– About –

Margin Lending

A margin loan allows you to borrow money, in addition to your own capital, to invest in shares. This ‘leverage’ allows you to increase your investments more so than if you were solely using your own funds.

The team at iInvest have many years of experience using margin lending products. If you would like to discuss if margin lending is appropriate for you, please contact the iInvest office. Our team can assist you to open a new margin loan or help you manage an existing loan facility.

The team at iInvest Securities use Leveraged Equities as one of their preferred providers of margin lending products.

Leveraged Equities

What is a Margin Loan?

A margin loan allows you to borrow money to invest and use shares or other investments as security for the loan. A margin loan can help increase your investment returns, but it also has the potential to magnify any losses. Margin loans are not suitable for all investors, and you should properly understand how a margin loan works and the associated risks involved before taking out a margin loan.

Who is Margin Lending suitable for?

Margin Lending can be a good investment vehicle for anyone wanting to:

Grow a Portfolio

The perceptive investor sees margin lending as a means of growing their existing portfolio by borrowing against existing assets.

Savvy investor

Sees margin lending as a part of their broader portfolio strategy.

Opportunistic buyer

You have an existing portfolio and see the tax benefit in borrowing to invest further. Dips in the share market are seen as buying opportunities to many.

How can Margin Lending build your wealth?

Margin Lending is a popular investment tool for the following reasons:

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Faster wealth creation

Borrowing money to increase the size of your portfolio can allow you to grow your wealth at a faster rate, and may give you exposure to more dividends.

Diversification

A larger portfolio using borrowed funds can provide greater diversification, lowering the risk that under performance in one sector will effect your returns significantly.

Unlock equity

By borrowing against an existing portfolio, you can invest further without selling your assets and potentially incurring capital gains tax liability.

Tax effectiveness

Depending on your situation, a margin loan may help maximise the after tax return on your investment by allowing you to claim the interest on your loan as a tax deduction, and increase your portfolio’s exposure to fully franked dividends.

Margin Lending | Our services

We offer a number of services related to margin lending which include:

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Standard margin Loan

Based on your client profile, we can assist in your application to any number of margin lenders.

Protected Margin Loan

Based on the suitability of this trading method to you, we combine a margin loan with an option strategy that ‘protects’ the loan.

Benefits & risks

Benefits of Margin Lending

  • Increase the funds available to you to invest
  • Ability to diversify your investments
  • Greater flexibility
  • Increase your capital returns
  • Potential tax benefits
  • You can start small

Risks of Margin Lending

  • Changes in the value of your portfolio
  • Changes to the interest rate charges on the loan
  • Magnifies potential losses
  • Possibility of having to sell part of your investments to meet a margin call
  • Owing more on the loan than your original investments are now worth
  • The lender may lower the LVR for one of your investments, or decide that an investment is no longer on their approved product list
  • The proceeds of your investments may not cover the interest payments on the loan
  • A margin loan is more complex than a traditional loan

For a more in depth understanding about margin lending, please contact us to speak with an iInvest Securities adviser.

Disclaimer

We may receive commission for referring margin lending customers to a particular margin lender. iInvest Securities (or Zodiac Securities) may be entitled to an interest rate rebate of up to 0.25% of the referred customer’s margin loan from the relevant margin lender.

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