Wry & Dry

Croissants. 'Robo' advice not financial planning. NZ's RBA snafu.

Psst. What's a croissant?

The chief charmer of the French Republic, President Emmanuel Macron is in the Yoo Ess Aye, to meet with Tsar Trump.  There was no golf...

Trump golf french...but there was a welcoming breakfast.  Wry & Dry's correspondent was there.  And overhead the following:  

Trump (aside to waiter):  Psst, Joe, what is this?

Joe-the-waiter (just as quietly):  It's a French sort of bread, Mr President, not unlike a bagel.  It's called a croissant.

Trump (getting louder):  A crow-sent?  Funny name for a bagel.

Joe-the-waiter (even more quietly):  Yes, sir.

Trump (more loudly):  Do I cut it with a knife?

Joe-the-waiter (more quietly):  No, sir, you break with your fingers.  Small pieces, sir.

Trump (loudly):  Goddamit, Joe! I know how to get food into my mouth.

Macron (from the other side of la table): Monsieur President, eez soomthing ze matter?

Trump (trying to calm down): Goddamit, Manny.  This young fella here is trying to tell me how to eat a crow-sent.  I'm gonna terminate him by Twitter. 

Trump brings out mobile phone, and scrolls to Twitter, ready to terminate Joe-the-waiter.  But the phone rings.

Trump speaking into phone:  Hello, hello, Melania, is that you? (Blushes, turns away, speaks quietly, but angrily) Stormy, I've told you a goddam thousand times not to call me at work.  I'll call you tonight.

Macron (with concern):  Monsieur President, it must be so difficult. En La France, wives understand the needs of les hommes.

Trump (exasperated):  Err, no.  It's not what you think, Manny.  Stormy is my stock broker.  He put me into an Aussie stock named AMP.  Apparently, it's in more trouble than Hillary's publisher.

Macron (looking sympathetic): Votre Waterloo?

Trump (gloomily): Mate, it certainly is down the toilet. 

Note: M Macron is coming to Australia on 1st May for a brief visit.  Readers will know that there is a $50 billion submarine deal to be signed.  M. Macron should be paying for the croissants.

Meanwhile, back at the ranch...

Whilst Tsar Trump was being charmed by M. Macron, W&D was raking the autumn leaves (as instructed by Mrs W&D).  And humming "All the leaves are brown, and the sky is grey..." [1] as he went about the toil.  And the thought of falling leaves took his mind to AMP.  And its falling share price.

AMP share price

Only Readers who have been on Mars since February may have missed the extraordinary revelations of the Banking Royal Commission.  AMP currently has the podium award for embarrassment.

Royal Commission I: everyone has missed the point...

... except W&D, of course.

For all the excrement dropped from a great height on AMP, ANZ, CBA, NAB, Westpac, celebrity financial planners and ASIC there is one obvious fact that has been universally overlooked.

Excrement should be dropped on government.

Can of worms government policy

It is the complexity of Australia's retirement income regime that created the financial planning industry in the first place.  Readers will know that this regime is, more-or-less, the intersection of three overlapping sub-regimes:

1.  Tax legislation

2.  Centrelink benefits

3.  Superannuation legislation

That intersection is a massive car crash of amazing complexity.  And the financial planning industry has been built up to extract as much money as it possibly can from users of the regime.  This is done by the creation and sale of products that (a) might enhance the long-term after-tax outcome for clients and (b) will enhance the income of planners. 

Without the complexity, there would be little or no need for financial planners.  And AMP could go back to selling life insurance and the banks to home lending and Christmas Clubs.

And the politicians thinking how they can extract even more money from superannuants.

Shorten Turnbull piggy bank pensioner

Royal Commission II: the carpetbaggers arrive

Readers will remember the scene in the classic movie Gone With Wind, when after the South was devastated by the North in the American Civil War, the 'carpetbaggers' arrived from the North.  These were unscrupulous people seeking to take political and economic advantage of the desolated South.

As the Royal Commission causes much of the financial planning industry to be gone with the wind, so the media is being inundated with those offering alternative financial planning regimes.

