Banks to dominate
Westpac Financial Services has predicted banks will dominate the margin lending market within three years.
Westpac Financial Services has predicted banks will dominate the margin lending market within three years.
At a launch for its own margin lending product, head of retail financial serv-ices Michael Migro said banking groups with large client bases would become the new players in this market, though "investment banks and stockbrokers will still have a role to play".
"Inside of three years, the largest provider of margin lending will be a bank," Migro says.
Westpac Financial Services' new lending product is targeted specifically to the lower to mid-end of the market. The minimum investment is $20,000 with a 10 per cent buffer zone and loan to value ratio of up to 70 per cent. Customers choose their investments from a list of 400 approved securities, including managed funds.
The new product mirrors the approach taken by discount lender Commonwealth Secu-rities, which has successfully targeted the lower end of the market. Tradition-ally, margin lenders have concentrated their efforts on winning over the high-net-worth client, something Westpac's private banking division is doing with their year-old margin lending product.
Current interest rates ranged from 7.45 to 8.8 per cent per annum. Crawford also said there was no establishment fee on the product, with the first 30 transac-tions being free.
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
