Hello and welcome to The Australian's Money Puzzle podcast. I'm James Kirkby, the Wealth editor at The Australian. Welcome aboard everybody, Well, how is your financial year going? We are moving towards the end of January. You've had a few weeks now. Have you enacted those plans formulating in your mind all through the holidays about what you were going to do? Have you got on top of those posts you had
about maximizing your situation as an investor? Have you sold those stocks that you know are no good and you won't let go? And most importantly, have you got a plan?
Have you got a plan for this year? And my guest today is what I would think of as a classic financial planner and keeps his eyes firmly fixed on the issues that matter most two investors, and that often comes down to actual detail or the nitty grit if you like, of managing money as much as it does what we all have to talk about, which is markets and global forces and geopolitics which drive markets seem short of the Sonas Group, He's volunteer to answer the first
batch of questions from investors for the year. How are you Liam.
I'm very good. James has a lovely breakover Christmas in New Year, so ready to go for twenty twenty five.
I like the sound of that. I like the sound of the refreshed guest. Very good, very good. All right now we still are just about and perhaps no more after this, but I think people do like to reset and get a sense of, you know, how is last
year of what's coming down the line. We've covered that in the show fairly well, and most people would have listened now to the summer series where we laid out what the expectations are and some guides if you like, for the year ahead in all acid classes, shares and property and everything else. Just from your point of view, Liam, in terms of every year, some planners will be so
sort of focused on a textbook approach. Would be like that they refuse to think that there's anything different one year after another, that the basic stay the same, but there's always new things. And just give us, if you would, your estimation of what the risks and opportunities are specifically this year. What about the risks, because I know there is there's certainly some points you want to make.
Now we've had a couple of good years for people to invest in cash and fixed interest term of positive rates have been above five percent, and they did really well, and they've got accustomed to it. And now what we're seeing is as those rates start to drop and people understand that they're probably going to drop a fair bit in this year, probably about over zero point eight percent by the end of the year, but it's still a
drop below that five percent. Key what I'm afraid of is that people are now going to be poached or attracted to new investments that are still offering more than five percent and in some case is double that by making it sound like they're safe investments. That The one
I'm worried about is private credit and private equity. Often these are badged up as wholesale investments sold to wholesale investors, which means it just means somebody with assets over two and a half million or an income over two hundred and fifty zer now in one of the capital cities that a person's house may qualify them for that. So what concern is these investments are being targeted at people because their wholesale investor status, they don't have to give
as much information. There's no protection in the background if it goes wrong, because they're not retail funds. So all I'm saying to people is, instead of trying to chase returns, understand that the cash raid is going to drop a little bit and your term deposits will drop a bit. Maybe look to do a two or three year term to posit that your four point seven or four point eight percent rather than worrying about, you know, sort of trying to get more than five percent in a different investment.
That's thing you know, people have we you know this can't this this broadcam census and team that rates cycle the top, then that rates will fall in the year ahead. I've not actually come I'm not entirely convincedly in myself that they will, but they may, and the US certainly, I'm particularly not convinced that they might fall anymore.
There.
But having said that, that doesn't matter, because the banks will upset their rates anyway, won't they. They'll do what they like regardless of official rates to some degree. So you're altually coming upon this when you talk about this whole rush to private credit and unlisted opportunities, but mostly what they call private credit. Private and let's distinguish that
from private equity or whatever. This is private credit where people are it's put in front of investors that they can get in on this sort of line of business that was always there, and for some reason we are led to believe that all of a sudden it suits everyone. And why hadn't everyone been in it all the time? Tell me, if you would, how that comes across and how how are people like our listeners encountering this. Is it in the way of a listed option, a listed
investment on the market. Is it a private fund? How how does this stuff get offered? Is it just ads basically in newspapers and on websites.
