Tower goes direct to retirees

commissions fee-for-service investors superannuation funds cent westpac

26 October 1999
| By Samantha Walker |

Tower Life Australia hopes to raise $40 million from its new Protected Equity Bond which is being distributed direct to investors via a call centre.

Tower Life Australia hopes to raise $40 million from its new Protected Equity Bond which is being distributed direct to investors via a call centre.

National manager of direct sales at Tower, Steve Hitchcock, says there has been some interest shown by “quite a few fee-for-service planners” even though the bond will offer no commissions.

The product offers investors who are looking to retire in five to 10 years access to a five-year fixed-term investment, earning up to 65 per cent of the average growth in the All Ordinaries during this period.

It will be specifically target investors aged between 45 and 55 and will draw on two Westpac products, one of which will provide a derivative overlay to make the investment more capital secure. Minimum investment is $10,000 but Hitchcock expects the average investment to be around $25,000.

The bond has a potential return of 7.5 per cent, which makes it attractive in com-parison to a more conservatively invested superannuation fund, Hitchcock says.

“Returns from superannuation funds are about 5 to 6 per cent and aren’t really that great,” he says.

Demand is “a bit below what we expected”, but he expects the responses from a newspaper advertising campaign the group to increase before the offer closes on 18 December.

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