Insights

Corporate boards provide guidance and vision for the companies they represent. They’re responsible in equal measures for the successes and the failures.

Talk to any investor on the street, and they’ll likely share concern about share performance relative to the broader economy. A brutal earnings season is bearing this out all around the globe.

With the amount of general contraction happening in the broader economy, it’s easy to fall into a trap assuming that there are no opportunities for growth in the market.

As an incredibly liquid investment product, exchange traded funds have been a very useful tool for many investors – both institutional and retail – during the recent market volatility.

Without regard to whether giving Australians early access to their superannuation during these challenging times is a good idea or not, it’s clearly been exceptionally popular. Already the ATO has reported more than a half-million Australians have requested early access, a number that has continued to grow week-on-week.

Among the measures included in the government’s response to COVID-19 is providing easy access to professional financial advice. It’s something that was roundly welcomed by professional bodies, including CPA Australia, Chartered Accountants Australia and New Zealand, SMSF Association, Financial Planning Association, and the Institute of Public Accountants.

The unprecedented number of people seeking to talk to their fund, either regarding using the early release scheme or concerned about investment performance in exceptionally volatile times has caused a dip in customer satisfaction.

Despite the extreme volatility in the markets, savvy managers are still able to find value.

Amid the public-facing stimulus measures, like discounted childcare, there have been some measures put in place to support the financial advisers and planners who are on the front lines with people who are panicking about what’s happening with their retirement savings.

The last three weeks have been marked by three general periods. The first found us holding our collective breath, trying forecast what government would do to help mitigate what promised to be an ugly situation.

Adventures in infrastructure

Because of how superannuation investments are structured, liquidity could certainly become a concern if there is excessive demand.

All of Australia’s big four banks experienced a credit downgrade this week, part of the ongoing COVID-19 outbreak. Considering the extent of the fallout of the COVID-19 outbreak is yet to be known, it’s not a surprise.

Between the exceptional amount of superannuation members who are applying for an early release and those who are concerned about what to do with the volatility in the markets, call centres are being overwhelmed.

Zuper’s co-founder and CEO, Jess Ellerm, is pushing for the government to expand early access to people on temporary visas.

There have been stories of less-than-scrupulous landlords encouraging people to withdraw super to pay rent, something ASIC has come out strongly against. There’s a bigger question, however, around if people should be taking money out of their super at all.

As markets have capitulated over the past month, and investors struggle to keep their heads above water, many are desperately seeking investments with the potential to offer security during such an insecure time.

With all the talk of global recession and dead cats bouncing in the share markets, some economic forecasters are a bit more optimistic.

Even before the travel restrictions and general chaos in the last few weeks, companies were looking to move routine in-person events like shareholder meetings and annual general meetings (AGM) online. There are a few reasons to do it, like efficiency and cost savings, however a webinar can lack the engagement that an in-person event can have.

Taking time to manage your cashflow is one important way to protect your business during the economic downturn.