Yeah. Look, often it's being prompted by you know, promotion to accountants or to probably trusted advisors, and they're you know, they're being sold. But it's usually unlisted and you're talking
a managed funder unit trust. The key factors that we've seen it is because it's private credit, it's loans to companies, and a lot of this has come from the fact that in construction of property development at the moment, they're finding it hard to raise money from the normal lenders, the banks and other providers, so they're looking for an alternative source of financing, and that's where these private credit
funds are built up. So they're packaging up these It might be you know a number of different developments around the country and you're funding that the developer. But it doesn't really sound like that in the perspectives. It's just and it is a very short perspectives because it's for wholesale.
It's basically been sold as you know sort of, it's you lending to private companies, you know, and it's pretty secured secured over investments, and you know, but you know, you start looking at things like it may be locked in for three to four years, so there's no liquidity, there's no guarantee on the return on the investments, even though there's assets backing it. Well. You know, for example, if there's a development that falls apart and doesn't go ahead,
most of the money could be lost on that. It just depends on what they recover selling the land that's there. So I just warned people to to think twice, get an independent view of something like that, and really ask themselves, am I a wholesaler sophisticated investor do it have I really got the knowledge to manage something like this and to be involved in something like this, and there is the person who's selling it to be are they connected to it in any way integrated?
I must ask you two things. One is, this isn't all private, right? There is listed versions of this, isn't there?
Yes?
So that means you don't have to be a sophisticated investor, right. So if it's on the share market, you can buy five hundred buxworth. So but as you say, the sort of target audience is so cold sophisticated investor audience, which is something of a misleading term these days if it was ever or anything else, but certainly misleading these days because it allows the seller of the product to not take half as many as they don't have half as
much responsibility to you because you're classified as sophisticated. You're classified sophisticated. Nothing to do with your sophistication, just a matter of your bank accounts and how much you have. And they haven't indexter changed that threshold. Consequently, the number of people who qualify has become enormous, really, and they are reviewing that, but for the moment everyone's taking advantage
of it. I went to a presentation with the top really the top and I'm not want to pin someone here, but I went to the presentation from the leading private credit group probably in Australia and one of the originals. And of course people would have made money out of this fund and funds from this house in the early days, and now of course they see now they just know, you know, this is what we're going to go for
the middle Australia. We can get the average investor. And the same group has gone very big and they've moved from their little suburban office block up in the suburbs into the middle of town. I'm sure you have an idea who I'm talking about. Anyway, it was such a good presentation. It was so convincing, and it was about how the banks were pulling back and the banks weren't really lending anymore, and this was the opportunity for lifetime and you know, don't miss this, You're going to If
you miss this, you're going to regret it. Blah blah blah, And it was quite convincing. What's the flow in their presentation? Do you think.
It's the nature of the assets that are backing these funds has changed dramatically since COVID. The financing is tougher materials have gone up to cost the trades to complete these developments, and council requirements to complete these developments. Is it all?
It's propertly Liam, is it?
I mean?
Is there nothing else to these guys are doing?
There is some yeah, you know, we talked to private equity separate, but there's also you know, financing for companies that want to do some growth and things like that. The ones I'm worried about are the ones that are backing construction. I know that we have to build in this country, and I know that's required, but I don't think that should be done on the back of people that don't understand what they're getting into. If I was doing funding a private developer, I would be wanting eighteen
to twenty five percent return. So when somebody sees something that says ten to twelve percent and it's a great opportunity, I don't think that's a great opportunity because you're taking a lot of risk that the development can go wrong, and we you know, I think there's over seven hundred construction companies went bust in Victoria last year, and I'm not sure the number of New South Wales and the other States. But that should tell you alone. And the
thing you mentioned the banks are pulling back from this area. Yeah, the banks have assessed the risk and decided.
It's too book. That's right. It was good, it was good business. You'd imagine they'd be in there. I want to simplify it, but there is that line of thinking, okay, very good. So it's interesting that to do this with you, just to sort of narrow down and say, Okay, there standing risk and what about the harder question imagined for someone like you to answer, what about the outstanding opportunities This year?
