Netwealth Investments Limited (Netwealth) and Income Asset Management Group Limited (IAM) have partnered to provide financial advisers with direct access to small parcel bonds through the Netwealth investment platform.
Netwealth chief executive officer and managing director, Matt Heine, said the partnership is a result of the increasing demand from Netwealth clients for bond products, particularly given the higher interest rate environment.
“The partnership with IAM signifies an expansion of our offering to include a diverse range of bonds, and furthers our commitment to better support clients by broadening the fixed income investment options available.
“By opening up access to bonds, we’re enabling more Australians to diversify their portfolios in a way that was previously restricted to large institutional investors.
“IAM’s ability to offer access to a wide array of bonds, including investment grade, high yield, domestic, and international bonds complements our existing services. The partnership expands our platform’s appeal by providing a complete, integrated solution for fixed income investments,” he said.
In Australia, bonds have typically been available to wholesale investors for purchase in large parcel sizes ($500,000 and over), however under the arrangement with Netwealth, IAM will provide investors with access to smaller bond parcels, starting at $50,000.
IAM chief executive, Jon Lechte, said this improved level of accessibility means advisers and their clients can benefit from the investment opportunities in the domestic corporate bond market.
“Corporate bonds play an important role in the strategic asset allocation of client portfolios as the middle ground of investments, with investment grade credit typically displaying much lower volatility compared with equities, and a greater level of income than cash and term deposits.
“Our partnership with Netwealth means advisers can build portfolios of direct bonds through the Netwealth platform, negating the need to manage investments across multiple platforms. It also streamlines reporting, with is available directly from the platform.
“With higher interest rates, yields on Australian corporate bonds have also adjusted and are now providing investors with attractive yields. This has seen interest from advisers increase, and now we’re able to offer more than 300 bonds via the Netwealth platform. This is a really positive development for the local adviser market,” he said.
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