In its latest quarterly update, Generation Development Group has reported a 55 per cent year-on-year increase for its investment bond sales, with bonds sales reaching $1.015 billion for FY24–25.
The final quarter of 2025 alone saw a record of $317 million in investment bonds. This represents a 60 per cent increase on the prior corresponding period.
Generation Life attributed part of this growth towards the Division 296 tax measure, which will apply an additional 15 per cent tax to earnings on balances above $3 million.
The new tax has driven some super members to explore alternative options to super for balances exceeding $3 million, including discretionary trusts and investment bonds, it said.
Commenting on the results, Generation Development Group chief executive Grant Hackett said the group plans to continue capitalising on the opportunities presented by the Division 296 “double taxation” rules for balances over $3 million.
He also said the group will further expand its product suite and capabilities to deliver an improved client experience.
Generation Life now manages $4.4 billion, while the other businesses in the group – Evidentia and Lonsec Investment Solutions – now manage $14.8 billion at 30 June 2025.
Generation Life chief executive Felipe Araujo said the record inflows in the June quarter followed the launch of a new product disclosure statement for its investment bond product, additional model portfolios for advisers, an increase in the number of tax optimised strategies and enhanced estate planning features.
“With the outcome of the federal election strengthening the likelihood of changes to the taxation of high superannuation balances, we are seeing increasing engagement from advisers and investors alike,” Araujo said.
“We have commenced work on numerous initiatives to ensure that we are well placed to capitalise on this enormous opportunity.”
Araujo said the group’s strategic alliance with BlackRock had also been a significant milestone for Generation Life, allowing it to broaden its holistic retirement solutions.
“This strategic collaboration is poised to enhance our product portfolio and extend our market penetration, representing a significant advancement towards the accelerated growth of our lifetime annuity sales,” he said.
“Workshops and client engagement for the design of new product features and an institutional offering have already commenced.”
Speaking to InvestorDaily, Araujo said with the government exploring tax reform as part of its economic reform roundtable, there is likely to be a greater focus on tax changes by the government, beyond just the Division 296 tax.
The stronger focus on broader tax reform he believes will drive further interest in investment bonds given their tax-efficient structure, with earnings taxed internally within the investment bond structure.
“Every time the focus goes on tax, it helps the story of an investment bond because it’s a structure that focuses on after tax results,” he said.
For this financial year, Araujo said Generation Life would focus on ensuring its proposition grows with its target market.
“We will look at whether we need to develop new [types of investment bonds] or introduce features to increase their attractiveness and more importantly, increase their usability,” he said.