It can be really volative, continued volatile year. There's a bit of euphoria today that Gazza seems to be you on its first step, but that that could fall apart very quickly, and if it does, then may be a shock to the market. So this is a year to keep some money in cash. Trump is coming in. If he suddenly announces tariffs or threadns tariffs, the markets may drop. That's always his first gamble gambit, so he often pulls back from that. So when he does threaten them, the
markets may fall. That maybe your time to buy into a nicely diversified ETF and just get yourself a little bit of extra exposure and just ride that wave of recovery once he calms down and says, okay, instead of a twenty five percent taro, if I'm going to do a five percent taro for you know, I'm not going to attack Canada and Mexico because they are good.
Neighbors in itself. By the dips. Is this fairly bullish view, isn't it?
Well? If if you're buying into a solid blue chap etf well diversified for the long term, it's nice to get in at five or ten percent below where it's currently trading. Yeah. And I'm a long term investor, James, So I'm not trying to trade the market. I'm just looking for opportunities for at the moment, I'm looking at it and going, oh, I really don't want to put
more into the market at the moment. But if I've got an opportunity to get in at five or ten percent less, yeah, So for the long term, I'd like to just move a little bit of money from cash and fixed interest where we've done really well, just to take a little bit of an extra risk going forward. But also I'm taking some money out of things like CommonWell Bank and things that just can't back their valuations.
And I'm just saying a lot of my clients are in pension phase, so there's no CGT, so I'm able to take some money out of there, and just I'm looking for opportunities of where to place that.
Okay, that's right, Okay, very interesting two issues there. One is obviously that idea that the fixed interest has the cycle has topped, as you say, and you said at the start, perhaps if you still want that, perhaps you fix at the inn and around these levels, knowing that you know, there's very few times in history really where you get where your cash rad is above this to say, four to six percent. That's a sort of standard range, isn't it.
And I was just getting some quotes this morning, James. So you can get a four year annuity for four point nine percent, or a five year one at four point nine to five. So that's locking in four point nine five percent paid each year for the next five years. You know, if you're somebody in pension phase that needs to fund your your pensions, that's a lovely guarantee for the next time.
That's you said, a newity. That's not a fix. That's not that cash deposit.
Yeah, the term deposits. For the same time, you're looking at four point five to four point seven, So you can get that a little bit extra by going through an annuity provided and there's challenger and resolution life and comeback. So just shop around and just have a look.
You're putting cash with the annuity provider, is.
It, yes, into a fixed term annuity?
Yes, I see a right, okay, and they tend to pay a little more, do they.
Yeah, well, at the moment they do. Okay, you can still get The trick is you can open an incentive save over with one of the banks, or you know, a high interest savings acount and still get over five. But we know at some stage during the year that's going to drop. Even if interest rates don't drop, the banks will start dropping them themselves. You had three months ago the term deposit rates dropped the four point seventy five because the thought rates would really start dropping from February.
Now we're back up to where we can get five percent for term deposits at the moment for one year, four point nine for two years, and then it starts dropping off. But when I was so I was looking for alternatives. And I looked at some the nudities over the last few days and I can get four point seven to four point nine to five from two year to five years. So you talk about laddering to make sure that you're covering your future capital needs to pay
pensions or to pay your living expenses. And by using those term the puzzles and the nudies over twelve twenty four, yeah, three years, four years, and five years, they can lock in and be sure that then with the rest of their money, they don't have to react to market changes. They can invest longer term knowing that they've covered their.
Cost, they've got this core and they know they're going to get for it over a period of time. Very yeah, very interesting. Okay, all right, And just on the other issue, just before we go to the break, taking some off the table. Obviously, after a very good year on equity markets, there are certainly a very good year when we look at it, it was only it was a goodish year for equity markets, but it was a spectacularly year for
bank stocks. So you're talking about taking a little bit off the top of the bank stocks.
Yeah, and look last year I was winging that back in nab and an Ain said, we're so far behind and they just had they had a great year and they've pulled up. I don't understand Commonell Bank at the moment why it's up where it is. So I am taking profits on that, but you know, I'm not coming out of them. I'm just saying, you know, let's just take a bit of a risk off the table. It's been a good run and you know, you know, in a lot of cases now I need to prepare for
future pension payments and things like that. So I am just building up that cash with the idea that if the market does take a big drop, I have the option to go in and get in a little low price if I need to.
