Michael Blake

Centuria LifeGoals, Centuria Life’s new investment bonds product, has been awarded a rating of ‘Very Strong’ by Australia Ratings. Centuria Life is part of specialist investment manager Centuria Capital Group (Centuria, ASX: CNI).

The ‘Very Strong’ ranking reflects the ratings agency’s “very strong level of confidence that the product can deliver a well-managed, robust investment structure to investors”.

LifeGoals, which launched in February this year, offers 22 high-quality complementary fund options – including sector, diversified and index funds – managed by rigorously selected investment managers. The offering has a transparent fee structure, in which all rebates are passed on to the investor, and offers a simple, flexible and tax effective investment vehicle.

Michael Blake, Head of Centuria Life, said: “The Australia Ratings report recognises ‘a modern take on the traditional investment bond structure that has achieved its objective of being a product that can provide investment, tax planning and estate planning in one solution’.

We feel this rating is a fair and accurate reflection of our offering. The report notes that ‘The benefit to investors is that the Investment Options are selected from a wide universe of available investment funds based on a rigorous due diligence process’ and this has always been our aim – to offer investment options that are consistently amongst the best available in each asset class to make it simpler for investors to choose.”

A solution for the times

Mr Blake believes that appetites around investments are changing – for the better – and that it is the responsibility of financial service providers to respond – or lose out. Due to their tax effective nature and ease of access to funds, investment bonds should be combined with superannuation as a part of most individuals long-term wealth creation plans. “Investors and financial planners demand greater fee transparency, access to high-quality managers and simplicity in their financial products. Today, products will succeed or fail based on merit, and investors expect total control and ease of use. We are delighted that Australia Ratings recognises that LifeGoals was designed for investors with this front of mind.”

Chris Dalton, Managing Director of Australia Ratings, said: “The Centuria LifeGoals product is a well thought out product that will appeal to many investors and financial planners as a viable complement to superannuation as a long-term savings product with the added flexibility of accessibility to funds.”

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The new product offers:

• 22 high quality fund options – including sector, diversified, and index funds – managed by rigorously selected investment managers
• A transparent fee structure, with rebates passed on to the investor
• Greater control, with a simple online application process and easy in-app management
• A simple, flexible and tax-effective investment solution that aims to grow accessible wealth for investors

Michael Blake, Head of Centuria Life, said: “The first guiding principle of Centuria LifeGoals is to offer high-quality, complementary funds which have been carefully selected by our investment committee.”

Mr Blake believes the benefits and control of the new investment bonds products will see them experience a resurgence in popularity.

“The current climate means more demand than ever for transparent financial products that are sold on merit, and that place control and clarity in the hands of the investor and the adviser. Centuria LifeGoals does exactly that,” Mr Blake said.

John McBain, Centuria Group Chief Executive Officer, said: “Centuria has always taken an investor-first approach – we know what matters most to our investors and we look after their interests as if they were our own. We put investors first and, in our experience, everything else follows.

“Centuria LifeGoals was built on this philosophy and is well-suited to advisers and investors looking for true competitive value.”

An industry facing change

The Australian financial services industry currently faces significant structural change, with many financial planners seeking to re-position themselves to best service their clients and many organisations looking to exit wealth management.

This shift, which has already occurred overseas, has gained momentum in Australia following revelations from the present Commissioner Hayne’s enquiry (more of which may soon come in the Royal Commission’s final report).

Mr Blake said “We are entering a new generation of financial services in Australia: various developments have created an environment where Australians are going to be more discerning customers than ever, looking extremely closely at existing and proposed financial products. We welcome the scrutiny – with Centuria LifeGoals, what you see is what you get.

“There are thousands of financial advisers in this country who care deeply about their clients’ wellbeing – I have witnessed this firsthand, and I believe they too welcome the changes that are already occurring.”

In addition, while previously Australian investors were encouraged to maximise superannuation contributions and could access superannuation funds at 55 years of age, recent changes have placed restrictions on contributions and fund balances, and changed age thresholds. These, alongside the potential for future changes, mean superannuation by itself is no longer a sure bet for investors to rely on.

By contrast, investment bonds give investors access to a sound, long-term investment with a structure that offers tax benefits, flexibility and accessibility.

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“Australians will now have more money in their pockets as a result of the changes to personal tax rates announced in tonight’s Budget. While it may seem a modest amount to households, in fact with low and middle income earners set to be have up to $530 more a year, this is a great opportunity to save this extra money. $500 is enough to invest in a vehicle such as an investment bond, and reap the benefits in the future.

“As the Treasurer has pointed out, retirement income should be a priority for all Australians, and we all have other important interim long-term financial goals we continue to aim towards, that make all the difference to Australian lives.

“We know that an effective way to do this is with ‘set-and-forget’ type vehicles, such as investment bonds. Investment bonds are highly tax-effective as they are taxed at the company tax rate of 30%, rather than the investor’s personal rate, and if they are held for 10 years, proceeds are distributed tax free.

“Vehicles like investment bonds that offer the advantages of compound interest, are flexible – allowing for additional contributions each year and access to the funds at any time – and offer very low barriers to entry, continue to be great complimentary options to super that people should consider in this environment.”

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Michael has been at Centuria since the beginning of 2016, serving as Head of Sales and Marketing. With three decades of experience in funds management, property and financial services to bring to the role, Michael has passion and a vision for the future of Centuria’s investment bonds business. He is committed to a growth strategy that aligns with the overarching strategy of Centuria Group as a whole.

In funds management since 1990, Michael’s knowledge of the financial services industry, and his relationships with key industry groups uniquely position him to grow the business.
John McBain, Group CEO, says of the appointment “We are incredibly fortunate to have an in-house candidate with the communications and market knowledge, and financial skills, to step into this role. Michael will build on the strong foundations for evolution and growth put into place by Neil Rogan, who has resigned after a successful three-and-a-half year tenure in the role.

“We have invested in building market understanding of the case for, and use of, bonds as a means of creating, transferring, and protecting wealth. Growth potential for the Investment Bonds market is solid, due in part to favourable tailwinds from market and policy changes such as the recent changes and limitations to superannuation.

“Michael has the specialised qualifications, experience, and skills to take this business into its next phase.

“We want to thank Neil for his contribution to the business and its clients. Neil drove Centuria Life’s growth to make it Australia’s third largest player,^[1] raise the profile of the product, and bring it up-to-date for a new generation of investors. Neil grew Centuria Life by over 22% during his time,^[2] and played a significant role in educating the market on this product.”
Michael Blake has further commented, “It is with great excitement that I step into this role, and I look forward to further building the success of the business and helping more investors to understand and gain access to this unique product.

“I have great belief in this product as an accessible and reliable tool for all Australians to effectively conserve and grow their wealth and achieve their financial goals, and it is with relish that I look ahead to creating the next stage of Centuria Life’s 35-year journey in helping them do so. I think this product has an important and growing role in the market and I will continue to develop our offering to best serve our investors.”

Michael was previously Director of Cromwell Funds Management, Director of New Zealand based Oyster Property Group, Director of Phoenix Portfolios and a member of the Group’s Executive Management Committee. There he was responsible for growing and managing the funds management business and strategically presenting the product offering to a changing market. He also held senior management roles at HSBC Asset Management, Zurich and Mercantile Mutual.

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[1] Based on Net FUM figures from Sep-14 to Dec-17.
[2] Ibid.

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