Arthur Naomidis, CEO
An application to the DomaCom Fund can only be facilitated via a licensed DomaCom-accredited financial adviser who has successfully completed the DomaCom’s Adviser Accreditation Program.
Call to Action:
I invite to to become one of the first financial services professionals to participate in the DomaCom Accreditation delivered by Mentor Education Group.
The Fractional Property Investment (FPI) market represents a significant opportunity for properly trained professionals to extend their client reach and assist investors to acquire an asset allocation to a property of their choice.
The DomaCom Accreditation program is mapped to industry-based Continuing Professional Development policies so that your DomaCom Accreditation will be recognised as providing the key skills required to provide advice to clients considering Fractionalised Property Investment (“FPI”) strategies.
DomaCom is committed to the process of ensuring that advisers are well placed to provide FPI strategies assist their clients to make informed decisions. The program attracts 1.5 hours Continuing Professional Development
Participation in the DomaCom Accreditation Program will assist advisers to develop a successful FPI practice through a better understanding of:
- Property Investment Liquidity & Diversification
- The Challenge of SMSF Property Asset Allocation
- “Asset Rich but Cash Poor” Retirement Funding
- Step Up to DomaCom Accreditation.
Household Capital enters Australian retirement sector with innovative new retirement loan
From Household Capital
Household Capital, an independent, specialist retirement funding provider, has announced it has entered the Australian retirement sector with an innovative loan product that allows retirees to use equity in the family home to fund retirement expenses, enhance income or provide financial support to their children and other family members.
Household Capital provides Australian home owners access to additional retirement funds by using a low interest rate loan to transfer a portion of the value of their homes into their superannuation fund or an investment account. Those who access the loan have guaranteed lifelong occupancy of their home and never have to repay more than the value of their home.
The Household Loan is designed to meet the needs of Australian retirees by allowing them to balance their savings, continue to grow their assets during retirement, and harvest a sustainable income from their investments.
Joshua Funder, Chief Executive Officer of Household Capital, said Australians were living longer but many did not have enough super savings to provide sufficient income throughout retirement.
“Retirees want to stay at home, but many are struggling to make ends meet as they age,” Mr Funder said. “Our goal is to deliver a values-based service to help Australian retirees Live Well At Home.
“We combine a retiree’s home equity, superannuation and aged pension to provide adequate, reliable, lifelong retirement funding while the retiree continues to live at home.
“It provides responsible and flexible access to lifetime savings, allowing retirees to make sound economic and lifestyle choices.”
There is currently over $900 billion in untapped home equity owned by Australian retirees, with approximately 80% of retirees owning their own home.
Yet the average retiree’s super balance lasts only 10-15 years into retirement, leaving many Australians living on inadequate income or reliant on the age pension in their final years.
The Household Loan allows retirees to access their home equity to:
- Enhance retirement income delivered through superannuation or investment accounts
- Pay for home renovations throughout retirement
- Fund in-home health and aged-care costs
- Support other family members with first home deposits and education expenses
- Fund the transition to supported aged care accommodation
- Refinance home loans where repayments reduce retirement income
- Guarantee lifetime home occupancy.
Household Capital has accessed wholesale funding to offer customers highly competitive interest rates, significantly lower than those previously charged by the banks.
Household Capital does not pay commission or trailing commission to brokers and there are no ‘break costs’ or hidden fees. Instead, Household Capital’s financial services are delivered alongside superannuation funds or financial advisers to fit each retiree’s specific needs.
Household Capital receives an establishment fee to cover the costs of putting the loan in place and interest is charged on the capital drawn from a person’s home. The final amount is paid when the person leaves the home and the house is sold.
Mr Funder said Household Capital’s proposition appealed to a broad range of home owners because it was suitable for all stages of retirement.
“Household Capital’s loan is suitable for people approaching retirement who have a low superannuation balance that needs a boost,” Mr Funder said. “It also works for those people in mid-retirement who may have depleted their superannuation and need more income, as well as those retirees who may need funding for the transition to supported care.”
Broader economic benefits
Nick Sherry, Household Capital Chair and former Federal Minister for Superannuation, said governments around the world were struggling with the dilemma of ageing populations and smaller workforces – at a time when the costs of healthcare, aged care and pensions are increasing.
With Australia’s median household superannuation balance at retirement currently around $200,000 and the median value of home ownership at retirement $700,000 – Household Capital’s offering potentially releases billions of dollars into the economy to meet the real needs of retirees and their families, Mr Sherry said.
“For many Australians, ageing in the home you’ve been living in helps maintain family and community networks and use of local services,” Mr Sherry said.
“Selling the family home can result in loss of entitlement to the aged pension and the cost of buying and moving to a new home can mean significant loss of capital.
“We want to make a significant positive impact on the wellbeing of retired Australians. The substantial savings held by Australians in their family homes is a largely untapped resource that can be better utilised to help retirees live well at home.”
BY ELIZABETH MCARTHUR | THURSDAY, 13 JUN 2019 11:52AM
The ASX-listed investment platform has released a first of its kind senior equity release product for Australia, targeting financial advisers working with clients over 60.
DomaCom’s senior equity release product launched this week with an accreditation course that will enable advisers to provide sign-off to seniors over the age of 60 who are looking for an equity release on their home.
It is the first equity release to be issued as a financial product in Australia. All other equity release products are structured as either credit or real estate products.
DomaCom said the traditional structuring of these products excludes financial advisers who do not hold the appropriate credit or real estate license required to use those products.
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DomaCom chief executive Arthur Naoumidis said: “Senior Equity Release is the first financial product in this space that will give financial advisers a significant place at the table in a growing and vulnerable sector that in many cases is asset rich and cash poor. Hence accreditation is crucial and the first group of advisers will be going through that over the next few days.”
DomaCom said it took six and a half years for the company to secure the necessary reliefs from ASIC to launch the product.
The product has undergone substantial review from the regulator, as well as consumer testing.
The senior equity release will mean advisers can connect aged clients with wealth accumulation clients such as SMSFs – who may have a similar time horizon in terms of their respective needs.
Seniors can apply to sell a fraction of their home with this product and must nominate the amount they then wish to receive as a lump sum or monthly payment.
DomaCom said by receiving a monthly payment through this product seniors will have flexibility to dial up or down the payments as additional funds are required.
When the property is sold in full the vendor and investors receive their share of the sale price.
Investors have the option to sell their units via DomaCom’s online liquidity facility which has buy/sell order screens.
Comprehensive Income Products for Retirement (“CIPR”).
The Treasury has today appointed an Industry Reference Council to guide the development of financial products that may suit Asset Rich but Cash Poor retirees.
The DomaCom submission is particularly interesting as they are challenging the rules to get a better deal for Senior Australians…
Equity release takes many forms and if it is your decision to “downsize” by selling your home and purchasing a cheaper one, the ATO has introduced some changes to Super Contribution Rules that may interest you…
Equity Release provides the opportunity to Live Well in Retirement. The vast majority of Baby Boomers are Asset Rich but Cash Poor.
Will they take the cash or leave it behind?