Hugh recently chatted to Matt Johnson of The New Daily to talk about Westpac’s decision to scrap its first-half dividend payment.

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Centaur Financial Services director Hugh Robertson told The New Daily Westpac’s announcement signalled the “chickens had come home to roost” for self-funded retirees without diversified portfolios.

“Retirees were [tolerating] the volatility of these unsustainable payouts on the basis they were getting such a good yield, when they should have been pursuing a yield and capital approach,” Mr Robertson said.

“It’s really one of the canary in the coal mines when you say a retiree needs more of a structure to generate income so they can better control their outcomes and be less exposed to risks from announcements like Westpac’s.”

And it could get even worse for retirees.

For while house prices have largely held up during the recession, Commonwealth Bank CEO Matt Comyn last week suggested that falls of up to 12 per cent were still a “reasonable assumption”.

This would negatively affect retiree incomes, Mr Robertson said, as the financial performance of the banks is closely tied to the housing market.

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