Readers beware!

Firstly, product selling, whether in an in-house product or not, is not financial planning.  Yesterday, the head of Global Private Banking at one of the world's largest bank extolled its virtues because it recommends products on an 'open architecture basis'.  That is, it will recommend products from any company, not just its own.  Very honourable, sir.  But that's not financial planning.  That is product selling.  It is clear that the financial planning sections of at least AMP, ANZ, CBA, NAB and Westpac are nothing more than product sellers.

How good are your plans

Secondly, so-called 'robo advice' had its media day on Tuesday, with media releases and interviews with robo-advice companies.  Let W&D make it very clear to Readers: robo-advice is not financial planning.  It is simply product selling, but where the products are pre-determined by a human (nice touch) but allocated by a computer programme (using things called algorithms). 

Financial planning is the provision of 'personal financial advice'.  An outcome of personal financial advice might be recommendations of a series of 'products' or of services. 

Personal financial advice encompasses a whole range of advice, including asset or liability structuring, insurances, estate planning, investment strategies, tax management, family trusts, intergenerational wealth transfer issues, predator protection, superannuation optimisation, self-managed superannuation, etc.  

The provision of these types of services cannot be done by robo-advisers (where the selling feature of the suite of products is price) or product sellers (where the selling feature of the suite of products is a wide array of products).  

These types of services can only be effectively offered by smart people working within a team who take the time to understand a client's needs and persona.  And who understand all or most of the issues noted above.

So don't be mistaken.  Don't be misled.  If Readers wish personal financial advice they should eschew robo-advisers and product sellers.

$21 billion tax is in the mail

W&D is very impressed with a company called Apple.  This technology company is so successful that it will pay a A$21 billion tax bill to the government of Ireland out of petty cash.  Apple has over A$400 billion in cash.

Weirdly, the government of Ireland doesn't want that money.  Well, sort of.  Ireland gave tax breaks to Apple amounting to the A$21 billion.  But the EU said the breaks amounted to state aid and hence were illegal.

Apple and Ireland have appealed the EU's ruling.   

Cost of delivering a baby 

W&D has always been uncomfortable with the concept of a baby 'being delivered'.  It conjures up images of an unsteady postman on an aged bicycle placing a smelly package in a too-small letterbox.  Nonetheless, much of the UK was delighted with the Duchess of Cambridge delivering a baby boy on St George's Day (23rd April).

Having had to fork out much dosh when his children were delivered, W&D was keen to explore the cost borne by Will and Kate and how that compares elsewhere.  As you might expect the now fifth in line to sit on King Edward's Chair [2] was delivered in a somewhat luxurious private ward in St Mary's Hospital in London.  Will and Kate took the 'deluxe room package' (the Lindo Wing), of course.

Royal baby ke ching

But even this extremely lavish arrangement ($8,900) is cheaper than the average price of a normal delivery in the US ($10,800).  

Maternity hospitals

W&D is not sure if the additional cost in the US is a function of the average weight of the babies born there.  But, good grief, the US cost is over twice that of Australia, where the arrangements are pretty good.    

Greens' fave UBI experiment dropped

Readers will recall that evolutionary throwback and chief of the Greens, Richard Di Natale said some 3 weeks back (4th April) that the Greens, if in government, would introduce a Universal Basic Income policy.

The Green UBI Plan is that all Australians, regardless of income or work situation, would receive an amount equal to 50% of the minimum wage.  Whilst Di Natale was being ridiculed universally, the publicity-shy Waleed Ali, a television personality, supported the idea, "It's being trialled in Finland.  A place that's known to be universally awesome," he said.  (Did he mean "universally known to be awesome"?).

Err, well, not awesome enough to continue the trial.  

On ANZAC Eve (doubtless a date being considered by the Peoples' Socialist Workers Republic of Victoria for a public holiday) the government of Finland, one of the Nordic Petrie Dishes, decided to abandon its experiment with a Universal Basic Incomes trial for 2,000 folk.  The UBI was about A$900 per month. 

