Securities-Based Lending

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1 Securities-Based Lending

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3 Become a Holistic Wealth Manager With LoanAdvance Today, high-net-worth investors have more complex needs than in the past. To remain competitive, you will need to provide more sophisticated solutions to attract and retain clients. Providing lending solutions, as well as traditional investments, can go a long way toward nurturing long-term relationships with clients. Decisions about whether to liquidate assets can have a lasting impact on the overall financial health of your clients. LoanAdvance gives your clients a way to access credit for most personal and business needs without having to sell securities in their account. 1 Benefits to Your Business > Attract new clients and deepen existing relationships. > Retain assets that might otherwise be liquidated or transferred to another institution. > Become aware of and gather more client assets. Who Should Consider LoanAdvance? Suitable clients who > Plan to start or expand a business. > Plan to purchase a new car or boat. > Want to take a family vacation. > Need to pay for a child s education. > Need to pay for elder care or health care. > Want to pledge assets in a personal account to cover business expenses. > Do not trade frequently and plan to hold mutual funds for more than 30 days. > Transform your business into a total wealth management platform. 1 LoanAdvance may not be appropriate for all investors and the risks should be carefully evaluated. If the market value of your client s portfolio depreciates, your client may be required to deposit additional funds or marginable securities into the account. LoanAdvance cannot be used for the purpose of: 1) purchasing or trading securities; 2) meeting margin calls relating to securities purchases; or 3) reducing or retiring indebtedness incurred to purchase, carry or trade securities. Restrictions in some states may affect credit line amount minimums and broker-dealer or investment professional s licensing requirements. In addition, this product may not be available in certain foreign countries, as well as to residents of Mississippi, Nevada, Rhode Island and Vermont. For Professional Use Only. Not for Distribution to the Public. your business without limits 3

4 > Enhance Borrowing Power With LoanAdvance LoanAdvance is a securities-based line-of-credit that can be used for most personal, consumer or business needs. LoanAdvance gives clients the flexibility to borrow up to 70% of the market value of qualified equity, mutual fund and investment-grade corporate or municipal bond securities, as well as up to 90% of the market value of U.S. Treasury securities that they own. Assets in both retail and separately managed accounts can be used for LoanAdvance. Features of LoanAdvance > Competitive interest rates. Rates on LoanAdvance lines-of-credit are often lower than standard bank loans or credit cards. > No established repayment term. As long as adequate collateral is maintained in a LoanAdvance account, there is no required repayment schedule. Your clients may also prepay principal without penalty. 2 > Easy access to a line-of-credit. Your clients only need to sign and submit a LoanAdvance agreement, a Form T-4, Restricted/Control Stock Disclosure and Interest Rate Acknowledgement form, and a LoanAdvance check writing application, if applicable, to apply for a line-of-credit. Once established, funds can be accessed as easily as requesting a check or wire transfer, or using a LoanAdvance checkbook. > No fees. When establishing a LoanAdvance account, your clients are not subject to the application, origination or filing fees typically associated with personal loans, home equity loans or bridge financing. Additionally, with LoanAdvance, there are no prepayment penalties, termination fees or closing costs. > International offering. To extend the reach and value of your lending services, LoanAdvance is available to clients of most states in the U.S., along with some additional countries outside of the U.S. 3 > Access to funds. To provide clients with quick, convenient access to their funds, LoanAdvance has been enhanced with check writing capabilities. This provides an additional avenue to access funds and issue a check request or a Federal Funds wire transfer. Benefits of LoanAdvance > Reduce tax consequences. Your clients can avoid possible tax consequences by using LoanAdvance for personal credit needs instead of liquidating securities from an existing investment portfolio. Best of all, your clients will continue to enjoy the potential for capital appreciation and income. > Leverage managed accounts. When pledging managed accounts for LoanAdvance, your clients do not need to move assets into a separate collateral account. They can continue to maintain their investment and cash management accounts even after they have been pledged as collateral. 2 If a LoanAdvance line-of-credit is paid down to a zero balance at any time after the initial funds are distributed, a new Form T-4 will need to be submitted and approved prior to any additional fund advances. 3 Certain restrictions may apply. Contact Pershing for details. For Professional Use Only. Not for Distribution to the Public. 4 Loanadvance

