Conference 2012: 7IM to offer margin lending against client portfolios

Seven Investment Management (7IM) is set to allow margin lending against portfolios on its wrap in a bid to help advisers compete against private banks.

The move will allow clients to borrow money from BNY Mellon against portfolios on its wrap from April this year.

7IM chief executive Tom Sheridan (pictured) said clients would be able to borrow up to 65% of the value of their portfolio before they faced margin calls.

Sheridan said: ‘Margin lending will enable you to compete with the private banks because they take away lending capabilities if you move assets away from them.’

The ability to offer margin lending would distinguish 7IM from the rest of the wrap market, according to David Crozier, managing director of County Down-based Navigator Financial Planning.

‘It is a fantastic financial planning tool. If you have a client with a £1 million portfolio and he wants to give money to his kids, he can’t do that without incurring capital gains

tax liabilities but he can borrow £200,000 [through margin lending] and put it into a trust for them,’ said Crozier.