Right, Okay, very good, Very good. All right, we'll take short break, Folks'll be back in a minute. Hello, Welcome back to the Australians and Honey Puzzle podcast. I'm James Kirby, was editor at The Australian, talking to financial advisor Liam Short of the Sonas Group, who's often on the show. Always a popular guest. I'm one of my first guests of the year for the Money Puzzle. Okay, Liam, I've
collected quite a few questions for you. We may not get through them all, and keep the questions coming everybody. They're really good, and I've noticed that they're getting more and more diverse in nature, which is great actually, and all sorts of Sometimes people literally just make a comment or an observation. That's all welcome. Okay, Catherine says, I love the podcast. I'm so glad. I wish I'd come across this sort of information years ago. Thank you, Catherine.
The hard part for me was understanding and making the first investment, taking that initial plunge, then coping with everything else. I guess I learned by doing, But in hindsight I really had issues finding good, clean information and independent advice. I do not really think it is possible to make good decisions without having basic knowledge, given the number of bad operators out there. Okay, Catherine, now can you please talk about it realistic long term journey to financial literacy
and security. Please and recommend basic courses on finance because I have found there is a lot of bad advice out there. Okay. It's a great question, you know, with something we should cover more often. Someone who's starting or is somewhere near the start of an investment journey. And I wish I do wish I could tell you there's a course that you can sign up for. I really do. I don't know it, and I hate to tell you that a lot of the private courses are deeply skeptical
about courses offered by anyone selling anything. What do you think, Liam, Yeah.
Well look for me. There's two things you need to start with. One, understand your cash flow. So just go to moneysmart dot co the you and look for the budget planner.
It's good, Yeah, to download that.
Budget planner spreadsheet and get out six months of credit card and debit card and expenses and put it into there. Have a glass of wine, just take your time doing it. But the value of understanding whether or not you've got spare money to save or whether you've got commitments that mean you can't take a risk, that's the first a deal goal. And then go back to that money Smart website and start reading some of the articles on different things in there.
Okay, I mean we should tell listeners that the particular attraction of the money Smart website is said, it's from the government, it's from ask and it's something that Acik has done and stuck with and it's evolved and it
is damn good. So money Smart, which is money smart dot gov dot au, the ACIIC website where whatever else is going on at that website and whatever is the nature or the articulation of ideas And initially, if you like basic elementary investment ideas and protections for you, it is from the government and they are not selling anything.
And then move on from there when you're ready to start learning about investing. Then if you want to know about shares and listed products, the ASEX have courses on shares, ETFs, bonds and they're all split down into nice little short modules of about ten to fifteen minutes each, really easy to understand. If you're interested in SMSF, the ATO have a set of about twenty six little two to three minute videos on every aspect of running an SMSF. And
they've also now just issued a course. The course, I'm afraid is not what I expected. It's they've designed it as the one to punish people who broke the rules and force.
Them to read it, so they spend all their time thinking of telling you what not to do.
Yeah, well, it's just it's very boring. It's all written, whereas those videos were excellent. So I would start with the videos and then move to the thing, and then just start going. If you're interested in something specific, go onto a forum maybe on Facebook or somewhere that's talking about those forget about what they're recommending on there. Listen look for what people say where they learned from. You know, they if they the course they did or a book
that they read. And that's why I go back to that money Smart. I know a lot of people love Scott Papes Pare for the Investor and things like that. I believe now he might be doing a lot of work with money Smart. So you're looking for your places where you're getting educational content and no one's trying to sell you anything. Like as a financial advisor, I'm not
licensed to sell property or to advise on property. But because I do SMSFS, I've got a whole section on my SMSF coach, So I have fifteen different articles on everything to do with property in an SMSF purely because if I have someone who comes to me and wants to know whether it's right for them, I want them to be educated about it and know the risks and know what they can do before they commit to doing something like that.
