Household Capital expands broker offering

Household Capital’s chief distribution officer, Paul Stratton, outlined that the broadening of the offering enables brokers to find more solutions to their clients in a one-stop-shop.

He flagged that the government’s HEAS provides a lower-cost option that’s available to both pensioners and self-funded retirees.

For example, clients requiring finance for modest needs (such as a small amount of extra income or a lump sum payment to cover minor expenses), the government's HEAS could be an appropriate low-cost option.

On the other hand, for those clients who require a higher level of income or capital for more substantial projects or expenses, a Household Loan could be a better choice, given the maximum loan amount was recently expanded to $2 million, he explained.

“Home equity, together with superannuation and the Age Pension, provides the full package for retirees and helps mitigate longevity risk; the fear of running out of money in retirement is very real for many retirees,” Mr Stratton said.

“The acquisition of Pension Boost means we can offer advisers’ clients even more flexibility and choice,” Mr Stratton said.

As well as expanding its offering through the Pension Boost acquisition, Household Capital has also recently welcomed several new hires.

Anthony Nolan has joined as head of credit, after 27 years in senior credit positions at the National Australia Bank.

In addition, John Ardiles has taken the role of a senior credit specialist with more than 18 years’ credit and sales experience.

ASIC clarifies HEAS not a credit product

Outside of brokers, it is believed that financial planners may also be able to access the HEAS product.

According to the Australian Securities and Investments Commission (ASIC), financial planners can advise on the Home Equity Access Scheme without needing a credit licence, as the loan is not deemed to be a credit contract.

The confirmation comes after financial planner Michael Miller from Capital Advisory sought clarification from the regulator as to whether this was an option that financial advisers could explore in clients’ retirement plans.

ASIC’s senior executive leader for credit and banking, Tim Gough, responded to Mr Miller stating: “As the scheme is provided for under statute and not under a contract, these debts are not considered ‘credit contracts’ under the National Credit Act and therefore not regulated under the National Credit Act.

“We consider that financial advisers can advise on the scheme without [requiring] an ACL, notwithstanding their functional equivalence to reverse mortgages that are regulated under the National Credit Act.”

[Related: Home equity access scheme not a credit product: ASIC]