Another "first" for Equitable

Advisers can be assured that while the product is new, the style isn't. Equitable, which believes 'it's better to be first', will be lending on first mortgages only. "Advisers like us to stick to our knitting," says Equitable's national sales manager, Gary Stevens.

The Tasman Mortgage Fund will be introduced to the market over the next few months and will join Equitable's unique stable of fixed-interest investments:

• First Mortgage Bonds
• Mortgage Income Trust and
• First Mortgage Debentures

First in supporting our customers: the advisers

Hundreds of advisers and advisory groups throughout New Zealand recommend Equitable's products, which are also available on wrap platforms including Aegis, ING One Answer, and First New Zealand Capital. With the Tasman Mortgage Fund, Equitable will, as it has always done, meet with advisers face-to-face to introduce them to the product, says Stevens.

Advisers are essential to Equitable's business and it's a symbiotic relationship that Equitable likes to nurture. Some of Equitable's advisers have been selling the company's products for decades and the feedback shows that consistent customer service is right up there alongside solid dependability as a strong plus for Equitable.

What's more, in an uncertain world, the products are readily understandable and easy to sell – especially to older investors with risk profiles that demand stable returns and a sound capital base.

Evolution, not revolution

The old lady of the Equitable stable, the tax-paid bond has been on the market for more than 30 years, outliving competitors and holding the position of largest active tax paid bond in the country.

While other finance companies have come along, hit the headlines, and disappeared over the years, conservative to the core Equitable has steadily cut out a market niche for itself with a unique range of fixed-interest products. Outside of the banks, says Stevens, there are few conservative investments such as Equitable's.

There are opportunities in Equitable's products for investors in every tax bracket.

• The tax-paid First Mortgage Bonds appeals to investors wishing to simplify their income for tax purposes and is suited to those taxed at 33% or 39%.
• The Mortgage Income Trust, a unit trust offering a fixed return, is especially suited to those on a 33% tax rate, and passes on full imputation credits.
• People who fall into the 19.5% bracket are best suited to First Mortgage Debentures although it's popular because all marginal tax rates are covered and the product has Approved Issuer Levy status.

All investments from one to five years are both fixed term and fixed rate. In an environment where advisers are factoring in eventual interest rate declines, such certainty appeals to clients.

Investment cycles come and go, but Equitable remains resolute When it comes to "wow, pzam, bang", Equitable is happy to leave that to others – especially when investors want higher yields.

First mortgage commercial finance by its nature is more conservative than many other types of finance. As a result Equitable's products have a place throughout the investment cycle. "Our products are always there," says Stevens.

Equitable sticks to sound risk management and corporate governance principles. "When we do our lending we always think about investor protection," says Stevens. "If we wouldn't lend our own money we won’t lend."

More to Equitable’s bond product than meets the eye Equitable has a few little known facts up its sleeve. The tax paid bond has a built-in savings option allowing the investor to lock interest rates for up to five years and save either on a regular or ad-hoc basis through to maturity.

Investors can also, if they choose, draw down capital on a monthly or quarterly basis from income producing investments. This would suit investors wanting to meet costs such as rest home payments.

Heritage

Equitable started life in 1972 in Christchurch and has stuck to its core market, growing from small beginnings to more than over $350 million in funds under management.

Equitable went on to launch the Mortgage Income Trust in 1996 and First Mortgage Debentures in 1998, both of which are now mature products.

Proudly New Zealand owned and operated, Equitable has weathered the ups and downs of the financial markets thanks to its unswerving attention to stability, security, longevity, service, and a good solid brand. The boards of Equitable's principal operating companies are robust and its two executive directors have been with the company since it was purchased by the Spencer family in 1993.

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