Fact fiction liquidating loan self Enebur xxx com

Posted by / 15-Feb-2020 10:57

Fact fiction liquidating loan self

These programs may be marketed by financial planners, investment advisers, insurance agents, accountants, attorneys and others—as well as by representatives of traditional broker-dealers.In some instances, financial professionals and others offer the program as a way for their customers to raise cash to buy other financial products the professionals sell—such as annuities or other financial products that might or might not be securities—without requiring the customer to sell his or her existing stocks.FINRA is issuing this Alert to educate investors about non-recourse stock-based loan programs, including risks and rewards and key questions to ask.Stock-based loan programs allow investors to pledge fully-paid stock as collateral for “non-recourse” loans from third-party lenders, who are generally unregistered and unregulated.With a non-recourse loan, the lender’s only remedy in the event of a default is to collect the stock pledged as collateral, even if its value has dropped.Some pitches for these programs promise that you can tap the value of your portfolio for any purpose without incurring the tax consequences of a sale.

For example, in exchange for paying a lower interest rate, a customer might agree to limit any gains to 50 percent above the value of the stock at the time of the loan.The lender cannot require the borrower to pledge additional securities or otherwise pay back the full amount of the loan.From time to time, brokers and other financial professionals have presented investors with a purportedly low-risk opportunity to “borrow” against their stock portfolios through a non-recourse stock-based loan program.To illustrate, suppose a customer owns stock in XYZ Corp.worth 0,000, paying a 2 percent annual dividend.

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As with any strategy promising high upside potential with little risk, these programs can involve costs and dangers that investors should know about.

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