Business News

ASIC gives DomaCom green light

Fractional property investment firm DomaCom is one step closer to delivering its senior equity release (SER) product after a decision by the Australian Securities and Investments Commission (ASIC) to approve conditional relief, which allows the product to be delivered to market.

The ASIC relief, which is subject to conditions and requirements, gives DomaCom the green light to launch a new suite of products that will allow retired Australians to sell part of their home to help fund their retirement.

DomaCom said subject to the official relief being granted, the SER product was expected to be released in the first quarter of 2018.

“The ASIC decision is the culmination of a four-and-a-half-year process of engagement by DomaCom with the corporate regulator,” the firm said.

DomaCom chief executive Arthur Naoumidis said reports had shown Australians were the most anxious about retirement out of any market in the developed world.

“Our SER product has the potential to be a meaningful solution to one of the most intractable challenges facing our economy – the difficulty many Australians have in funding their retirement,” Naoumidis said.

He said the product would allow asset-rich, cash-poor retirees to unlock the value of their home and maintain residence in it.

“Financial planners will now have a tool they can use to manage the cash-flow needs of retired clients, as well as to facilitate innovative intergenerational wealth strategies using the family home,” he said.

“This is a key milestone for DomaCom, paving the way for a series of new products based on the equity release concept and with the potential to significantly build funds under management.

“We believe demand for a product of this nature is enormous and the range of available alternative products continues to decrease.”

It is expected the SER product will be structured as a financial product requiring a product disclosure statement and the advice of a financial planner if retirees want to use it.

Retiree clients would also have the right to repurchase equity that had been sold should they change their mind about the transaction, DomaCom said.

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