Planners at the hub of margin loan growth
Margin lenders including St George Bank, the Commonwealth and Leveraged Equities see financial planners as a lucrative growth channel for margin loans. The increased distribution of these loans through the planner network provides investors with another alternative as the property market slows, one financial planner said. While consumer groups warn about the downside risks of borrowing to invest, Infochoice says that increased distribution through financial planners may actually benefit consumers because planners are subject to new financial services industry legislation. According to Reserve Bank figures, a record $12.5 billion was tied up in margin loans at the end of 2003, up from $10.8 billion in December 2002.