Terrific Okay, yeah, yeah, Catherine, keep that in mind and everyone keep that in mind. So I did like the ideas they're the money Smart okay, which is on by ASIC, which is own by the government, as the sort of elementary protect yourself because you've got to protect first for do anything. I think that's a very well good way.
In Liam, the ATO, the Australian Tax Office on this is on super and on SMS in particular, as Liam says that I imagine the weakness of the ATO delivery of information is that they're so concentrated on what you're not allowed to do they might forget to tell you what you can do. That's because they are the regulator as well. But anyway, it is the government rather than someone's selling something.
You mentioned the AX, which is a course a listed company, but nonetheless, traditionally it was very strong on education, used to be very good. I went through a patch where they were where they weren't very good, and I think they definitely have revived considerably the AX. And it's interesting to hear that they have those short videos, courses and modules. So that's another place you could look, and I would trust them on that issue of education and education alone
very good. So hopefully that's a start, Catherine. I mean, yes, there's books, Yes, there are courses, extreame. I think the talking off the cuff here. Scariest thing I see in terms of people getting to know investing is people who don't know anything starting into something ridiculously elaborate, like trading CFOs or warrants or options. As if you could walk off the street and do that. I mean, I'm doing this for thirty thirty years, and I would be very
and I'm qualified as a security advisor. I still wouldn't do it that way. So so let me just put that on the table or yes, thank you Catherine. Okay, a question from Brett there.
Liam, Yeah, I'll read this one. Ut I have an internal debate on continuing my financial advisor, who currently manages my portfolio of three hundred and ninety thousand. I've worked out I can do it myself using index funds and morning Star services for tracking in re search, saving one point zero five in fees. My main concern is my own time. I work more than fifty hours a week in my current job, and with kids, I'm not sure I can devote enough time to manage the portfolio successfully.
How much time should I expect to set aside each week to manage this myself. That goes back to what he mentioned about moving to index funds and using some morning start to manage is your portfolio or the research on it. It's whether he is he going to start trading, which you've just mentioned is a really hard thing to do.
How active is he or is he going.
To choose some decent diversified index funds and maybe some satellite funds and some individual stocks and just you know, keep an eye on them, but not be looking to flip them every time, you know, the market moves, so you know, if he sets it up properly, be aware that I would not do this with just individual shares themselves.
I would be using index funds or managed funds. You could set them up and the most you would have to do is want to two hours a week, and most of that would be reading about what's happening in the world and understanding what's happened in the world, Even something as simple as watching Alan Coler on the seven o'clock news to understand what's going on and the effect on your portfolio. So and it may be something that he does as a bit of downtime for himself from
the from working the kids. But really it comes back to that, why are you doing it if you think you can trade and beat the market? I'd say, because you're busy gonna It's gonna end up being one of those things that falls in the background. You'll have gone into some stupid stock that you had great somebody said as a great outlook, and then you go back and look at it two months later and you've lost sixty percent of your mind.
Sir, you didn't look at it for a month and you said, what on earth, Oh, what's going on? Fifty percent? Yes, okay, Brett. So I hope you hear that. I would just add one thing about morning Star, and I like morning Star and I have a lot of respect from morning Star. However, I would tell you that, you know, no researcher is perfect, and their analysis is, in my experience, it's a heavily
it's heavily quant it's heavily numbers based. And often I see sometimes this stuff makes perfect sense, and sometimes I see they have a stock recommended and I say, oh God, how could you recommend that, but they're working entirely on the numbers, and the numbers might well be very interesting, but I might be familiar with the company and the people and the history of that particular company, and it will completely change my view. So just keep that in
mind about that sort of thing. Research. It's a straight quand research.
