Last week we met up with some new Listed Product Accreditation Course (LPAC) students. As with most discussions we have with advisers these days, the subject soon turned to the relatively high valuations in the Aussie market. It’s fair to say that there is a healthy scepticism amongst many advisers, having learned not to trust the hype of fund managers about stock picking processes. (That’s why most LPAC students take the course in the first place, no doubt).

In particular, a common question from the many advisers who implement direct equities through model equity portfolios is how to justify putting a client into the underlying shares which may have ri...