One less exemplar for the Greens.  And does Mr Ali still universally think that Finland is universally awesome?

Amazing maths test

W&D has always been fascinated with maths-based puzzles.  And was so impressed with a maths test he came across that accurately predicts your best ever movie, that he decided to share it with Readers.

Readers: Do not cheat.  Do your own maths.  Then compare the results on the list of movies at the bottom.

W&D was amazed at how scary true and accurate this test is:

1. Pick a number from 1-9.

2. Multiply that number by 3.

3. Add 3.

4. Multiply by 3 again.

5. Your total will be a two digit number. Add the first and second digits together to find your favourite movie (of all time) in the list of 17 movies below:

Movie List:

  1. Gone With the Wind
  2. E.T.
  3. Blazing Saddles
  4. Star Wars
  5. Forrest Gump
  6. The Good, the Bad, and the Ugly
  7. Jaws
  8. Grease
  9. The Bill Shorten Resignation Speech
  10. Casablanca
  11. Jurassic Park
  12. Shrek
  13. Pirates of the Caribbean
  14. Titanic
  15. Raiders of the Lost Ark
  16. Home Alone
  17. Mrs. Doubtfire

Now, isn't that something?

Taxing times

Readers would be interested to know who does the heavy lifting of paying income tax.

Top 10 tax

Planet Canberra realises families can be more than four

W&D has done his bit to fulfill former Treasurer Costello's fertility cry, to have at least three children.  W&D has five.  And so he could never understand the reason for the government limit of just four members in a Self Managed Superannuation Fund.

Well, it seems that someone in Ms Kelly O'Dwyer's department (she is Financial Services Minister) has realised that families can have more than four members.  And so the number of members a SMSF can have is going to be increased to six.

If Readers' SMSF have a corporate trustee, this will be straightforward.  But if it has individual trustees, Readers will have to wait for a change to state law.  The reason is that a SMSF is a trust.  And trust law is governed by the states.  The states, uniformly, have a limit of four trustees of a trust.  


Deepak, W&D's Uber driver, was talking about...

... New Zealand, and its central bank.  "I thought New Zealanders were polite people.  Even their crickets don't sledge opponents.  But I read somewhere that the head of its central bank said some rude things about Australian banks.  Anjali cannot believe this is possible.  She asked me to ask you what's going on."

"Well," responded W&D calmly, "indeed the Kiwis are, by and large, courteous.  And we are, in many ways, linked at the hip to New Zealand.  Consider there would be no ANZAC or ANZAC Day without them.  And that there was a time when the colony, as it was then, might have become a state of Australia."

"In fact," W&D went on, warming to the subject, "Amazingly, New Zealand is mentioned in Australia's Constitution as one of the colonies that can join the Federation whenever it chooses [3].  But the new Governor of the NZ Reserve Bank, a Mr Adrian Orr, has said a few things about Australia that he might have left unsaid."

"Wow," exclaimed Deepak.  "I guess he got stuck into the Australian banks."

"Indeed he did", responded W&D.  "And they deserve a lot of flak.  But he should be careful of hubris.  In a stunning "it can't happen here" moment last weekend, Mr Orr sledged banking culture in Australia and talked about how superior things are in New Zealand."

"What's wrong with that," said Deepak, rushing to the defence of Kiwis." 

W&D was quick to retort: "What is wrong is that New Zealand banking is, in essence, a branch of Australia's.  Australia's big 4 banks hold about 90% of the deposits in the New Zealand banking system.  Banking culture gone wrong is a virus.  And Mr Orr's comments about a possible inquiry into New Zealand's banks was extraordinary: "Why search for a problem yet to be identified?  I don't see any lack of confidence in banks in New Zealand." "

"That's a bit rude and arrogant," responded Deepak.  "He doesn't sound like a nice man." 

"A fatal conclusion," W&D muttered as he got out of Deepak's car. "He probably is a very nice man.  But if a problem arises in the New Zealand banking system, he's going to have lots of egg on his face. He should have kept his thoughts to himself."

