Netwealth have margin lending arrangements through partnerships with approved lenders, allowing investors to borrow funds to acquire investments held via Wealth Accelerator. This guide covers what is required to open a margin lending account, what margin lenders are approved and what the process is.
Some financial institutions lend you or your client money to fund or partly fund buying investments, including ASX listed securities, managed funds and other approved investment options that may be held through Wealth Accelerator. The lending of funds to acquire investments is commonly referred to as 'margin lending'.
Netwealth do not provide margin lending facilities, but Netwealth do have agreements in place with certain lenders to permit investors who wish to borrow funds to acquire investments to hold those investments through Wealth Accelerator. The terms and conditions for a margin loan are as agreed by you/your client and the lender, but it is usually up to the lender to take some form of security over the investments to be held through Wealth Accelerator.
To read more on margin lending at Netwealth, please refer to the Wrap Service Guide 1A.
What is required to add a margin loan to an account?
To add a Margin Lender to an existing Wealth Accelerator account, Netwealth require a signed letter from the Margin Lender OR a signed 'Australian Standard Transfer Form' (ASTF). The ML will need to be the 'Buyer' and the client will be the 'Seller'.
Which margin lenders are approved by Netwealth?
| ANZ Banking Limited |
| BT/Westpac Margin Lending |
| Colonial Marking Lending (Commbank) |
| NAB Margin Lending |
| St George Margin Lending |
| Leveraged Equities |
| NAB Equities |
How do I set up a new Netwealth account with a margin loan?
The simplest way to get a new Netwealth Wealth Accelerator account with a margin loan applied involves getting the client's application for Netwealth prepared prior to contacting the margin lender. The signed application should be sent to the lender requesting they stamp the application with their approval, record their loan numbers, and sign the document.
Steps in the process:
- Adviser and client prepare the Netwealth application, any applicable identity and verification requirements, as well as any applicable in-specie documents.
- Adviser sends through both the in specie and account application documents through to the margin lender for their verification.
- Margin lender will stamp their verification and outline the required margin loan details before providing their signature/s.
- Margin lender will send the completed documents to Netwealth.
- Netwealth will establish the account as a margin loan account with the relevant details and the transfer can then take place.
Transferring the Assets
Some margin lenders will complete the transfer of assets under their own Limited Power of Attorney (LPOA). If they can’t do this, or if they request that you complete individual ASTFs, we recommend using our in-specie from to save signing lots of different forms (same process as a standard in-specie transfer). Please ensure each asset is listed on Annexure A page/s of the form. By signing the Netwealth Power of Attorney in-specie form, clients will not need to sign the individual ASTFs as we will sign under Power of Attorney (POA) on behalf of the client – the lender will sign the seller section. Please note we will not action any asset transfer request without current unrealised capital gains tax (CGT) history.
The Loan to Value Ratio (LVR)
Depending on the margin lender’s agreement with Netwealth, the LVR’s should be produced by Netwealth in a daily report based on the figures of close of business the previous day. Netwealth receives further information about loan amounts on a weekly basis from the margin lender via a file upload.
Amendments and Redemptions
Any further changes or amendment to the account once established will need to be approved by the margin lender. Any actions that are required on margin loan accounts (e.g. updating regular savings plan, banking details, investments into non-approved assets, withdrawals & monthly withdrawal plans) will require margin lender approval before the changes can be confirmed and actioned by Netwealth. Even if you as the adviser completes one of these requests online, we will have a case created for Netwealth to obtain margin lender’s approval before proceeding.
Majority of the time, unless approved by the margin lender, redemptions are allocated to the margin loan bank account.
External Brokers
Advisers and clients can still trade through an external broker for margin loan accounts, however they will need to either trade an already approved asset to ensure we can settle this on our platform or have us request approval from the margin lender for a specific asset prior to trading.
How do I check my margin lending progress?
You can check any outstanding amount on the Margin Loan by checking your/your client's Portfolio on the web. Navigate to Holdings and under the account the Margin Loan will be represented by the Liabilities amount.
What is required to close a margin lending account?
To close a Margin Lending account, Netwealth require signed instructions from the ML. To close the account, Netwealth require signed instructions for a WRAP withdrawal/WRAP closure to be processed.
Can I have a Margin Lending account with a Super Product?
Unfortunately Netwealth do not allow Margin Lending accounts within the Super Product.
How do you release an account from a margin lender? Do I retain the account or am I given a new account number?
To remove the ML from the Netwealth account, Netwealth require signed instructions from the ML to confirm the ML can be removed from the WRAP account. The client will retain the account and no details will be changed. We will simply remove the ML's details from the account.
Can I transfer the account to another margin lender on file?
In order to transfer from one ML to another, Netwealth require a signed Australian Standard Transfer Form (ASTF). The releasing ML will need to be the 'Seller' and the new ML will be the 'Buyer'.
Can I update my personal details online or does the margin lender have to sign the change of details form?
Yes you can update your/your client's personal details on a Netwealth account without ML approval.
What sort of access do I/my client have online with a margin lending account?
You/your client can have browse or transact access, however, you/your client will be prompted for ML approval for certain tasks (for example, investing into non-approved ML assets, updating Regular Savings Plan or processing a withdrawal).