Planner offering to invest in ‘plonk’
A new wine investment scheme is being promoted as a customer loyalty plan for financial advisers, with investors getting their returns in the form of bottles of wine.
My Wine Club investors make a single outlay of $1,562, to lease one 0.0062 hectare block in the Rymill vineyard in the Coonawarra for the 16 years of the scheme.
Subsequently the investors receive 216 bottles of wine during the scheme, which are valued at about $7.50 a bottle. The wine is sold at wholesale price and the retail value is estimated to be about $20 a bottle.
My Wine Club chief executive officer Jon Garvey says that for advisers, the investment is something different to introduce to clients.
“The adviser can use the scheme as a loyalty program for their clients, where the adviser buys the membership and the wine and gives the bottles to select clients.”
Garvey says the scheme also creates another point of contact with clients as most people drink wine and like talking about it.
“In the gift market it is the type of gift people want to get under loyalty programs,” he says. “It can also be used as a means to canvass new clients from outside the existing client base.”
“It is a business tool and from that the adviser can develop other business such as the company’s superannuation.”
Advisers are paid 10 per cent commission on every investment they sell.
Lonsec has recommended the scheme, and indicated the internal rate of return will be between 12.1 and 22.5 per cent.
Garvey says the scheme is low-risk. If Rymill ceases trading; the club will just bring in another winemaker.
“The scheme is low-risk with simple compliance issues and is not tax-effective,” he says.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
