The end is nigh
By
Kate Kachor
Mon 07 Dec 2009
The rollercoaster ride of 2009 is almost at an end.
I'm sure it's safe to say it's not a ride many would voluntarily take a seat on again.
Despite the Australian market faring relatively well amid one of the worst global economic downturns, there were still casualties.
The beginning of 2009 gave investors and industry participants little time to grasp the impact of the crisis.
As the swallowing up of superannuation money continued onwards from the end of 2008, planners called for calm, unaware they were about to be caught in a Storm.
Investment markets took stock, with investors shifting funds out of high-risk vehicles into the safe haven of cash.
Savvy product providers lured investors back into the market with capital-protected products.
Fund freezes took many by surprise, with the government and corporate regulator remaining on high alert through much of 2009.
The swinging axe indiscriminately sliced through the industry, with back-office staff to high-level executives to mid-tier planners quickly felled.
While not the bloodbath of the industry's international counterparts, job losses turned to cost cuts across all sectors, resulting in plummeting morale that mirrored the sliding share market.
By mid-year, Australia's financial services stood on the edge of an irreversible downward spiral.
However, a second wind gave many hope that the second half of 2009 would bring with it positive change.
By June 2009, a parliamentary inquiry into the corporate collapses of Storm Financial, Timbercorp and Great Southern was well underway.
Industry bodies the FPA and Investment and Financial Services Association had gained kudos from industry peers for their stand on fairer opportunities for consumers, with a call for a move away from commissions and choice in super fees respectively.
Cashed up firms swooped on struggling firms, big and small, picking them apart like vultures feasting on fresh prey.
BlackRock announced it had executed a purchase agreement to acquire Barclays Global Investors, including the iShares exchanged-traded funds unit, in a US$13.5 billion deal.
Merger and acquisition activity experienced a spike with MLC the successful bidder for Aviva's wealth management business; while in September, ING agreed to sell its 51 per cent stakes in ING Australia and ING New Zealand to ANZ.
Investors also took matters into their own hands, with victims of the failures of Lehman Brothers and Storm Financial hitting back.
A number of councils have taken action against the Australian operation of Lehman Brothers over the sale of collateralised debt obligations.
Meanwhile, the Storm Investors Consumer Action Group has been very vocal in lobbying for Commonwealth Bank of Australia (CBA) to offer compensation over Storm.
CBA has begun hearing claims as part of its scheme of resolution agreement over its involvement in the Storm collapse.
November saw the release of the much-awaited Ripoll report.
The handing down of the 11 recommendations for changes to Australia's financial services industry was greeted with mixed reviews, though no doubt will signal a period of renewal for the industry.
|
