NAB launches margins loans for SMSFs
In a bid to boost demand for its margin lending services, National Australian Bank (NAB) will launch a margin loan product for self-managed super fund investors (SMSF) next month.
NAB head of margin lending Adrian Hanley admitted that the demand for NAB's margin lending had slowed with increasing volatility.
However, NAB had noticed a demand for leverage among SMSF investors and is building a margin lending product to capture that need, Hanley said.
NAB is structuring the product to work in the lower tax environment that is more suited to SMSF investors, according to Hanley.
A negatively geared portfolio works well in a high tax environment, so NAB has to work to reverse that relationship in their product, he said.
"Clients in SMSFs will take a lesser degree of risk so they can positively gear the portfolios which will ultimately benefit them in a lower tax environment," he said.
Investors also want to move existing leverage into a different tax structure, he added.
The launch comes amid a sustained drop of consumer interest in margin loans across the industry as a result of the depressed share market.
"Across the industry, margin lending volumes have drifted downwards as market headwinds lift over the last few months," Hanley said.
Managing director of Matrix Planning Solutions, Rick Di Cristoforo said their margin lending was declining for some time, even before the market volatility.
There isn't a huge amount of interest in margin lending at the moment, he said.
"There are better ways for many people to access debt," Di Cristoforo said.
"Until the markets really turn around, it's going to be a bit of a struggle for margin lending," he added.
AUTHOR
Staff Writer
Recommended for you
With HNW investors representing the largest market for alternative assets, Praemium and CoreData research underscores why this presents a compelling opportunity for advisers.
Having completed the successful integration of Diverger, Count has upgraded its forecast for expected synergy benefits achieved by the acquisition by a third.
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
Iress has increased its forecast adjusted EBITDA by $5 million for the 2023/24 financial year in light of the sale of its platform business to Praemium and hinted at a return to dividend payments.