5 Who Can Benefit From LoanAdvance? Case 1 Name: John Occupation: Insurance Professional > Increase flexibility. LoanAdvance can help your clients grow their business, buy a vacation home or pay for college tuition. > Gather assets. LoanAdvance provides another way to grow your business. Clients who have multiple relationships with a firm are more likely to consolidate assets with that provider. > Retain investments. Clients with immediate cash needs can avoid having to sell securities at an inopportune time. Dedicated Support As you introduce LoanAdvance to your clients, you will have a wealth of resources available to you, including online and in-person training. You will also have a dedicated LoanAdvance team to guide you through the process from start to finish, answering any questions you may have along the way. Client Situation: A client wanted to purchase a new property, but had not sold his current property. LoanAdvance Solution: John suggested financing the down payment using LoanAdvance until the initial property sold. Once he sold the property, he used the proceeds of the sale to pay back the loan. Case 2 Name: Cathy Occupation: Financial Planner Client Situation: A client wanted to consolidate a nonpurpose loan from a competitor. LoanAdvance Solution: The nonpurpose loan, which consisted of a $1 million debit and $2.5 million in assets, was transferred to the client s account custodied at Pershing, resulting in a new client for Cathy. Case 3 Name: Andrew Occupation: Investment Professional Client Situation: A client needed to fund private college tuition for his first child. LoanAdvance Solution: Since the client did not qualify for financial aid, Andrew suggested leveraging the client s portfolio with a LoanAdvance account to generate the necessary funding. For Professional Use Only. Not for Distribution to the Public. your business without limits 5

6 > LoanAdvance for International Transactions LoanAdvance is also available to your clients domiciled in the following countries: > Argentina > Bahamas > Bermuda > Brazil > Cayman Islands > Chile > Costa Rica > Dominican Republic > Malaysia > Mexico > Panama > Paraguay > Peru > Puerto Rico > United Arab Emirates > Uruguay > Venezuela Hacienda Registration Pershing is registered with Hacienda, the Foreign Banks Registry in Mexico, which allows your Mexican clients to take advantage of a more favorable income tax rate on interest paid in Pershing s LoanAdvance program. Emerging Market Sovereign Debt Enhance your clients borrowing capacity by affording them a new pool of assets to leverage as collateral for a nonpurpose loan. Your clients may have the ability to leverage their securities, such as foreign sovereign debt. Back-to-Back Loans Capability Managed account clients can pledge multiple accounts with different registrations as collateral for a loan through LoanAdvance. Mail documents to: Pershing LLC, Corporate Executive Services, 7th Floor, One Pershing Plaza, Jersey City, NJ Fax documents to: (866) Call the LoanAdvance Support Team: (877) and select option for Nonpurpose Loans 2012 Pershing LLC. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation. Member FINRA, NYSE, SIPC. Trademark(s) belong to their respective owners. For professional use only. Not for distribution to the public. 6 Loanadvance

7 Your Business Without Limits Visit pershing.com to learn more about how you can increase your clients borrowing power.

8 About Us Pershing LLC (member FINRA/NYSE/SIPC) is a leading global provider of financial business solutions to more than 1,500 institutional and retail financial organizations and independent registered investment advisors who collectively represent more than five million active investors. Located in 23 offices worldwide, Pershing and its affiliates are committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Pershing is a member of every major U.S. securities exchange and its international affiliates are members of the Deutsche Börse, Irish Stock Exchange, the London Stock Exchange and the Australian Stock Exchange. Pershing LLC is a BNY Mellon company. Additional information is available at pershing.com. PSB-PER-LA-5-12