency are predictive of signed intradaily jumps. There are fewer macroeconomic news announcement surprises that cause extreme price movements or jumps than those that elevate intradaily volatility. Finally, the premium of exchange-traded funds is significantly associated with momentum in net asset value and a number of liquidity parameters including the spread, traded volume, and illiquidity. The mispricing of industry exchange traded funds suggest that limits to arbitrage are driven by potential illiquidity.

Interim financial reporting in the Asia-Pacific region : a review of regulatory requirements

This paper addresses the question of how interim financial reporting regulation varies across the Asia-Pacific region. Using a content analysis method, the study investigates the relevant regulations in eight selected countries in the Asia-Pacific region which differ in a number of country-level attributes. We find that the regulations in the region show considerable variation in terms of the form of regulatory enforcement, reporting lag, audit requirements, and reporting form. By providing the first in-depth review of the nature of differences in interim financial reporting in key countries in the Asia-Pacific region, the findings of this study will be of interest to investors, regulators and researchers in their quest for international “convergence” in financial reporting practices.

Does board gender diversity have a financial impact? Evidence using stock portfolio performance.

There is growing regulatory pressure on firms worldwide to address the under-representation of women in senior positions. Regulators have taken a variety of approaches to the issue. We investigate a jurisdiction that has issued recommendations and disclosure requirements, rather than implementing quotas. Much of the rhetoric surrounding gender diversity centres on whether diversity has a financial impact. In this paper we take an aggregate (market-level) approach and compare the performance of portfolios of firms with gender diverse boards to those without. We also investigate whether having multiple women on the board is linked to performance, and if there is a within-industry effect. Overall, we do not find evidence of an association between diversity and performance. We find some weak evidence of a negative correlation between having multiple women on the board and performance, but that in some industries diversity is positively correlated with performance.

The financial cost of hamstring strain injuries in the Australian Football League

Background/Aim Hamstring strain injuries (HSIs) have remained the most prevalent injury in the Australian football league (AFL) over the past 21 regular seasons. The impact of HSIs in sport is often expressed as regular season games missed due to injury. However the financial cost of athletes missing games due to injury has not been investigated. The aim of this report is to estimate the financial cost of games missed due to HSIs in the AFL. Method Data was collected using publically available information from the AFL’s injury report and the official AFL annual report for the past 10 competitive AFL seasons. Average athlete salary and injury epidemiology data was used to determine the average yearly financial cost of HSIs for AFL clubs and the average financial cost of a single HSI over this time period. Results Across the observed period, average yearly financial cost of HSIs per club increased by 71% compared to a 43% increase in average yearly athlete salary. Over the same time period the average financial cost of a single HSI increased by 56% from $25,603 in 2003 to $40,021 in 2012, despite little change in HSI rates during the period. Conclusion The observed increased financial cost of HSIs was ultimately explained by the failure of teams to decrease HSI rates, but coupled with increases in athlete salaries over the past 10 season. The information presented in this report will highlight the financial cost of HSIs and other sporting injuries, raising greater awareness and the need for further funding for research into injury prevention strategies to maximise economical return for investment in athletes.

The ACEN Student Scholarship: a profile of financial hardship and Work Integrated Learning

An increasing emphasis on embedding Work-Integrated Learning (WIL) in the curriculum has impacted on teaching and learning approaches in Australian higher education institutions (Higher Education Base Funding Review: Final Report, 2011). Yet whilst the benefits and costs of these approaches have been identified (Bradley, Noonan, Nugent, & Scales, 2008; Patrick et al., 2009) insufficient attention has been paid to financial costs experienced by students studying subjects with a Work Integrated Learning component. In 2010 the Australian Collaborative Education Network (ACEN) responded to this issue by offering three modest student scholarships based on evidence of hardship. Data collected from over 1000 applicants between 2010 and 2012 indicate travel, accommodation, food, clothing, equipment and loss of income are of major concern especially for students on lengthy placements involving relocation. At the same time the Australian Federal Government’s review of base funding has recommended a detailed assessment of the costs of providing student placements across all disciplines - in particular health and education (DEEWR, 2011, p.94). This paper considers costs from the student perspective and highlights major concerns identified through ACEN scholarship applications over a three year period. The implications for ACEN are described and recommendations documented which outline ACEN’s role in ensuring that these issues are given greater consideration across the sector.

