Holistic Advice Includes Strategic Borrowing Advice


When surveyed, most clients will say that they expect their financial advisor to provide credit or lending advice.1 That doesn’t mean that they know what that advice might be or how you could help.

Queue: a big flashing “OPPORTUNITY!” sign for financial professionals. As an advisor, you are uniquely positioned to serve your clients by addressing both sides of their balance sheet. And in doing so, you may both benefit from a stronger relationship.

The credit opportunity and technology solution

A Spectrem study completed in 2022 asked clients what they wanted from their financial advisor. It found that more than 80% wanted lending advice/service. Unfortunately for the clients, the study found only 4% were getting it.1

Historically, it was difficult for many advisors to address lending. They needed access to lenders that they trusted, who offered solutions relevant to their clients. They needed time to do that research and make those connections. And they needed a way to quickly connect a client with the credit solution they needed.

Enter digital technology. Today’s wealth technology gives advisors the flexibility to drive opportunities with each client and to incorporate credit into a holistic financial plan… without having to spend all of their time manually putting the pieces together.

For example, Wealth Solutions, available through Envestnet’s ecosystem, allow you to deliver greater personalization to client portfolios by integrating optional protection and income, credit, healthcare, and estate planning and trust solutions alongside their investments.

We’ve written in the past about how to begin to offer credit support to your clients. Now let’s look at the potential benefits of discussing strategic borrowing with your clients, in particular.

When to bring up strategic borrowing

A properly balanced asset allocation can play a role in helping investors to achieve the growth needed to meet their financial goals. However, there may be times over the course of a client’s life where they need to choose between liquidating one or more investments to access cash and keeping their asset allocation intact. Strategic borrowing can be a complementary solution to managing a client’s investment strategy, where the client may leverage those existing assets without needing to liquidate them. Strategic borrowing may also be a suitable way to support short- or long-term cashflow needs without altering a holistic wealth management plan.

The potential benefits of strategic borrowing

There are some very clear potential advantages of including strategic borrowing in your toolkit:

  • Maintaining a long-term financial strategy
    Thoughtful use of borrowing can help enable a client to capitalize on an opportunity without undermining portfolio principal.
  • Delivering robust client support
    Approaching your clients’ wealth needs from both sides of the balance sheet enables you to provide more holistic, comprehensive advice – meeting their expectations and deepening the advisor/client relationship
  • Cost savings
    Using credit to avoid the sale of securities also enables the client to avoid the transaction costs of sale and potential tax consequences (e.g., long- and short-term capital gains tax)

Lending solutions in a holistic financial plan

As with any strategy you might discuss with your clients, it is critical to have a clear understanding of timelines, risk tolerance, and the overall economic climate. Read our white paper for a deeper dive into exploring strategic borrowing opportunities with your clients.

As part of our commitment to enabling the Intelligent Financial Life™, we continue to expand the wealth solutions available to advisors through the Envestnet ecosystem. These insight-powered, technology-leading exchanges help you address your clients’ entire financial life cycle so they can potentially achieve better long-term outcomes.

Read our quick start guide on how to get started offering credit solutions to your clients. And visit our Wealth Solutions page to learn more about the exchanges that can help you to deliver greater personalization to your clients: https://www.envestnet.com/exchange-partners


  1. Spectrem, Market Insights 2022

The information, analysis, and opinions expressed herein are for general information only. Nothing contained in this document is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Investing carries certain risks and there is no assurance that investing in accordance with the portfolios or strategies mentioned will provide positive performance over any period of time. Investors could lose money if they invest in accordance with the portfolios or strategies discussed herein. Past performance is not indicative of future results.

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