The margin loan is a credit line using traded securities as collateral: blue-chips stocks; bonds; mutual funds; precious metals; deposit accounts and life insurance policies. This allows the investor to obtain cash quickly, with light procedures, an open end period and a low rate. All these features make the margin loan a good wealth management tool.

A margin loan can be obtained in France, Luxembourg and Switzerland through our company. Are defined as securities: blue-chips stocks; bonds; mutual funds; precious metals and life insurance policies. The margin loan on life insurance depends on its issuing jurisdiction. Are not eligible the derivative products like the structured products and the shares of private companies that are not traded in a major stock exchange.

The beneficial owner of the securities receives a credit line as a percentage of value held on deposit, which represents the risk of each class of asset. The investor retains the ownership of the securities that are managed by the lending bank according to the deposit agreement. The use of the loan is free: financial need for short term; investment opportunity; real estate down payment and early repayment of debt. This is one the great advantage of this kind of loan.

Margins of loans: blue-chips stocks: 30 to 40% of value; bonds: 65 to 80%; gold: 65%; mutual funds: 50 to 70%; deposit accounts: 80 to 90%; life insurance policies: 70 to 85%. The wealth portfolio is evaluated by the bank for the securities pledged as collateral. All other assets are not accepted for a margin loan but solutions do exist, like the credit line for art assets from a EUR2 million.

The alternatives: margin loan is for traded securities only. Other assets could be pledged for loan or credit line negotiation, such as artwork and real estate. Artwork, fine art collections and jewelry could be used from a value of EUR2 million and up to EUR80 million. This will include famous paintings that show high values. A loan or a credit line will be for 50% of the estimated value. Maximum period is 20 years. Real estate with no or low debt could apply for equity release up to 50% of the value of the property, from EUR300, 000 or higher.

Margin loans are a useful tool for the high net worth investor. Instead to sell assets to fulfil financial needs, a margin loan provides low cost and fast processing money. Applied to wealth management, it allows a leverage with a moderate rate, interest only, while investing in low correlated funds showing a regular yield of 10% per year. With the capitalization issued from the yield, a 200% cumulative yield is available while about 25% is devoted to interest payments. This is an example of the wise use of margin loans.

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