Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
‘Collective wisdom of the past’: Foresters Financial notches 175 years
Investment bond specialists Foresters Financial toasted an unusual milestone in financial services this month, the group celebrating 175 years of operation and toasting a long history of product provision in an ever-changing market across the globe.
The member-owned financial services group, which has $400 million in funds under management, was originally created in 1849 and now provides three main financial products; investment bonds, education bonds and funeral bonds.
According to chief executive Emma Sakellaris, the group is proud to celebrate its “rich heritage”, which stems from its early days as Ancient Order of Foresters in Britain.
“We were formed before the time of government social welfare, so we’re very proud of our heritage of offering support in times of illness, disability, old age, and death – our perpetual sense of purpose reflected in our Latin motto, meaning unity, benevolence, and harmony,” Sakellaris commented.
Key to the ongoing survival of Foresters, the CEO explained, has been its ability to continually reinvent its product offering over generations while retaining its core ethos of being a member-owned friendly society.
“Today, we achieve this outcome via investment bonds that give families and individuals an alternative investment vehicle to superannuation,” she said. “This is because these bonds come with a 125 per cent Contribution Rule that allows the income component of any withdrawals from the investment fund to be tax-free after 10 years.
“Although the first year’s contribution is uncapped, its sets the bar for all future annual contributions that are capped at 125 per cent of this initial investment. If this benchmark is breached, it resets the start date for the 10-rear tax rule. Missing a year’s contribution has the outcome, as does any withdrawals inside 10 years.”
Sakellaris explained that education bonds, in particular, which have a minimum investment of $500, were becoming a popular option to meet rising education costs in an an inflationary fiscal environment.
“These bonds are a long-term savings plan that allows for tax-effective saving and investing to meet educational expenses. They are divisible between the investor and beneficiary, with the latter being able to receive the investment income.
“Like other investment funds, the money is pooled and invested in various asset classes such as property, shares, fixed income, and cash. Investors can choose from one of four investment options – sustainable, balanced, growth and high growth – as well as having the flexibility to switch between them.”
