With today's announcement we have seen a sharp drop in Challenger. Some have asked why? This is all tied together with the previous Labor governments reform on financial services and advisors. Advisors are being told how they can generate their income. Going from commission structures to fee for service. With the current government reversing the reforms to a now sudden re-reversal we have also seen the deeming rules for Challengers annuities put to the chop. What does this mean ? It means that the Challenger annuity is now assessable or forms part of the means tests. It has basically taken away a major purpose for the product to be advised or sold. I am not sure what this will mean moving for Challengers bottom line or if the rules will be changed yet again. One thing is for sure, with the now obvious governmental and regulatory risk hanging over financial services companies it will make some think twice before investing. Challenger could fall into the too hard basket for some.
As usual do your your own research and this is in my opinion and is general in nature.
CGF Price at posting:
$6.35 Sentiment: Hold Disclosure: Held
