Advisor Group, one of the largest independent broker/dealer networks, is rolling out a securities-based lending offering to its 10,000 advisors, providing them with the ability to source loans for clients without losing touch with the assets.
“In a time of a need, if [clients] have to look for this alternative somewhere else, them securing that somewhere else might include them needing to move the assets,” said Kristen Kimmell, executive vice president, business development, at Advisor Group.
The firm is partnering with Supernova Technology, an automated digital lending solution, to bring the capability, called Personal Credit Line. The offering allows clients to borrow against their investments without affecting the underlying value of their portfolios.
“It’s a process that’s less cumbersome than the full loan process because it’s really secured with that portfolio, so it usually is a faster process and lower cost associated with it,” Kimmell said.
In addition, there’s no cost to set up the loan and maintain it. The firm will offer competitive interest rates to be determined by some underlying factors, such as the size of the loan and value of assets the client is holding.
The tool can also help advisors stay on top of clients’ personal goals.
“Liquidity can pose as a challenge, as it can completely disrupt their financial plan and their goal, and this tool can bridge that gap for them and not disrupt that long-term plan,” Kimmell said.
It is increasingly clear that a variety of tools to handle banking services like cash, credit and liabilities management for clients are no longer the sole domain of the wirehouses and big brokerages. In fact, the space between banking and independent wealth management is growing increasingly blurry, with independent advisors gaining the capabilities and service offerings that were once only in the domain of wealth managers inside banks and full-service firms.
Growing accessibility, changing customer expectations and the subsequent response in tech development have accelerated the trend.
“We’re closing that gap on the disparity on what has been traditionally offered at the wirehouses and making sure that those holistic services aligned with wealth management can be offered in the independent channel as well,” Kimmell said.
Several independent broker/dealers offer similar securities-backed loan programs. Commonwealth Financial Network, LPL Financial and Kestra Financial, for example, use Goldman Sachs’ GS Select offering.
