Big Four bank to trial SMSF property strategy
One of Australia's Big Four banks is to run a six-month trial of a fractional property investment model and trust structure. It was developed by ASX-listed small cap technology firm DomaCom Australia Limited. Arthur Naoumidis, DomaCom's chief executive officer, in announcing the deal last week, said that if the trial of DomaCom's investment platform was successful, it should lead to a commercial deployment within the bank. He declined to name the bank.This announcement adds to a series of positive announcements from DomaCom, which had a current (31 January 2019) market capitalisation of just over A$10 million.The company has been pitching its property investment strategy to the self-managed-super fund market, and other long-term investors, in the form of "fractional investments", via its specialised platform.Last year the company had a major win, with the Full Federal Court ruling that the action of the daughter of a SMSF member who rented a property held by a DomaCom sub-fund, in which her father was one of the investors, did not breach the Sole Purpose Test.And in November, after six years of negotiation, ASIC agreed to allow the company to deliver a senior equity release product for ageing retirees. It is to be provided by financial advisers who complete an accreditation course.Naoumidis said his company plans to use the ASIC ruling to create an alternative source of funding, by allowing retirees to sell fractions of their house whilst remaining in their home.In its quarterly update last week, DomaCom stated that the company is ""targeting a March/April launch" for its SER product. It also hinted that a residential loan facility was "being negotiated ... targeting investors who are struggling to get bank loans - particularly SMSFs."