Resources for improving journalists' understanding of the economic and financial parameters of Australia's agricultural and commodity producers

The research addresses how an understanding of the fundamentals of economics will better inform general journalists who report on issues or events affecting rural and regional Australia. The research draws on practice-based experience of the author, formal economics studies, interviews with news editors from Australian television news organisations, and interviews from leading economists. A guidebook has also been written to help journalists apply economic theories to their reporting. The guidebook enables reporters to think strategically and consider the 'big picture' when they inform society about policies, commodity trade, the environment, or any issues involving rural and regional Australia.

Issues in Financial Accounting [15th edition]

"Issues in Financial Accounting addresses the controversial issues in financial accounting that have been debated by the preparers, users, auditors and regulators of financial statements. Students are presented with real-world examples, current debates and the underlying rationale for the accounting concepts demonstrated. Throughout the text, academic studies and professional accounting research are referenced to also provide a critical understanding of historical debates in financial accounting. The new 15th edition covers significant recent developments to the accounting standards in Australia and is based on the AASB standards and interpretations that have been issued up to the end of 2012. This includes the Australian Accounting Standard Board's (AASB) program of changes to make accounting standards equivalent to International Financial Reporting Standards."---publisher website

Financial Markets, Institutions and Money [3rd ed.]

"The financial system is a key influencer of the health and efficiency of an economy. The role of the financial system is to gather money from people and businesses that currently have more money than they need and transfer it to those that can use it for either business or consumer expenditures. This flow of funds through financial markets and institutions in the Australian economy is huge (in the billions of dollars), affecting business profits, the rate of inflation, interest rates and the production of goods and services. In general, the larger the flow of funds and the more efficient the financial system, the greater the economic output and welfare in the economy. It is not possible to have a modern, complex economy such as that in Australia, without an efficient and sound financial system. The global financial crisis (GFC) of late 2007–09 (and the ensuing European debt crisis), where the global financial market was on the brink of collapse with only significant government intervention stopping a catastrophic global failure of the market, illustrated the importance of the financial system. Financial Markets, Institutions and Money 3rd edition introduces students to the financial system, its operations, and participants. The text offers a fresh, succinct analysis of the financial markets and discusses how the many participants in the financial system interrelate. This includes coverage of regulators, regulations and the role of the Reserve Bank of Australia, that ensure the system’s smooth running, which is essential to a modern economy. The text has been significantly revised to take into account changes in the financial world."---publisher website Table of Contents 1. The financial system - an overview 2. The Monetary Authorities 3. The Reserve Bank of Australia and interest rates 4. The level of interest rates 5. Mathematics of finance 6. Bond Prices and interest rate risk 7. The Structure of Interest Rates 8. Money Markets 9. Bond Markets 10. Equity Markets

Encouraging, assisting, and time to eat : comparison of mealtime assistance interventions in elderly medical inpatients

