J.P. Morgan has sought to remind high net
worth individuals (HNWIs) about the benefits of credit planning, as
according to the bank, borrowing can ensure better asset
diversification.
Establishing a credit line against an
investment portfolio or concentrated stock position can provide
timely financial flexibility, J.P. Morgan said. At the same time
leverage can be adjusted to diversify the portfolio without
disrupting the longer-term investment strategy, the bank
added.
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J.P. Morgan said that, due to the current low
interest rates, now could be a convenient time for HNWs to borrow
money and capitalise on relatively low-cost acquisition
opportunities that are available, taking advantage of the depressed
values that remain for many assets.
“Interest rates are at historic lows and with
some inflation concerns, we see clients holding cash for safety but
with negative real rates of return. Now is an opportune time to
evaluate the role of borrowing in the overall wealth management
plan,” said Peter Flavel, J.P. Morgan Private Bank, Asian HNW
business, CEO.
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