Margin Loans at Janney

February 2, 2023
Leverage the power of your investment portfolio for access to funds for the purchase of additional investments and securities or to satisfy short-term financing needs.

What is a Margin Loan?

A margin loan allows you to borrow against the value of securities you already own in your Janney brokerage account to gain access to liquidity for a variety of needs—both investment and non-investment.

Benefits of Margin Loans

Margin loans offer several potential benefits including:

  • Ability to continue investing: You can continue to invest for potential growth and income, and defer any capital gains taxes that might result from selling securities.
  • Accessibility: Once a margin loan is established, you can borrow available funds 24 hours a day, seven days a week. You can access funds from your margin loan by check, debit card, wire or ACH transfer.
  • Flexibility: Clients can borrow up to 50% or more of the market value of many types of securities, including fixed income securities (U.S. government and municipal securities, corporate bonds and agency bonds), U.S. listed common and preferred stocks, unit investment trusts, and U.S. mutual and exchange-traded funds (with some restrictions)1.

Margin Terms

Our margin loan terms are flexible:

  • You can repay loan balances by making a deposit of cash or selling securities.
  • If you wish, dividend and interest payments can automatically reduce your loan balance.
  • Typically, there is no set repayment schedule as long as the required value of investments in your account is maintained. You can choose to pay off the loan balance at any time.
  • Interest payments are not required and are added to your balance monthly. Of course, interest is still owed on the loan until it is fully repaid.

The Janney Margin Lending Agreement provides specific details about our margin lending program. We recommend that you read the agreement carefully to fully understand the program terms.

Risks of Margin Borrowing

Margin borrowing is not ideal for all investors. Margin borrowing risks include the following:

  • You will need to keep your account in line with monthly maintenance requirements. If the value of your investments declines, you may face a margin call.
  • A margin call occurs when your account value falls to a value below that of the required minimum “security collateral value” or maintenance level. You are then required to add additional cash or securities until the value of your investments is brought up to the minimum maintenance level. There is no extension of time on a margin call.
  • If you fail to meet the minimum requirements in your account, Janney may be forced to sell some or all of your securities with or without your approval and can do so without notice to you.
  • If securities are held on margin on the record date for a proxy vote, you will not be entitled to vote by proxy for those securities.

Minimizing Margin Borrowing Risks

There are several ways to minimize the risks of margin borrowing. You can consider:

  • Selecting less volatile securities as margin collateral
  • Borrowing less than the maximum amount permitted against your investments
  • Reviewing your portfolio carefully, especially when markets are volatile
  • Repaying your margin loan and any related interest as quickly as funds are available
  • Diversifying your portfolio to help minimize portfolio fluctuation

Working With Janney

Depending on your financial needs and personal preferences, you may opt to engage in a brokerage relationship, an advisory relationship or a combination of both. Each time you open an account, we will make recommendations on which type of relationship is in your best interest based on the information you provide when you complete or update your client profile.

When you engage in an advisory relationship, you will pay an asset-based fee which encompasses, among other things, a defined investment strategy, ongoing monitoring, and performance reporting. Your Financial Advisor will serve in a fiduciary capacity for your advisory accounts.

For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.

Based on your unique needs, goals, and preferences, we can build a tailored financial plan and make recommendations about solutions that are aligned with your best interest.

Contact us today to discuss how we can put a plan in place to help you reach your financial goals.

1. Eligible securities are subject to change. Some listed and other securities are not eligible for margin.

 

Margin lending is not available for retirement accounts, annuities, UGMA/UTMA accounts, money market funds, CDs, many international securities, certain managed accounts and certain other securities.

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For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.

To learn about the professional background, business practices, and conduct of FINRA member firms or their financial professionals, visit FINRA’s BrokerCheck website: http://brokercheck.finra.org/

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