Aveo has introduced new contracts across its 92 retirement communities, offering three payment options. Here they are with a $500,000 village home as an example.
The Now option lets you pay a management fee of just 15 per cent now, instead of 35 per cent later. On a $500K home you pay $75,000 now and receive $500,000 when you depart. The fee is amortised over two years, so if you only live in the village for one year then 5 per cent is refunded. There is a six- month payout guarantee.
The Later option is a typical retirement village contract: You pay the lowest price upfront, with a 35 per cent management fee ($125,000) at the end leaving a payout of $375,000. The payout guarantee is also within six months.
The Bond option increases the purchase price by 30 per cent and also has an establishment fee of 3 per cent, which is non-refundable. Under this contract, you get your purchase price back, with a payout guarantee of three months. On a $500,000 standard purchase the price increases to $650,000 plus a $15,000 non-refundable establishment fee. You receive the $650,000 back when you depart.
Over the past 12 months, Aveo conducted a range of research projects designed to provide a deeper understanding of their customers.
“There remains confusion about the fees and charges associated with retirement living, creating a level of uncertainty and mistrust across our industry. We realised there was a need for more simplicity and clarity, a desire for more choice and flexibility, and a desire for certainty and assurance,” said Bridgid Allsopp, Head of Marketing (pictured right).
Impact on pensions sales tool
Aveo, which was bought by entities controlled by Brookfield Asset Management in November 2019, Inc. has also partnered with Rachel Lane at Aged Care Gurus to create new software “Village Guru”. The software enables Aveo’s sales team to provide a detailed report that shows customers the costs of the village under the different payment options together with estimates of their age pension, rent assistance and home care package costs.
Added clarity: 6 months full refund/no marketing costs
Aveo has also clarified its basic terms in an effort to eliminate ambiguity.
Moving In Money Back Guarantee – If the customer decides within six months that retirement living isn’t for them, they will be refunded in full.
No add-on costs –no capital loss, no property market fluctuation variations, no marketing or sales costs.
Six Month Payout Guarantee – entry payment and any additional contributions are returned within six months of the customer leaving the community.