Yeah. One thing to mention there, James, is whichever broker or online trading platform you're using, normally they'll have a research and a news section for each stock, a lot of the better ones. They'll also have a consensus section, which shows you what all the brokers are thinking about it. They may not name the brokers, see that all look, seven brokers have it as a hold, two have it as a strong buy, and one has it as a
strong sell. That gives you an idea that, yes, it's probably not a bad one to get into, and then you could do a bit more research and try and find out why a few of them are recommending it. Really well. But if you suddenly find a morning starts recommending something and six other brokers are saying sell, that's fine. So that's your safety blanket to check, you know, is the thinking that of the research house I'm using, is it way out of whack with what the market thinks.
And to be fair, they are not brokers in the sense they're not they're raising money for anybody, so you don't have any of those complications with morning Star. Wars is a very good thing. They're doing some very good work. I will put that down. But I personally have an observation that sometimes there's almost a certain myopic aspect to the work which is so heavily based on numbers and
not what's going on around that particular stock. That's just something you see sometimes with all sorts of people, including some fund managers to who are again good, but have that issue that completely believe the numbers and the other thing is that the numbers are not true. I give the companies bullsheitting on the numbers. Well you know, I'm sorry, but the whole estimation goes out the window. Okay, we'll take short break back in a moment. Hello and welcome
back to The Australian's Money Puzzle podcast. James Kirby talking to Liam Short of the Sonas Group. Sonas Group. He's a financial advisor regular on the show. So I'll just start with the one from Ranjeev, who says I would appreciate it if you could send me the list of top financial advisors published by the Australian. Yes, well, now, Rangjiev, I can't do that, but I can only point you
to to how that comes out. So that's the Baron's list of the top one hundred and fifty advisor which is put together by the Australian in conjunction with Barons of New York every year. If you're really quick and clever, I would say to any listener, it's a great list worth getting, and you could just buy the magazine on the day, which is in September every year it comes out.
But if you miss the magazine in paper, then the only way to see that list in its entirety one hundred and fifty advisors is to go onto the Australian and to subscribe. Nothing is free. I'm afraid someone has to pay somewhere for all this. So that's how it goes, all right for tax, Randjiev, And hopefully that would be useful to you when you do that, all right? Question from Bruce Liam.
Yeah, so, Bruce asks, I always enjoy your too weekly podcast, but something that stirs me up every time that I hear you say it is that a person can only have a maximum of one point nine million in their superannuation tax free pension phase account. That is not true. So that's what he's saying, And what is true is that you can only start a pension with one point nine and they can, which you know it's correct on
that point. It's called a transfer balance cap, and that's the maximum amount that you can move from accumulation to pension phase to start a pension. And at the moment that's one point nine million, probably going to go up to two million on the first of July. But yes, if it grows and let's say you earn seven percent and you're only taking four percent pension, yes your balance can go up. So that's not an issue. One of the catches that he probably you've probably been talking about
is there's also called a total superbalance. Once your balance and super hits one point nine million, you can no longer put any more non concessional amounts into your super. You can only do the thirty thousand concessional each year. So there are two different limits, but unfortunes are set at the same amounts and they cause a lot of confusion.
But you can only put a maximum of one point nine in before you're stopped pulling any voluntary contributions, and you can only start a pension with a maximum of one point nine million at the moment. So that answers the first part of his question.
Yeah, so you can read the second part in the moment. I might just add it for Bruce and everyone else on this one. The Super arrangements, as I so often mentioned, are ridiculously absurdly complex, often contradictory, and it's just a patchwork quid that's been designed over the year, over the years, and people keep getting ideas to add and subtract to it, and it's just ridiculous. It's like learning another language. I have learned the language as many people have need to,
but I can't explain the whole thing every time. That's the problem, Bruce. I mean, if I's been asked, if I give the proper answer, the full comprehensive answer to every question on Super, honestly, everyone would just fall asleep, they'd walk away, and no one would listen to the show. So we use this sort of shorthand, like one point nine is the most you can have in super before
you start paying tax. One point we should say one point nine is the most you can have and your transfer balance when you speak, when you move from miccuing relation to the pension, as Liam just said, and then from then on it actually can get bigger. So yes, you can have, over the fullness of time more than one point nine as it grows. Yes you can, but.
