The RBA has held the official cash rate of interest at an all-time low of just 1% and thousands of Australian investors, including retirees, self-managed superannuation funds (SMSFs), companies and individuals, are now left earning less than 2% on their cash.
For many investors the fall in rates over the past eight years has led to:
• less retirement income to live off.
• fewer family holidays.
• reduced discretionary spending.
• downsizing of the family home.
• taking risks with volatile investments (e.g. stock market)
• in many instances, financial duress.
These things can be frustrating to investors. And to keep ahead and maintain their lifestyles, many are looking for alternatives. For many, earning a low rate of return on their idle money is neither desirable nor sustainable, particularly given that inflation is currently higher (1.6% per annum) than the cash rate (1% per annum).
Low interest rates have resulted in innovation within the financial services industry to fill the gaps left by the banks, both in terms of investment products and also deployment of capital. Non-bank alternatives have created products for investors to consider.
Since the Royal Commission in particular, many banks have tightened their lending policies, meaning that many businesses have been unable to secure bank funding, creating a substantial gap in the market for non-bank alternatives to provide a conduit between borrowers and investors seeking income.
One alternative is Mayfair Platinum. This investor-facing division of the Mayfair 101 group (an investment and corporate advisory group with offices in Melbourne, Sydney and London) specialises in providing qualified investors with income-generating investment products.
Qualified investors (individuals, self-managed superannuation funds, companies and trusts) can access term-based investment options starting from $100,000 and ranging from three months to five years, with the option of monthly interest payments.
Mayfair 101 Ltd is licensed by the Financial Conduct Authority in the United Kingdom, and group members hold assets in 11 countries across industries including wealth management, corporate bonds, business credit, fintech and real estate. Their strategy involves selecting businesses that banks generally won’t lend to due to their lending policies. They then apply capital, management, finance, sales, marketing and operational expertise. You can obtain more information on or 1300 794 460.
Important: Investors considering making the switch to a non-bank alternative to achieve a better return should remember that all investments carry a level of risk and they should be comfortable with the investment strategy of the company they choose to invest with.
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