When three's not a crowd

Are two mums really better than a mum and dad? (Sunday Life yesterday) As a mother of teenage boys I’m eternally grateful to the uniquely male nurturing role provided by their father. I don’t know if I could dish out the buck-stops-here type discipline, the honing of steel with steel required to turn an adolescent boy into a fearless, stable and happy man. Many of the children referred to in the study are already in their late teens so the double act of mums must be getting it right.

Thinking about it further, the female led homes obviously work well for 2 reasons. Firstly, lesbians don’t have babies by accident. By definition this act of procreation takes enormous effort and soul searching – you’d have to really want to be a parent. The type of gal embarking on this journey is likely to be a dedicated and considered mother.

Secondly, women get it when it comes to how much energy and skill it takes to run a home, look after the kids and juggle a job. It would be fantastic to be able to second-guess your partner and really support them, walking the talk on real sharing of the household duties. No nagging or trying to justify how the day has been spent.

In fact I like the idea a lot. One key ingredient lacking for the heterosexuals among us is the, er…physical intimacy part. Mènage à trois, perhaps?

Doing it for themselves...philanthropy with purpose

So the richest man in Australia is now a woman. Gina Rinehart, Chairman of Hancock Prospecting, is worth $9bn and tops Forbes list of Richest Australians. The reference to her as Australia’s richest “man” is purely tongue in cheek - not 5 years ago, to have a woman topping the list would have been pretty much unthinkable.

One wonders how many millions or billions one would have to amass before feeling inclined to make a sizable financial contribution to society? Not commenting on Rinehart, for all I know she has dispensed generously to community projects close to her heart, but I am a firm subscriber to the “with wealth comes social responsibility” belief.

But what does that mean nowadays, particularly for wealthy women? How and why do women give? Traditionally, women who have inherited their means regard themselves merely as custodians of their parent/spouse’s interests, with boys’ private schools, museums and galleries being happy recipients of their benevolence. Actually women’s causes don’t get much of a look-in overall, with statistics showing they have attracted less than 10% of charitable grants globally.

Luckily this is changing with the financial empowerment of women, and the increase in those who are self-made. A growing trend is to combine donating with doing. Take the provision of micro finance to mothers (shown to be a direct route to enfranchise the poor) – it is something our generation of “kitchen tycoons” can relate to.

The acceleration of social change focused on the advancement of women and girls is a driving force behind much of the female philanthropic dollar today. Although the financial returns may be lower than conventional investment opportunities, the social returns make it more than worthwhile. And giving in this way makes good business sense too – raising a woman from poverty, homelessness or unemployment, will generally see her children and other family members emerge too.

How rewarding to be able to fund those causes that lie really close to one’s heart, those that feed one’s passions and underpin one’s values? Helping sisters do it for themselves.

A Rose by any other Name...

I’m a bit grumpy today. I have just had a somewhat tense discussion with my financial planner about my account with him, which consists of a number of managed funds. That would be the first conversation we have had in quite a while. Said lack of conversations was one topic in the tense discussion.

Anyhow, I digress. What’s really peeving me is this:

Through the wrap account I established, every month a certain percentage of my funds are paid to him as an “ongoing adviser fee”. Don’t get me started on whether what goes on constitutes “ongoing financial advice”. It is more like “put your money into this, we’ll send you a couple of reports every few months and you should be very grateful for that”.

The percentage is meant to cover an annual or semi-annual review plus general advice throughout the year. I have never been contacted for a review (and yes, I do believe that as part of the client relationship deal there should be initiation of contact by the planner). Emails and phone calls have not been responded to in a timely manner and when I have contacted him about a change in my circumstances I have been waved away with a highhanded gobbledegook explanation of why I’m so lucky to be in the funds I am. I could go on, but suffice to say I feel disappointed. Maybe expectations on my behalf are high but to me it is not an inconsequential amount to pay someone on an annual basis for a service.

The push to move away from a commission based payments to planners has been under the microscope for a while through a Parliamentary Joint Committee Inquiry in 2009 and via media discussion resulting from high profile collapses of Storm Financial and Opes Prime. The percentage of assets under management seems to have replaced the commission model but I ask you, what’s the diff?

I pay an amount per month no matter what level of advice or performance of the underlying investments. When I enquired about moving my account to another financial planner, guess what? I shall have to sell a number of the funds (and pay capital gains on the smallish gain) and reinvest. It’s not the capital gains so much as feeling stitched up and tied to this firm because they have a special deal with a particular fund manager for some of the investments I have been (funnily enough) advised to go into. Individuals should have the right to move their accounts around if they decide to change advisers with little or no penalty. I take it on the chin that perhaps I missed this in the fine print (refer previous blog for that issue!) and in future will be asking a few more probing questions when taking advice on going into certain investments. Lesson learnt.

But…FWIWIMO (for those not conversant in teenager speak: “for what it’s worth in my opinion”) the system of charging a percentage of funds invested carries flaws in rewarding planners and offering value for money for clients, as did its previous incarnation as a commission. At this stage I offer no real viable solution or alternative than an hourly rate fee for service model.

If it walks like a duck, looks like a duck and quacks like a duck…it must be a duck. In this case if it acts like a commission and charges like one…well you can work out the rest!!

Rant complete. Have a great week.