Follow the money to the margin lending scandal [Margin Loans]

Follow the money to the margin lending scandal

The scandal that is margin lending for shares is starkly exposed when we take the advice given by Watergate’s ‘Deepthroat’ to “follow the money to find the guilty parties”.

In the margin lending business, following the money reveals a steady diet of concealments, biases and downright lies fed to both planners and investors. This probably explains why so many feel misled and bitter about margin lending because, for the most part, margin loan product providers pay for – and own – the information that investors rely on to make decisions. It is akin to a sheep accepting the wolf’s assurances that he will be safe in its company.

We know this from experience because we have danced with the devil that is margin lending and yes, we cashed his cheques. But the dance finished early (as did the cheques!) because, as tellers of truths, we quickly began to tread on our clients’ toes.

The challenge for planners is to disclose the risks in a service or product in a manner that investors can understand, which allows them to give their properly informed commitment. The planning process must enable the planner to share the decision making with the client.

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Margin Loans Follow the money to the margin lending scandal

Simon Hampel Founder Staff Member

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Margin Loans Follow the money to the margin lending scandal

Simon Hampel Founder Staff Member

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