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Non-bank launches fixed interest investment fund

by Staff Reporter13 minute read
The Adviser

Staff Reporter

Brokers wanting to protect their income from the volatility in the global markets should diversify into fixed interest investments, according to FirstMac.

The lender has today released a fixed income managed fund, High Livez, to meet demand from retail investors for access to quality Australian bonds with attractive yields, traditionally only available to institutional investors.

FirstMac head of sales and marketing Darren McLeod said mortgage brokers have one of the most unique financial relationships with their client base, in that their clients disclose their full financial position in a very candid fashion.


“There is an opportunity for brokers to identify not only how clients can capitalise on property investments but also where they may benefit from other investments,” Mr McLeod said.

“FirstMac is keen to work with broker channels to help leverage the potential portfolio upsides for their clients and additionally provide exposure to an asset class which offers consistent and reliable income.”

As the major banks grab more and more market share in property lending and other financial products, Mr McLeod said it has become more difficult for brokers to offer their clients specifically tailored solutions based on a broad range of products.

“We see this as an opportunity for mortgage brokers to provide additional services and to capitalise on the very special relationship they hold with their clients without fear the product provider will try and take over that advisory relationship,” he said.

Additionally, Mr McLeod said with a competitive remuneration structure, it will help mortgage advisers grow the value of their business.

“The Australian mortgage lending landscape has changed dramatically in the past five years; those mortgage brokers doing well today have been clever enough to reinvent themselves over this period to remain relevant,” he said.

“We watch this space very closely. We saw industry research published earlier this year which showed greater demand for income producing investments due to the increasing number of retirees living off their superannuation, which is expected to double from around 20 per cent of the superannuation pool to approximately 40 per cent. We realised it shouldn’t just be those who invest through institutions who should have access to these markets.

“There is a fast growing segment of Australian investors with a three-to-five year time horizon looking for consistent and reliable income. These are people with an investment portfolio, including self managed super funds, who to date have not been able to access this quality of bond investment.

“High Livez is not a mortgage fund. It is a low-to-medium risk, fixed income investment. It invests in highly-rated, medium-term Australian bonds and short-term money market securities, with risk considered lower than long-term share and property investments.”

The fund aims to return 8.30 per cent per annum after management fees, which are capped at 0.60 per cent pa.

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