In late 2011, Stewart Partners provided expert opinion on ABC’s 7.30 program regarding hybrid securities. The story detailed the Australian Securities & Investment Commission’s (ASIC) approach to warn investors about the risks associated with hybrid securities.
A large number of Australian companies (including Woolworths, ANZ & Origin Energy) have issued hybrid securities to small investors, many of whom are focused solely on the promised income yield and not on any of the underlying risks, particularly the risk of losing their capital.
Below is a link to the segment that aired on 7.30 featuring the Chairman of Stewart Partners, Nigel Stewart.
In fact, in July 2010, we wrote an article explaining why we do not recommend our clients include hybrid securities in their cash and fixed interest portfolios:
It was this article and other conversations we have had with ASIC that led them to refer the ABC to us for their story.
This matter is a good example of the proactive approach we take to reviewing and evaluating investment opportunities available to our clients and advising them accordingly – long before regulatory bodies such as ASIC begin to take an interest on behalf of investors.