Branching Out - Resimac

Self-managed super funds
are the fastest growing
area of lending in australia
– and a major opportunity
for brokers
Self-managed Super fundS
(SMSFs) are not new. However,
disenchantment with the share market has left
investors wanting greater control over their
retirement savings, and when superannuation
laws were amended to allow SMSFs to borrow
to purchase an investment property, an
opportunity for brokers to diversify into a
new area arose.
There are already 458,561 of these
funds and this figure is growing at a
rate of approximately 2,500 per month,
according to the Australian Taxation Office.
Furthermore, the Australian Prudential
Regulation Authority (APR A) reports that
as of December 2011, 30.6 per cent – nearly
one third – of super assets were comprised
of SMSFs.
Required Finance broker Anthony
D’Alessandro says he writes SMSF loans
weekly, and being able to support SMSF
clients now forms a large part of the
company’s offering. “SMSF loans count for
around 20 per cent of our total business
and we’re hoping to increase that number
beyond 40 percent with further training,”
Mr D’Alessandro says.
Affiliate Finance and Property’s Mary
Sartinas, who is currently working on
five SMSF loans, has a similar view. “If
legislation stays as it is and lenders reduce
their exorbitant fees, then I expect super will
become a significant part of my business,”
Ms Sartinas says.
The lender perspecTive
Lenders too are well aware of the increased
interest in investment property purchases via
an SMSF. Darren Little, head of mortgage
broking at St George, says the SMSF loan
is undoubtedly one of the bank’s fast
growing products.
Little’s advice to brokers is to just get in
and have a go. The SMSF rules are not as
complex as people think, he believes, adding
that there are already plenty of brokers doing
a good job in the SMSF space.
David White, joint managing director of
non-bank lender Australian First Mortgage
(AFM), says the benefits of getting a client
into an SMSF loan are considerable. “SMSF
loans are sticky loans,” he says. “The average
term for a residential loan is down to three
years but brokers are looking at 10 years or
more with an SMSF loan.”
Mr White says brokers are in a prime
position to offer SMSF loans due to their
having referral networks. “Half of all clients
“The average term for a
residential loan is down to
three years, but brokers
are looking at 10 years or
more with an sMsF loan”
seen would have the required amount of funds
to purchase property,” he says. “A broker
could therefore take them out of their current
super [which is] earning one per cent and turn
that into a five per cent fixed investment.”
The knowledge necessary
While SMSF lending offers growing
opportunities for brokers who want to
diversify, there’s no getting away from
the fact that the rules for funds and their
administration are complex.
Brokers need to get educated –
branching out / 27