One of the questions we get here at A. B. Nicholas is: How do we find the perfect client for the A. B. Nicholas LeverageLine stock portfolio loan program?
On the one hand, the obstacles do exist. One of them is the face that many individuals with eligible stock portfolios choose to go solely to their existing financial advisors or brokerages for any leveraging of cash out of their portfolios, even if what is offered is significantly inferior to the terms and features of the ABN LeverageLine.
We handle these situations with care; we understand that a client may have a long-standing relationship with a skilled financial advisor, and that they may be loathe to split from that individual, even if they do not have a liquidity option that meets the clients’s needs. This “personality factor” is often tough or even impossible to crack. We therefore typically simply present our superior terms to them, personally via one of our licensed lender advisors; if that isn’t good enough to get them to split from their existing institution, so be it. There are simply limits on what one can do when non-logical factors are present.
On the other hand, if as is often the case, the client does not really have any long-term investment in their brokerage’s advisory services or he/she handles their accounts themselves independently, the LeverageLine program can be a much more persuasive value proposition.
Independent financial advisors typically have full freedom to do what is best for their clients, and upon recognizing the superior features and competitive terms of the LeverageLine, can quickly approve this option. Our own advisors are always ready to work with any independent financial advisor too. If one’s independent advisor wishes to continue advising the client while their LeverageLine stock portfolio loan is in place, that is perfectly fine with A. B. Nicholas.
Under this scenario, the client might have a line of credit at perhaps 80% loan-to-value and maybe a 3% rate, plus the many other great LeverageLine features (payment deferment, priority for conventional business lending, etc.) but will have their existing advisor continue to advise on trading within the portfolio — even as it secures the client’s line of credit.
Finding clients can be difficult, but we’ve found that educating your existing clients can be the most effective method of all. Those who regularly work with clients in areas such as franchising, commercial real estate, high net-worth product sales, insurance, or project development may have access to securities portfolios and not know of any other method to deploy the asset except as a net-worth line on a loan application or as a sale and dissolution (with capital gains tax consequences) of the portfolio into cash, thereby losing all future potential for growth.
By bringing the LeverageLine option ot them, you will be opening the eyes of many of your prospects who likely do not even think about a securities portfolio loan as an option. Sending them to our website (set up a link that has your Clickthrough Code attached — or send your already coded Client Presentation to them) will give them full access to all of the features of the program, and also protect you. You are also always free to simply send them to the site or one of the pages (such as www.abnicholas.com/stock-loan) and notify us of the clients name, so we may manually credit them to you.
Use your individually coded client presentation. Or just get on the phone, talk about the program and create you own link to the ABN site with your code affixed. Contact us if you need help with this.
We are hear to help you. Let us know what we can do to assist.