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Appetite for margin lending presents opportunities to advisers

Financial advisers may be presented client opportunities through investors wanting guidance before getting involved in margin lending, says Investment Trends.

According to the Investment Trends 2015 Margin Lending Investor Report, some 96,000 investors who are not currently using margin lending are planning to do so in the next 12 months.

"They are excited about margin lending for the diversification benefits offered, but tend to be more concerned about market volatility than current margin lending investors," Investment Trends head of wealth management research, Recep Peker, said.

"This presents an opportunity for both financial planners and stockbrokers, as many of these investors are seeking education and guidance before entering the market," he said.

"Margin lending investors as a group tend to be the most optimistic in their share market outlook, and recent share market falls are seen as investment opportunities for many."

Mr Peker added that for advisers involved with margin lending, "it is important to note" the way in which investors are using margin lending is evolving.

"They are becoming more technical in their approach to margin lending," he said.


"More are recognising the tax benefits of margin lending, seeing it as part of their broader portfolio strategy, and understanding they can use it for assets other than just direct shares."

Investment Trends found, however, that the number of Australians using margin lending has dipped in the past 12 months, with 67,000 active margin lending investors as of September 2015, down 3,000 from 2014.

Despite this drop in numbers, the total outstanding margin debt increased 4 per cent to $12.3 billion over the year ending September 2015, Investment Trends said. 

Appetite for margin lending presents opportunities to advisers
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