We just can't.
It's just it's impractical for commentators like myself to spell that out each time. So so that's the explanation. I hope it's good enough for you, all right. The rest of that question from Bruce Liam, if you would.
Yes, he says, also, yes, perhaps AUSSI shares might have had less favorable in these recent years compared with US shares, but I also recall how around year two thousand, US shares were not doing as well as Aussie shares, and I reasoned at the time that Ozzie shares would always do okay because all the money that lands on our superannuation fund managers desks every day and which they need to do something with like buying Aussie shares. Anyway, so may I suggest that you add some nuance when you
tell listeners about this so again he's right. Two thousand was a very volatile time for US stocks, but that's because there was opportunities in the tech stocks at those times it was the tech bubble. There was no access in Australia to any of those opportunities. So in the run up to it, international shares were doing brilliantly because they were invested in these shares, But there was a risk, And that's why you've always got to look at the
risk of what you're getting yourself into. At the moment, you'd be really worried about getting into AI is such a good run, you'd be worried about you'd be worried about putting more money into international tech stocks. But for people who understand that area, have done their research, they may be comfortable to do so.
Can I just do you think there's any merit in Bluth's line of thinking that there's so much money in the superinnuation funds that Australian shares will be okay because they need to do something with it. Is there is that a reliable way of not anymore?
Because you look at Australian Super it's got its own office in New York and London. Now same with a lot of the other companies. Probably sixty to seventy five percent of every dollar that comes in in super now is going overseas in either international bonds, international government bonds, international shares, infrastructure. Look at the amount of you know, international investments and that all of these super funds are
involved in nowadays. So the problem in Australia, I feel is yes it everyone feels it's fairly secure because you know, you've got thirty two percent in banks and insurances in our index, you've got our long term big resource stock companies. But that's probably our biggest risk is that we're such a focused, small in a small, fun country that if one or two sectors take a hit, it can really put Australia shares on in the bad books.
Half half the market it is two sectors, and half the market is four banks and three miners. Really yeah, and banks and miners are forty five percent or.
So of the market cap. And one of the things I'm really talking to my clients about is talk to your children and understand the next generation and their loyalty to the banks. Okay, they have not grown up with A and Z and CBA and all of those being in their ear they will move for a five dollars voucher or something exciting that's offered free as part of an app to a company. When they're going for a mortgage, they're going to a mortgage broker. I think seventy two
percent of loans now are done to mortgage brokers. So they're not having contact, well, they can't even have contact with their bank manager because there is no bank manager in the local branch anymore and they've got no authority. So you know, all big four banks at the moment, I really worry about who is going to be our big four banks in ten years time, because it's who
has your data? Is the one that's going to be selling to you and the one that you're going to be because they'll be sending messages to you and texts and emails and you know, three your searches, they will be targeting you. And this is the Amazon banks and the Apple banks and the paypals, and they have so much information. And look, I know our own banks have that information from the FBOs machines and things like that.
And I've seen CommonWell Banks computer studio where they can see when people are spending in different suburbs at different times. But it's once you step up to the information that Apple has from people's Apple Pay and iPhones and their searches. You know, I know in the US at the moment, Apple have their savings account that they've opened up and are letting people invest. It's paying about one to one point five percent above the normal big bank right, So then you.
Just wouldn't you just eat that up if you could have that. I mean, I'm on the phone all day, I use it for all my payments basically, and if I was getting one and a half percent above above the official rate.
They're targeting the people they want as customers because they've seen it their spend history, and so I do worry about who's going to be the big banks in ten years time.
M M okay, interesting and that and that in some way makes you feel more comfortable in taking some profit off your com bank shares that went up fifty percent last exactly, Okay, terrific. Hey, we might leave it at that, Liam for today. Thank you very much, Liam of Sona's Group.
No worries. Always enjoy James.
I always enjoy having you on, Liam, and thank you for listening. And remember We're wide open for some more very clever questions, like the ones we had today the money puzzle at the Australian dot com dot au. Talk to you soon, h