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since the industry funds
started an advertising
awareness of how they
can distort advice.
if recommended by
inquiry and accepted
by the Government,
would go a long way
to bringing financial
closer to those of other
professions. Given the
industry has grown out
of the sales culture of
life insurance, it is a
very big step.
The global financial
crisis has discredited,
once and for all, the
regulatory regime of
since the Financial
Services Reform Act
came into effect in 2004
has been found wanting.
While planners have
been banned, these
actions have only come
after investors' money
was well and truly lost
and lives ruined.
Some people say ASIC
is culpable for not using
powers to better protect
investors and there is
truth in that.
The regulator has
never fully tested
the limits of its
power, which is more
considerable than it
lets on. In time, when a
full account is made of
how billions of dollars
were lost and the lives
of many thousands of
ASIC will be judged in a
harsher light than today.
For more than a
decade, it has been
testing planners with
shadow shops, where
people posing as inves-
tors are sent out to seek
advice from planners.
It has known better
than anyone else that
were being exposed to
negligent, shoddy and
conflicted advice, were,
by and large, allowed
to continue to operate
under the licensing
regime administered by
Investors were none
the wiser. They were
told that as long as
they used a licensed
adviser, they could be
of receiving, if not
good advice, then at
least advice that
was reasonable and
appropriate to their
But the regulator knew
that investors could
have no such assurance.
ASIC preferred to coach
the miscreants and
their employers in the
hope they would reform
It chose to remain
mute on policy improve-
ments, even though
it has been clear to
even the most casual
observer that the system
in place was flawed and
ASIC deflects blame
in its submission for its
lack of action by saying
it can only use the cards
dealt it by Government.
Section 945A of the
Corporations Act says
a planner must have a
reasonable basis for the
But it had no mean-
ing and no deterrent
value because what
advice was never tested
properly in the courts.
Let's hope the
in the submission are
reflective of a genuine
change of heart and a
much greater willing-
ness to tilt the balance
of the industry towards
From Page 13
Stock in Elders has been suspended
from trade after the company
failed to file its earnings report
before the official close of the reporting
Elders was one of eight companies
whose stock was suspended because the
August 31 deadline had been missed.
Elders went into a trading halt
Tuesday. The company asked the
Australian Securities Exchange to
suspend trading as it finalised details of
a planned capital raising.
Elders had already announced it
hoped to secure its future later this
week through an institutional-backed
$400 million-plus capital raising that
would trigger a new financing deal with
Having brought in insurer QBE as
a cornerstone investor through the
sale of its insurance businesses five
weeks ago, Elders yesterday began its
long-awaited recapitalisation, which is
believed to involve a one-for-one rights
issue to shareholders.
The offer of new stock is believed to
have been struck at a discount of more
than 20 per cent to the company's last
traded share price of 39 cents.
Elders' next set of accounts for
the 12 months to June 30, which will
be released at the same time as the
recapitalisation is completed, are due to
show debt of $800 million for the year.
But that will be before the benefits of
the latest sales and the injection of new
That new cash will help Elders' CEO
Malcolm Jackman seal a long-term
lending arrangement with Elders'
banks after a deadline for the expiry
of its current borrowing facilities was
extended until the end of this month to
allow him to complete the refinancing.
Malcolm Jackman is set to seal a refinancing deal.
Push to uncork finest wine Down Under
Foster's Group will attempt
to reintroduce consumers to
chardonnay -- switching them
away from New Zealand sauvi-
gnon blancs -- and to emphasise
the regional nature of Australian
wines as part of its effort to boost
"I think collectively as a wine
industry in Australia, we need
to put forward the message that
wines in Australia are not flabby,
old wines,'' David Dearie, the new
head of Foster's Australasian
wine division, said. ''They are
young, they are exciting, they are
As the industry struggles under
the weight of a wine glut -- despite
a smaller grape intake this year
than last year -- a group of family
winemakers, the head of Wine
Australia, Paul Henry, and the
Federal Minister for Agriculture,
Fisheries and Forestry gathered
this week at the Sydney Opera
House to launch a new marketing
campaign, Australia's First
Families of Wine.
Mr Dearie said he supported the
initiative, even though Foster's is
not a member of the group.
"Anything that gets Australian
wine front and centre helps.
"If you look at the growth of
Australian categories, it is being
driven by global brands, and
Foster's owns several of those.''
Now that New Zealand
sauvignon blanc is the top-
selling white wine in Australia,
winemakers such as Foster's with
huge amounts of chardonnay
in their vineyards are trying to
get consumers to try innovative
blends based on chardonnay.
"I think the styles of chardon-
nay have changed,'' Mr Dearie
"Those big old oaky, woody
chardonnays of the past have a
place to play, but there are some
of the newer, younger, vibrant
chardonnays coming in.''
The price for chardonnay
grapes in the Barossa Valley
fell this year despite a smaller
harvest, according to the
Phylloxera and Grape Industry
Board of South Australia.
On average, chardonnay grapes
in the Barossa sold for $612 a
tonne, down 28 per cent from $852
a tonne last year, even though 29
per cent less was purchased.
ASIC's submission has tipped the scales in favour of investors.
The oldest generation of each
of the wineries involved in the
Australia's First Families of Wine
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As at 30 June 2009 the Company had funds under
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recommendation in this advertisement is made without reference to
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and particular needs. Before acting on this general advice, you should
discuss with your investment adviser the appropriateness of this
recommendation to your own specific circumstances.
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