JP Morgan sells margin lending business
SHAREBROKING firm Forsyth Barr is moving into the margin lending business after acquiring the firm Leveraged Equities from JP Morgan for an undisclosed amount.
Margin lending isn't widespread in New Zealand with just a handful of players including JB Were, ASB Securities and Fulcrum Securities, active in the market.
However, it is big business in Australia, and Forsyth Barr managing director Neil Paviour-Smith expects it will grow in New Zealand.
"It's something that increasing numbers of people are looking at," he says.
Although margin lending is a new operation for Forsyth Barr, Leveraged Equities is complementary to the existing operations, Paviour-Smith says.
"It gives those with wealth the opportunity to gear up. This is really no different to what they do in housing."
Paviour-Smith says the company wants to offer a margin lending service to advisers, other than those who work for Forsyth Barr.
Leveraged Equities will be set up independently from Forsyth Barr with its own offices and own staff, he says. It will also pay a trail commission to advisers who use the service.
Currently the Leveraged Equities only lends on New Zealand shares, but it is looking at offering services with Australian listed shares, and even managed funds.
While the price of the deal hasn't been disclosed, Paviour-Smith describes it as "very attractive".
Leveraged Equities has been in operation under the previous owners since 1994 and has a receivables book of over $20 million.
—Philip Macalister
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
