Financial service providers have the option of investing in a minor's(as at the end of a financial year)legal name or requesting that an informal trustee account be set up. If a parent acts as trustee, so long as the income is for their benefit and they have access to any capital gains.....the ATO will assess that income in the hands of the child at their penal tax rates. This is the case, even if the investment started from a gift by a friend or relative.

Adult tax rates will be applied to any income received, if the minor shows they have been deriving income from more than 3 months full time employment during a financial year....as they will be deemed a prescribed person.

To compare the best investment option for a child's future use once they turn 18, I have looked at:

1. Insurance bond: Best when the parent is a high income earner....due to the availability of CGT discount and franking credits.
2. Unit trust: Best when child is working full time in order to channel income and capital gains under the $16000 tax free threshold. A low income earning parent or friend can also receive some of the income to split a large distribution tax effectively.

The crash of 2008 and what it means: the new paradigm for financial markets by George Soros 2009

This book is a great read to understand the connection between:

• Collaterlised debt obligations and credit default swaps
• The collapse or takeover of Bear Sterns, Lehman Brothers, AIG, Citigroup, Northern Rock, Barclay's,.
• Suspension of numerous investment funds that invested in 'junk' mortgage securities
• The distribution of unaffordable mortgages with honeymoon rates to american's who may not have been able to afford them.
• Surplus liquidity printed by the US federal reserve and its effect on the US exchange rate and Wall Street.
• The 'net interest free' loan window provided to financial institutions from the start of the crisis to today and how its being used.
• Global imbalance of US dollars being invested back into the USA.
• Mark to market accounting standards
• Short term compensation structures at many levels of financial services.

In a survey of numerous analyst's and financial professionals, the following list of journals were recognised with distinction:

1. Financial markets, institutions and instruments
2. Journal of accounting and economics
3. Financial analysts journal
4. Journal of finance and quantitative analysis
5. Journal of investment management
6. Review of financial studies
7. Journal of portfolio management
8. Journal of finance
9. Economica

There are a couple of providers that presented at the expo over the last weekend:

• Protrader: advice, buy/hold/sell recommendations, market scanning software, investor education, online market commentaries. Cost based on 1.5% p.a charged quarterly.
• EasyForex: Margin FX accounts, easy to use trading platform, 24/7 trading
• Bullion market: Seller and buyer of physical gold and silver bullion nuggets based on a mark up of 3-4%.
• GFT:Provider of Market Maker CFD's covering global equity, index and currency markets.
• Online traders group: Part of Kinetic securities that helps trade FX and index's via futures and OTC markets.
• Lincoln Stockdoctor: Standalone fundamental analysis software with scanner, account tracker and charting tool. Cost around $1895 per year.
• AxisODL: 3 trading platforms covering FX, commodities and indices on futures; options markets; STP CFD's on FX, indices, commodities and international shares; DMA CFD's on Aust shares. Quick conversion to home currency when position is closed out.
• www.FX360.com: Source of information for free trade set ups and in-depth analysis of the foreign currency market.
  
  

Barclays Global Investors has pioneered a long list of exchange traded products that are available on the ASX which allow cheap access to index based investments. The pricing of these securities is reflected in the basket of economies, sectors and stocks they target due to buyers, sellers and designated market makers.

Sweeping changes will allow the UCCC to cover the below events 1 November 2009.

• Lending for consumer purposes...inc' owner occupier homes
• Lending to purchase, renovate or improve residential property for investment purposes
• Lending for the purchase of land.

Further legislation changes will be made around  January 2011 where credit providers and intermediaries will need to assess the suitability of the credit to the consumer before entering the contract.

Suitability meaning the consumer is likely to be unable to comply with their financial obligations, except under substantial hardship or .....contract does not meet the consumer's requirements or objectives.

In light of the proposed UCCC changes , the contradiction is that these federal laws can be superseded by state based laws which can be watered down.

Below is list of brokers to choose from that cover the most traded markets around the world at a reasonable cost. Some providers like interactive brokers use their global scale to provide cheap brokerage but charge monthly inactive account fees and market data fees to use their platform.

The best local platform's that cover stocks, CFD's and futures were First Prudential and MF Global which both use WebIress and charge platform/market data fees.

Other options include the following:

• Thinkorswim: US$9.95p.t. US only. $0 account fees.
• Noble trading: US$20p.t. $25 per year inactive a/c fee. All markets.
• HSBC: $US30p.t. A/c fees apply. Min US $20k bal. $0 wire transfer fees within HSBC network. US & LSE only.
• TradeStation: US$9.99p.t. US$5000 min bal, $99.95 monthly platform fee. All markets.

There are 3 types of CFD's on offer:

1. Market Market CFD's
2. Direct Market Access CFD's
3. Exchange CFD's

Providers like CMC markets and GFT are market makers, whilst IG Markets, Marketech, City Index, First Prudential and MF Global offer DMA and exchange CFD's.

The main difference between market maker and DMA is the latter is placed on the market, which means it enters at market price; closes out at market price, and you can access the open and closing auctions on the ASX. The difference between DMA and Exchange CFD's is the latter have a cheaper open interest charge of 1.5% above the RBA cash rate as the provider does not have to take a direct position in the market for the client (DMA) or themselves (market maker). The average open interest charge premium for MM and DMA is around 2.5-3%. The other difference is that Exchange CFD's need to be closed out at the end of each trading day.

Apart from equities, CFD's can also cover FX, sectors and indices.

Nearly all providers will charge a platform fee and/or market data fees per month, but some will take on the cost for overseas markets (CMC markets) or provide delayed market data for free (IG Markets). These costs may be negated if the broker allows phone trades like FP markets and MF Global.

The variation margin that is incurred when a stock falls is broken into 2 parts:

1. Percentage based margin: percentage * price * no of cfd's
2. The loss margin: drop in price * no of cfd's

If you purchased $10000 worth of BHP @ 5% margin @ $30, than it drops by 5% to $28.50........your variation margin would be $500 - (5% * $28.50 * 333 CFD's) - ($1.5 * 333 CFD's) = $473.