Leveraging Both Sides of the Balance Sheet to Help Build Wealth l 2
Introduction
When it comes to building wealth, managing what you
owe can be as important as managing what you own.
Integrated financial technology and the ever-increasing
availability of detailed account data has created an
opportunity to borrow – strategically or tactically - to
accomplish financial goals. When both an advisor and
client have the knowledge and ability to identify when
credit opportunities are appropriate and how to use
leverage wisely, it unlocks options that may allow for
optimal handling of short- and long-term cash flow
needs without sacrificing broader financial goals.
Credit opportunities are in demand. A Spectrum study
completed in 2022 asked clients what they wanted
from their financial advisor – 84% wanted lending
advice/service. However, the study found only 4% were
getting it.
1
Digital platforms are increasingly working
to fill this gap, giving an advisor the flexibility to drive
opportunities with each client and incorporate credit
into a holistic financial plan.
This brief paper will detail when borrowing may be
advantageous compared to liquidating portions of a
portfolio and altering a holistic wealth management
plan. It will also discuss three common lending services
that may be suitable for new and current clients in need
of short- or long-term cash flow. The effective use
of credit, and management of both sides of a client's
balance sheet, will be showcased through case studies
and a review of the content on this topic.
84%
wanted lending
advice/service.
However, the study
found only 4% were
getting it.
1
Spectrum, Market Insights 2022.
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Envestnet, Inc.