"Oh, I have that problem, too," wailed Deepak, "I foolishly told Anjali that the new dress I bought for her looked 'a bit tight.'  Since then it's been a lean week, if you follow me."

"As it should be", concluded W&D as he strode off.  "Deepak, you have to do more than provide the morning cuppa tea.  It's a 24/7 job.  Always tell Anjali that she looks beautiful."  

And, to soothe your troubled mind...  


Last words...

"Well, Mr McMaster, does it not then follow that the document itself is misleading or deceptive?" 

-   Kenneth Hayne, Commission of the Banking Royal Commission, asking Terry McMaster, CEO of Dover Financial Services about his company's 'client protection policy'.

McMaster soon collapsed, and was taken away in an ambulance.  Next time it might be a 'divi van' [4].  His company has been investigated by ASIC for some time now...

ASIC dope

First Samuel client events calendar




2018 Events  


Eat Street - food & wine fest - Invitations sent



NGV Winter Masterpieces Exhibition

Masterworks from Moma (New York)



Forum - guest speaker TBA


Some lightly salted absurdities from all over...

At the extreme left-hand end of the Bell Curve

A police officer in Thunder Bay, Ontario, stopped a pickup truck on Tuesday afternoon after noticing the licence plates were allegedly not authorized for that vehicle.

Upon approaching the driver, the officer noticed the suspicious seating arrangement — the driver was sitting in a fold-up picnic chair placed in front of the steering wheel.

Plus: broken windshield blocking the driver’s view; a defective door handle that effectively trapped the driver inside the truck; no seatbelts; driving while suspended, and operating a vehicle on a highway with no insurance.


Guess what happened next

A woman grabbed Jerome Robinson's 5-year-old son on Monday while he was walking him to Treadwell Elementary School in Memphis, Tennessee.  She asked him, '"Are you safe? This is not your father, come on and go with me. Jesus has a better place for you." 

What happened next?

a.  Robinson thought she was right, and gave his son to her;

b.  Robinson picked up his son and ran;

c.  Robinson undertook a citizen's arrest; or

d.  Robinson punched her in the nose.    

Close.  But no cigar.  d. is correct.  The woman fled with a very flat and bloody nose.  But made the mistake of later reporting to the local police that her nose had been broken by a nasty man.  Which saved the police looking for her.  She was arrested and charged with aggravated attempted kidnapping.


As they say, "she was known to police".     

It's a bad-hair day when... 

Kiana Wallace, 24, from Ohio, in the cells under suspicion of drug use, thought she would pass the urine-drug test if she borrowed someone's urine. 

But the sample she submitted also tested positive for drugs.


18 months in the slammer.

Have a Wry & Dry weekend. 


[1]  'California Dreaming' - by the Mamas and Papas, released in 1965. This song propelled the group to be part of the 'California Myth/ Sound', commenced by the Beach Boys. 

[2]  The Coronation Chair, known historically as St Edward's Chair or King Edward's Chair, is an ancient wooden chair on which British monarchs sit when they are invested with regalia and crowned at their coronations. It was commissioned in 1296 by King Edward I to contain the coronation stone of Scotland – known as the Stone of Destiny – which had been captured from the Scots who kept it at Scone Abbey. The chair was named after Edward the Confessor.  Twenty-six monarchs have been crowned whilst seated on the Chair.

[3]  " "The States" shall mean such of the colonies of New South Wales, New Zealand, Queensland, .. and such colonies or territories as may be admitted into or established by the Commonwealth as States; and each of such parts of the Commonwealth shall be called "a State". "

 - Section 6, Preamble to the Australian Constitution. 

New Zealand sent representatives to the first and second constitutional conventions in the early 1890s, but declined to proceed.  New Zealand can still join the Commonwealth of Australia without the consent of the six Australian states. 

[4]  Past attendees of bay 13 in the outer at the MCG will well remember the crowd cry of "You're going home in the back of a divi van" as another drunk spectator was taken away.  A divi-van is a 'marked police van used by Victoria Police, usually a converted commercial vehicle with a reinforced enclosed rear cargo area for holding and transporting offenders to a police station'.