BACKGROUND: The prevalence of protein-energy malnutrition in older adults is reported to be as high as 60% and is associated with poor health outcomes. Inadequate feeding assistance and mealtime interruptions may contribute to malnutrition and poor nutritional intake during hospitalisation. Despite being widely implemented in practice in the United Kingdom and increasingly in Australia, there have been few studies examining the impact of strategies such as Protected Mealtimes and dedicated feeding assistant roles on nutritional outcomes of elderly inpatients. AIMS: The aim of this research was to implement and compare three system-level interventions designed to specifically address mealtime barriers and improve energy intakes of medical inpatients aged ≥65 years. This research also aimed to evaluate the sustainability of any changes to mealtime routines six months post-intervention and to gain an understanding of staff perceptions of the post-intervention mealtime experience. METHODS: Three mealtime assistance interventions were implemented in three medical wards at Royal Brisbane and Women's Hospital: AIN-only: Additional assistant-in-nursing (AIN) with dedicated nutrition role. PM-only: Multidisciplinary approach to meals, including Protected Mealtimes. PM+AIN: Combined intervention: AIN + multidisciplinary approach to meals. An action research approach was used to carefully design and implement the three interventions in partnership with ward staff and managers. Significant time was spent in consultation with staff throughout the implementation period to facilitate ownership of the interventions and increase likelihood of successful implementation. A pre-post design was used to compare the implementation and nutritional outcomes of each intervention to a pre-intervention group. Using the same wards, eligible participants (medical inpatients aged ≥65 years) were recruited to the preintervention group between November 2007 and March 2008 and to the intervention groups between January and June 2009. The primary nutritional outcome was daily energy and protein intake, which was determined by visually estimating plate waste at each meal and mid-meal on Day 4 of admission. Energy and protein intakes were compared between the pre and post intervention groups. Data were collected on a range of covariates (demographics, nutritional status and known risk factors for poor food intake), which allowed for multivariate analysis of the impact of the interventions on nutritional intake. The provision of mealtime assistance to participants and activities of ward staff (including mealtime interruptions) were observed in the pre-intervention and intervention groups, with staff observations repeated six months post-intervention. Focus groups were conducted with nursing and allied health staff in June 2009 to explore their attitudes and behaviours in response to the three mealtime interventions. These focus group discussions were analysed using thematic analysis. RESULTS: A total of 254 participants were recruited to the study (pre-intervention: n=115, AIN-only: n=58, PM-only: n=39, PM+AIN: n=42). Participants had a mean age of 80 years (SD 8), and 40% (n=101) were malnourished on hospital admission, 50% (n=108) had anorexia and 38% (n=97) required some assistance at mealtimes. Occasions of mealtime assistance significantly increased in all interventions (p<0.01). However, no change was seen in mealtime interruptions. No significant difference was seen in mean total energy and protein intake between the preintervention and intervention groups. However, when total kilojoule intake was compared with estimated requirements at the individual level, participants in the intervention groups were more likely to achieve adequate energy intake (OR=3.4, p=0.01), with no difference noted between interventions (p=0.29). Despite small improvements in nutritional adequacy, the majority of participants in the intervention groups (76%, n=103) had inadequate energy intakes to meet their estimated energy requirements. Patients with cognitive impairment or feeding dependency appeared to gain substantial benefit from mealtime assistance interventions. The increase in occasions of mealtime assistance by nursing staff during the intervention period was maintained six-months post-intervention. Staff focus groups highlighted the importance of clearly designating and defining mealtime responsibilities in order to provide adequate mealtime care. While the purpose of the dedicated feeding assistant was to increase levels of mealtime assistance, staff indicated that responsibility for mealtime duties may have merely shifted from nursing staff to the assistant. Implementing the multidisciplinary interventions empowered nursing staff to "protect" the mealtime from external interruptions, but further work is required to empower nurses to prioritise mealtime activities within their own work schedules. Staff reported an increase in the profile of nutritional care on all wards, with additional non-nutritional benefits noted including improved mobility and functional independence, and better identification of swallowing difficulties. IMPLICATIONS: The PhD research provides clinicians with practical strategies to immediately introduce change to deliver better mealtime care in the hospital setting, and, as such, has initiated local and state-wide roll-out of mealtime assistance programs. Improved nutritional intakes of elderly inpatients was observed; however given the modest effect size and reducing lengths of hospital stays, better nutritional outcomes may be achieved by targeting the hospital-to-home transition period. Findings from this study suggest that mealtime assistance interventions for elderly inpatients with cognitive impairment and/or functional dependency show promise.

Subsidies of the Australian clean energy package

The Australian Clean Energy Package has been introduced to respond to the global challenge of climate change and reduce Australia’s greenhouse gas emissions. It includes legislation to establish an emissions trading scheme. In support of the entities that are liable under this Package, there are a number of assistance measures offered to alleviate the financial burden that the Package imposes. This paper considers whether these assistance measures are subsidies within the context of the law of the World Trade Organization. In order to do this, the rules of the Agreement on Subsidies and Countervailing Measures are examined. This examination enables an understanding of when a subsidy exists and in what circumstances those subsidies occasion the use of remedies under the law.