Self-funded retirees slam `policy on run’: [1]
Kelly, Joe
. John Stapleton, Weekend Australian [Canberra, A.C.T] 25 Oct 2008: 1.
Kelly, Joe. John Stapleton, Weekend Australian [Canberra, A.C.T] 25 Oct 2008: 1.
. John Stapleton, Weekend Australian [Canberra, A.C.T] 25 Oct 2008: 1.Abstract
“AXA‘s reaction may well be a knee-jerk response but it’s no more so than what the Government has done,” he said.
He was “reasonably confident” his $200,000 account with AXA, along with his other investments, could provide an income for him and his wife for the next 19 years — but he would never cut off his options. “Every investment we have has lost,” he said.
Association of Independent Retirees president Theresa Kot said: “It doesn’t take a retiree long to get on the panic pathway, or to feel hopeless. They thought it was their money and suddenly it’s frozen. There’s no one they can turn to.”
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SELF-FUNDED retirees Don and Gail Reid have watched their investments drop in value by one-third over the past few months.
With $150,000 invested in bank shares, the Reids could only watch helplessly as the stock market plunged day after day.
The latest blow came on Thursday when their fund manager AXA froze $200,000 of their money in an investment account, which Mr Reid believes is the fault of the Government’s decision to guarantee bank deposits.
“AXA‘s reaction may well be a knee-jerk response but it’s no more so than what the Government has done,” he said.
“It’s show-pony stuff. It’s policy on the run.”
Mr Reid said the rush to withdraw investments from fund managers such as AXA and Perpetual was extraordinary.
“It’s certainly exceptional and certainly something that hasn’t happened, to my mind, since the Great Depression,” he said.
With expectation mounting
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yesterday that the Government would be forced to resolve the problems facing investment fund managers, Mr Reid is still waiting for more decisive action.
Wayne Swan yesterday passed the problem of fund managers freezing deposits over to the Australian Securities and Investments Commission.
A former accountant from Buttaba, near Newcastle, NSW, Mr Reid, 68, took little consolation.
“The Government still doesn’t know where it’s going or has any solid plan of action to get through this,” he said.
“Just guaranteeing the deposits isn’t going to be the answer.”
Although Mr Reid was not rushing to close his AXA account, he was not informed of the decision to freeze the funds and said he “would have appreciated a letter”.
He was “reasonably confident” his $200,000 account with AXA, along with his other investments, could provide an income for him and his wife for the next 19 years — but he would never cut off his options. “Every investment we have has lost,” he said.
An AXA spokeswoman said that as a result of the government bank deposit guarantee, the fund manager had experienced a “20-fold increase in the average daily redemptions”.
Association of Independent Retirees president Theresa Kot said: “It doesn’t take a retiree long to get on the panic pathway, or to feel hopeless. They thought it was their money and suddenly it’s frozen. There’s no one they can turn to.”
Christopher Cole sold his New Zealand home last year and invested the entire $600,000 proceeds in failed mortgage fund MFS PIF atthe suggestion of a financial planner.
“I was going to buy a house with it but now I’m living in a caravan,” he said.
“It’s pretty devastating.”
Association of Independent Retirees West Australian director Ron Davenport said: “It’s all very well to tell people not to panic, but how do you stop them?”
Credit: Joe Kelly, John Stapleton, Additional reporting: Anthony Klan