FIIG Securities has opened the corporate bond market to almost two million retail investors, by dropping the minimum investment size from $50,000 to $10,000.
The move means that private investors, including SMSFs, can directly own a diversified portfolio of investment grade corporate bonds while still maintaining a prudent exposure to other asset classes.
CEO Mark Paton says the service marked a new era for Australian investors who, until now, had largely been limited to equities or cash because of the larger minimum parcel size for corporate bonds.
“Just five years ago the corporate bond market was closed to personal investors and dominated by large financial institutions,” says Paton.
He says that FIIG opened the market to personal investors, first by dropping the minimum from $500,000 to $50,000 and now to $10,000.
“This puts direct corporate bond ownership within the reach of the vast majority of retiring investors and SMSF trustees.”
Clients with investable assets of $200,000 or more can make a prudent allocation of 25 per cent of their portfolio to fixed income assets with appropriate diversification, says Paton.
According to the Investment Trends November 2012 Investor Product Needs Report, there are 1.8 million Australians with at least $200,000 in investable assets excluding their home and non-SMSF super.