New approach urged on capital protection
Bendigo and Adelaide Bank has launched a new capital-protected product to the market, arguing that previous capital-protected structures did little to safeguard the interests of clients in the lead-up to the global financial crisis (GFC).
The banking group’s new product, Trinity 3, is being marketed as a platform providing investors with access to discretionary investments such as shares and managed funds, model portfolios through a separately managed account structure and cash products.
The capital protection element in the new product is delivered via the model portfolio arrangement.
Launching the new product to the market today, Bendigo and Adelaide Bank wealth management and third party banking executive, John Billington, claimed there was a need for industry participants to rethink the way they offered capital protection to investors.
Referring to the GFC, he said that what had been seen during that time was that as soon as markets fell, investors’ assets were sold down and their capital was cash-locked.
“This was not only frustrating to the investor, but meant many missed out on the subsequent upswing,” Billington said.
Referring to a recent research report revealing that almost 20 per cent of advisers had indicated they intended to start using or increase using capital protected products, Billington said product providers needed to build more effective strategies that that protected assets without removing investors’ access to their capital.
AUTHOR
Mike Taylor
Recommended for you
An FAAA recommendation to make PY advisers subject to non-compete clauses would place candidates in a “hostage situation” with their employer and potentially deter new entrants, say commentators.
While the profession struggles to keep up with strong consumer demand, a third of people who have passed the ASIC adviser exam aren’t actively practising, so where is this missing third?
Half a year after Count Financial told its advisers to exit several Metrics Credit Partners funds, research house Lonsec has now downgraded two of these products over governance concerns.
As the advice industry evolves with technology, two business consultants have said successful advice firms will be those which focus on delivering an “experience” for their clients, beyond just a transactional service.
