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.
Recommended for you
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.
Lower fees and trustworthiness are the top factors enticing unadvised Australians to seek a financial adviser, according to Fidelity International, common across all generations.