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Portfolio > Asset Managers

Raymond James Rolls Out High-Net-Worth Credit Line

By Janet Levaux

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Raymond James (RJF) said Tuesday that it had recently introduced a securities-based line of credit for financial advisors to offer high-net-worth clients as an alternative source of liquidity. Within the first month, 72 loans were booked with the product, according to the company.

The program, made available through Raymond James Bank, can be collateralized by multiple Raymond James accounts and can be used for any legal purpose, except the purchase of securities.

“The key benefits are twofold,” said Chet Helck (left), CEO of the Global Private Client Group for Raymond James, in a statement. “The first is flexibility: Assets in multiple Raymond James accounts can be pledged as collateral; the loan can be used for just about any purpose, access to the line of credit is available through wire transfer, automated clearing-house services or personal checks; and repayment options are flexible to suit the borrower.

According to Helck, the credit line’s second benefit is pricing. “Very competitive rates are offered as they are based on the value of assets collateralized, not on the loan amount,” he added.”

In addition, clients can use the liquidity in ways that don’t disrupt their investment strategy, says Katie Clark, senior vice president and product manager at Raymond James Bank.

Some advisors believe the program is right on target. “This program was a life-saver for one of my clients,” said Sandy Russell of Raymond James & Associates in Chattanooga, Tenn., and one of the first advisors to use the program, in a press release. “My client needed $140,000 to pay off her son’s loan at a local bank but did not want to liquidate her assets at that bank.”

Russell arranged for a securities-based line of credit. The client “was so happy with the ease and speed of the transaction that she is now moving those bank-held assets of approximately $700,000, over to Raymond James,” the advisor explains.

Other advisors agree. “This program is a great way to attract high-net-worth clients whose need for liquidity is not being met by other financial institutions,” said Michael Cohen, a Raymond James advisor in the firm’s St. Petersburg branch.

Cohen’s client needed a significant amount cash to purchase a home, and due to his recent change in employment status was not eligible for a conventional mortgage, according to Raymond James.

“In order to get the benefit of a lower rate on his securities based line of credit, he transferred $700,000 from another institution to combine with his existing Raymond James assets and now he has the better rate, the new home and access to additional liquidity when he needs it,” said Cohen, in a press release.

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