UBS launches loan product
UBS has launched a new product – a limited recourse loan with no margin calls.
The company launched the product, UBS Investment Builders, this week claiming it would investors the ability to purchase shares, exchange traded funds (ETFs) and listed managed funds by paying a portion of the underlying security price themselves, while UBS then provided a limited recourse loan for the balance of the purchase price.
It said a key feature of buying the underlying shares through UBS Investment Builders was that investors became the beneficial owner and received exposure to price performance, dividends and potential franking credits.
The company claimed superannuation funds would be able to use UBS Investment Builders as one of the few ways to borrow to invest in listed shares and ETFs.
Commenting on the product, UBS head of derivative sales, Travis Miller said the product was innovative because it combined a limited recourse loan with a share or ETF that could be purchased on the ASX in a similar way to buying shares outright.
"UBS Investment Builders also offer individuals and SMSFs the benefits of potential interest deductions and franking credits, and in the case of UBS Dividend Builders, access to potentially enhanced dividend income streams,” he said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
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.