What does OzB think of this account?
Has anyone here invested in this account?
Would this be a good option for investing $2k to 5k?
http://www.latrobefinancial.com.au/Investors/12MonthTermAcco…
Any feedback on La Trobe financial's 12 month term account (5.2% p.a.)?
Lnhylated on 12/03/2017 - 17:06
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To their credit, they are pretty upfront about the risks and basics of the investment. It's almost entirely mortgages. A correction to the housing market would risk some of your money, while your maximum upside is capped. I would ask myself how they make their money providing money to a lender charging higher than market mortgage rates. I would guess that the mortgages are riskier than average. Have a think about the type of homeowner forced to pay 2.5% or whatever more than others for their mortgages.
Could be a ponzi scheme too.
They are towing a fine line when they refer to it as a "term account", some people will intepret it as a term deposit when it isn't even close.
Smells Sub-Prime
I had a few friends in the US who had their savings in mortgage based schemes. When the US housing markets crashed, they lost everything. I'd do some serious research on this and if it smells sup-prime as Steptoe suggests, run like hell.
I lost my life savings placing my money in something similar. The CEO ended up doing a few paltry years in jail. This is not a term deposit and not a bank and inherently much more risky for only a few percent extra than can be had in a at call savings account such as ME Bank. Do your research, realise some financial planners get kickbacks for recommending products so their advice may not be impartial and before placing money in something like this ask yourself if I lose this money what then, and what sort of position will I be in. Skewed advice from someone burnt but these First Mortgage Funds are risky.
Unsecured deposits at 5% (max.). Better off investing in bluechip hi-dividend stocks.
Fed and Rba interest rates are hinted at rising within 12 months. I think 3% bank rates are still the best for my stash.
The rates of return from the Fund are not guaranteed and are determined by the future revenue of the Fund, and may achieve lower than expected returns. Past performance is not a reliable indicator of future performance. Investors risk losing some or all of their principal investment. The investment is not a bank deposit. Withdrawal rights are subject to liquidity and may be delayed or suspended. Past performance is no guarantee of future performance. Please refer to the disclaimers link on this page for full disclaimers.
I'd rather stash my cash under the mattress.