Commonwealth Bank of Australia’s (CBA) structured investments division has been marketing its capital-protected loans beyond the product’s traditional self-managed superannuation funds (SMSF).
“We just finished our June 30 campaign, which focuses on investors other than SMSFs, so individuals,” the division’s head of business development, Moghseen Jadwat, said.
Jadwat said SMSFs, which hold an estimated $400 billion in investments, remained attractive but CBA was not alone in that view.
“This solution works for individuals as well because they can leverage up to 100 per cent and they don’t have to put in any equity,” he said.
He said direct equities also appealed to CBA’s structured investments team because the asset class made up about 35 per cent of SMSF assets.
The team was conducting a strategy session this week at which it would decide a calendar for new product issuances, he said.
“There are a few in the pipeline, but whether we go to market with them will depend on market sentiment and investor appetite. We’ll do some sounding with advisers before we go to market with any new product,” he said.
“What we’ll do is sit down and look at: what are the products? What are they going to look like? Will they be for capital growth or income or a mixture? Are they going to give exposure to Aussie equities or international equities or commodities? What are the underlying themes in the market? What are the opportunities?”
Jadwat took part last week in SMSF strategy days around the country, sponsored in part by InvestorDaily, and said a theme had emerged in his discussions with advisers.
“The underlying theme is we’ve got to get out there more and broadcast this product a little bit more,” he said.
“We’ll roll out roadshows over the next six months to tap into a bigger portion of the market.”
ASIC has said it would take a closer look at the products over concerns that the risks involved were not clearly explained to investors.
Jadwat said CBA was unconcerned with ASIC’s plans for closer scrutiny because the bank’s products were written with a view to transparency.
Also, he said CBA required advisers to pass an exam before they sold the protected loans and also required prospective clients to pass a test before they invested.
