Maintain and Grow AUM with securities-based lending

• by secure_financial
• Posted on 13 April, 2021

Great financial advisors have their eyes on the short-term and long-term goals of their clients. They are often building bridges between where clients are today and where they want to be in the future and finding suitable ways to plan for life’s milestones and unexpected events.

One of the smartest ways to maintain that connection between short-term and long-term goals and stay prepared for life’s journey is to have strategic options in place beforehand. Securities-Based Lines of Credit (SBLOCs) provide advisors with a strategic tool to help manage and grow their AUM while providing clients with a low-cost liquidity solution that allows them to meet expected and unexpected liquidity needs while moving ahead with the investment plans you’ve mapped out.

As an alternative to liquidating investments to meet expected and unexpected liquidity needs, SBLOCs keep assets working, maintain AUM, and provide clients with access to short- and long-term liquidity without disrupting investment strategy.  In most cases, SBLOCs are a lower cost alternative to borrowing on margin and can help clients satisfy a wide range of financial needs including:

• Bridge loan financing for real estate
• Home renovations
• Paying tax bills
• Luxury purchases
• Business ventures & expansion
• Private equity investments

SBLOCs provide several benefits for clients and advisors including:

CLIENT BENEFITS

• Keep assets working without disrupting investment strategy
• Avoid potential capital gains tax (consult your tax advisor)
• Benefit from low-interest rates
• Cover loan interest with a potential portfolio return
• Unpredictable liquidity needs

FINANCIAL ADVISOR BENEFITS

• Keep the assets invested – continue to earn your management fee
• Provides a tool to help independent advisors compete against bank-affiliated advisors
• Expand your tool kit to provide your client with private investment opportunities while retaining AUM
• Create a holistic wealth management relationship between you and your client

Successful advisors incorporate SBLOCs into their practice by focusing on their high-net-worth clients’ current and potential future liquidity needs making sure they are aware of the benefits SBLOCs can provide. They also educate their business-owner clients on financial asset lending as an alternative to traditional bank options and make sure to cover lending capabilities in conversations with prospects.  They also educate front-line staff on the benefits of SBLOCs so that they can help manage unexpected redemption requests from clients who are trying to manage short- or long-term liquidity needs.

At Secure Asset Management, we have various strategic partners who can assist our advisors with the needs of SBLOCs.  We understand that navigating today’s complicated world of investments and products can be challenging.  We understand that your business must evolve because your clients’ retirement and investing needs are ever-changing.  At Secure Asset Management, we are uniquely positioned to help you grow your business.  Let us start a conversation today on how the Secure Partners line of companies can help you maintain and even grow your assets