The Senate Economics References Committee of the Australian Parliament has established an Inquiry into Improving consumer experiences, choice, and outcomes in Australia’s retirement system.
James Huey, Executive Chairman of Futureproof today announced that the Company has been called to appear at the Senate Enquiry following recognition as the only fintech delivering transformative product innovation in retirement & aged care funding through its breakthrough Equity Preservation Mortgage®.
This is a new financial instrument, made available via a SaaS product platform, only to government, banks, insurance carriers and regulated lenders to deliver long-term annuity income or to fund products & services for every life stage – with no depletion of home equity or sharing of property appreciation. Home wealth remains fully in tact to fund future needs or to pass onto the family.
Futureproof CEO, John Innes said:
“Futureproof is addressing two of the major issues of our time affecting economies with ageing populations – the growing retirement funding gap and the inter-generational unfairness that prevents the full transfer of all home wealth upon death which sees the next generation unable to enter the housing market and, ultimately, unable to fully fund their own retirement.
As the Dependency Ratio of working age to retirees rapidly deteriorates to 2:1, this cannot end well for taxpayers nor retirees.“
Mr Innes explained:
“With only one limited exception, Australia’s leading financial institutions, disappointingly, made no submissions to the Aged Care Royal Commission and the subsequent Taskforce established by the Minister for Health & Aged Care.
This muted response makes very clear that our banks and insurers simply have no new solutions to offer Government to address a growing fiscal problem caused by population ageing and no real product innovation to address the growing funding issues of the majority of their own ageing customers, who are asset-rich cash-poor, around retirement.
Without a new approach Government is left with very limited and unpalatable policy options to increase taxes or introduce a two-class system that sees new means-tested levies for the poor and a user-pay system for others, to fund retirement & aged care.
The last thing anyone would want to see is Government policy forcing Australians into high-risk expensive reverse mortgages that are simply not fit-for-purpose, with the unintended consequences of exacerbating inter-generational unfairness as the average Australian family’s single largest asset is rapidly depleted, leaving no inter-generational wealth transfer or inheritance upon death.”
The Australian Government is to be commended for widening the Terms of Reference of this Senate Enquiry to reach out, for the first time ever, seeking new ideas, innovation, new product solutions and thought leadership directly from the fintech industry.
Having only recently stepped out of stealth mode, Futureproof is now able, through this Senate Enquiry, to brief the Australian Government on the opportunity our Equity Preservation Mortgage® presents to, finally, open up a new $2Tn pool of capital previously locked up in Australia’s residential housing. This would create a new 4th pillar of retirement & aged care funding.
Mr Innes explained:
“What has been lacking to date is a fiscally responsible low-risk financial instrument that, unlike reverse mortgages, is capable of monetising home capital with no equity depletion – this is a gamechanger that benefits all stakeholders.”
In global collaboration with Accenture, Futureproof is now bringing the Equity Preservation Mortgage® to market in Australia and the United Kingdom in late 2024. This nextgen mortgage will be written by a select group of Product Issuers and Institutional Partners, including banks, insurers and non-bank lenders.
Submissions from Futureproof and Insurtech Australia may be viewed on the Enquiry website.
