For professional advisers only. Not to be distributed to or relied upon by retail investors
At P1, we understand the evolving needs of financial advisers and their clients. That is why we have partnered with Firenze to revolutionise the way clients can access cash when they need. This collaboration offers a seamless and efficient solution allowing clients to borrow against their investment portfolios.
What are Lombard Loans?
A Lombard loan is a flexible, interest-only credit facility secured against a client’s investment portfolio. This type of loan offers quick access to funds without the need to liquidate assets, making it an ideal solution for short-term liquidity requirements.
Why choose Lombard Loans
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Flexibility and Speed: Our platform provides loans from £65k to £5m+, secured against a client’s investment portfolio. Clients can draw and repay as needed, with interest-only payments made monthly via direct debit. The automated underwriting and monitoring processes ensure that funds can be accessed within hours.
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Client Retention: By offering Lombard loans, advisers can address clients’ liquidity needs without moving custody or losing control of assets, reducing the risk of asset drain and enhancing overall client satisfaction.
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Retain the Upside: By using a Lombard Loan via the P1 Platform clients still retain ownership of their investments, meaning they still benefit from any income, dividends or potential investment upside of the portfolio.
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Comprehensive Support: We provide extensive support, including training, marketing materials, and ongoing servicing through a branded app powered by Firenze. This ensures a smooth client journey from loan application to ongoing management.
Key features of Lombard Loans
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Available Loans
Access £65k* to £5m+ with a maximum LTV starting at 50% -
Tax Efficiency
Clients will be able to access liquidity without triggering a CGT event or breaking an ISA -
Fee Structure
Transparent arrangement and annual facility, ensuring clarity for clients. -
Interest Rates
Competitive loan rates based on SONIA (similar to LIBOR) -
Flexibility
Clients retain control of their portfolio benefitting from income and any performance gains -
Digital Process
Clients can sign up for loans using just their smartphone, a fully digital experience
Advisor Benefits
Retain Custody of Assets:
No need to move assets away from your management.
Automated Processes:
Streamlined underwriting and monitoring save time and reduce administrative burdens.
Enhanced Client Relationships:
Offer a valuable service that meets short-term financial needs, improving client loyalty and satisfaction.
Understanding Lombard Loans
How long does a loan decision take?
Loan decisions are typically made in less than 24hrs, with the funds being deposited within 72hrs for most cases.
What is the typical interest rate on the loans?
Interest rates range from SONIA* + 1.95% – 3.25%
* (Sterling Overnight Index Average, similar to LIBOR rate minus credit premium element)
What are the fees associated with the loan?
There is an application fee of between 0.25% – 0.50% and a 0.20 – 0.35% renewal fee.
How it Loan To Value (LTV) calculated and what is the maximum I can borrow?
Actual LTV of each asset based on liquidity, volatility, currency and diversification of assets. Loans are secured against the investment portfolios with a maximum of 50% LTV up to 70%.
Do I still retain control of my investment portfolio?
Yes, you retain control in terms of benefiting from any income or potential gains from the portfolio, but you will be barred from making withdrawals from the portfolio.
What wrappers can I use?
Lombard loans are only available against ISAs and GIAs and any sub-pots of these. They are not available against Pensions.
What happens if the value of the investment portfolio decreases?
The loan provider retains the ability to make a Margin Call. If the LTV exceeds 70% early warning will be triggered and delivered through the app. On exceeding 80%, Margin call notice triggered, where market movements do not correct a margin call. At 90% LTV or 14 days non-response to margin call a close out will be triggered – with instructions for immediate sale of assets and move the LTV to below 50%.