What has happened to BT margin lending?

The formaltakeover of BT by Westpac will leave the new entity with two margin lending operations.

Later this month BT Margin Lending will launch a package of online initiatives designed to help financial planners educate clients about margin lending.

The package is available to any financial planner who has, or applies for, a log in to the BT web site.

The timing of the package coincides with growing industry speculation that financial planners are becoming more cautious about exacerbating risk with margin lending strategies.

BT’s package, called the Lifestages Series, will be introduced to financial planners through business development manager visits. It contains three parts.

The first is a series of six hypothetical case studies ranging from a single 20-something on about $35,000, through to a 60-year-old (dubbed “The Super Sower”), in the highest tax bracket and so close to their RBL that margin lending may be a suitable complement to super.

The case studies are an attempt to identify the difference between using margin lending to save for specific goals (home, child’s education) versus using the strategy with a lump sum to diversify investments and build wealth.

The package also includes an online calculator, which uses variable time horizons, gearing ratios and interest rates to calculate portfolio growth, and a series of model presentations customised for the six case studies.

—Prue Moodie