Capital protected products to surge
Peter van der Westhuyzen
Macquarie Investment Lending is preparing for a flood of new capital protected lending product applications following the introduction of new rules to govern the products.
The new capital protected borrowing legislation replaces the Interim Methodology and is expected to increase returns to investors.
Macquarie Investment Lending head of sales and marketing Peter van der Westhuyzen said advisers had indicated earlier that they were waiting for the new rules to be implemented before putting clients into the products.
“For investors acquiring capital protected products from July 1, 2007, the new rules broadly limit the borrowers’ interest deduction to the Reserve Bank of Australia (RBA) personal unsecured loan variable rate,” van der Westhuyzen explained.
“For some investors, this might reduce their cost of investment when compared to the Interim Methodology.
“For example, investors on a five year protected loan with an interest rate of 13.1 per cent per annum could potentially get an interest deduction of up to 13 per cent per annum (the current RBA personal unsecured loan variable rate), compared to only 11.13 per cent per annum under the previous Interim Methodology.”
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
