CBA launches adviser margin-call tool
Commonwealth Bank of Australia’s broking arm CommSec has created a margin lending tool that enables financial planners to assess the probability that clients will face a margin call against them.
The ‘Margin Call Calculator’ as it is known has been developed by CommSec Quantitative Research, and aims to eliminate the uncertainty traditionally associated with margin calls that has prevented some investors from maximising their gearing strategies, the group says.
According to CommSec the tool allows planners to assess the probability of margin calls being made on clients in any given week, month, quarter or year.
Based on historical data collated from 21 million market simulations, the tool allows planners to use real and hypothetical market situations to develop more informed gearing strategies.
“Planners can experiment with different diversification strategies, assumed growth rates and other what-ifs, to determine the probability of a margin call for their client,” a group spokesperson says.
Planners can also determine the probability by balancing the interplay of loan to value ratios (LVRs), margin loan buffers, expected growth and the diversification mix of a portfolio.
They can also use it to determine the probability of margin calls at different buffer and gearing levels over time.
Finally the calculator can also determine the maximum amount a client can borrow through Colonial Margin Lending to buy stocks or managed funds.
Recommended for you
The central bank has released its decision on the official cash rate following its November monetary policy meeting.
ASIC has cancelled the AFSL of a Melbourne-based managed investment scheme operator over a failure to pay industry levies and meet its statutory audit and financial reporting lodgement obligations.
Melbourne advice firm Hewison Private Wealth has marked four decades of service after making its start in 1985 as a “truly independent advice business” in a largely product-led market.
HLB Mann Judd Perth has announced its acquisition of a WA business advisory firm, growing its presence in the region, along with 10 appointments across the firm’s national network.
