5 reasons
why securities lending became widely adopted by private banks and wealth managers
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The WOW-effect – surprise income for clients
Many private investors are still not aware of the practice of renting out their stocks, bonds and ETFs.
And the value can be significant.
Effortless passive income
By providing a simple opt-in or opt-out to their securities lending program, many wealth managers have made it as straight-forward as possible for clients to start benefiting from this additional source of income.
Aligned with long-term investments
For clients holding stocks, bonds and ETFs for the long-term, securities lending offers an opportunity to make additional returns from existing investments. It’s like investing in real estate. The end goal is to sell at a profit, but in the interim, renting generates extra income.
Unique investment insights
By making their securities available to rent, clients can gain new insights into their investments – discovering when certain securities are in high demand and benefitting from transparency into the other side of the market.
Serves clients’ best interests
Securities lending aligns with wealth managers’ fiduciary duty to act in the best interests of their clients, providing an opportunity to generate additional low-risk revenues while retaining a high level of control and transparency.