HOME | PHONE: 631-414-4020
    Individual Advanced Planning
    Asset Protection and Preservation

    We provide a wide array of quality insurance alternatives for your family and your business. Read More >>

    Longevity Insurance

    When it comes to long-term planning, certain investments let you save on a tax-deferred basis. Read More >>

    Life Insurance

    Your life insurance needs will depend on a number of factors, including the size of your family, the nature of your financial obligations, your career stage and your goals. Read More >>

    Long-Term Care Insurance (LTCI)

    The risk of contracting a chronic debilitating illness is considered by many to be one type of risk best passed on to an insurance company through the purchase of a LTCI policy. Read More >>

    Personal Financial Management

    Marcum's Personal Financial Management group is focused on your total financial wellness. Read More >>

    Wealth Management

    Your life insurance needs will depend on a number of factors, including the size of your family, the nature of your financial obligations, your career stage and your goals. Read More >>

    Wealth Enhancement

    Estate planning is a process designed to help you manage and preserve your assets while you are alive, and to conserve and control their distribution after your death according to your goals and objectives. Read More >>

    Corporate Benefits Group
    Employee Benefit Plans

    Marcum Financial Services Corporate Benefits Group offers innovative and comprehensive employee benefit services for mid- and large businesses. Our advantage lies in proactive ideas, accessibility, flexibility and, most of all, personal service.

    Health and Welfare Services

    Marcum Financial Services Corporate Benefits Group offers a range of core services as well as fee-based services. Read More >>

    Individual Retirement Planning
    Retirement Income Planning

    The key to a financially independent retirement is proper planning. Planning for retirement is an ongoing process.   Read More >>


Steve Brett, President, Marcum Financial Services, Quoted in Long Island Business News Article, "Securities-based lending on the rise."
By Kristen D’Andrea, Long Island Business News Journalist

When looking for money to improve a home or start a business, borrowers usually consider traditional lending options like home equity or a business line of credit. Most overlook securities-based lending or setting up a margin arrangement to borrow against existing holdings on a brokerage account.

Popular during the tech boom of the late 1990s, when the stock market raged, securities-based lending is now picking up again, as borrowers become more familiar with its advantages, said Aaron Schenkman, a financial adviser at Kuttin-Metis Wealth Management in Melville.

But it’s not spreading as fast as it might – at least, not until the many uses of securities-based lending comes clear, noted Michael Kresh, chief investment officer and managing member of Creative Wealth Management in Islandia.

“People know it’s available,” Kresh said. “But not a lot realize it’s available to use for something other than buying more stock.”

There’s a distinction between margin borrowing and taking out a securities-based line of credit. While a margin loan enables individuals to buy additional securities, a securities-based line of credit is a non-purpose loan that can be used for anything but buying securities.

Possible uses include real estate, construction or business needs; college tuition or paying off student loans; emergency expenses; and major events like a wedding, said Steve Brett, president of Marcum Financial Services in Melville.

Here’s how it works: Effectively, people use their investment portfolio as collateral for a line of credit. While there are myriad industry regulations on how the margin on the account can be used, individuals can generally borrow up to 50 percent of their account, Schenkman said.

One of the main benefits is that securities don’t have to be sold to access the money. Margin rates are very competitive, in the 6 to 7 percent range, Schenkman said. At Kuttin-Metis, if a client borrows more than $100,000, the rate on the loan is negotiable and could go as low as 4 percent in this environment, he added.

As a general rule, the more money borrowed, the lower the interest rate. Individuals with a securities-based line of credit of a couple million dollars can often borrow at a rate lower than 2 percent, according to Bryant Sheftick, a Huntington Station accountant.

“It’s a powerful tool for people who can get it,” Sheftick said.

Other benefits include quick turnaround time. Once a credit check is completed, securities are evaluated and the line of credit may be issued, often in as little as five days, Sheftick said. Additionally, this type of lending offers a more simplified process than traditional lending; it doesn’t incur any legal, set-up or title fees, or any transfer or closing costs, he added.

“It’s an effective way of borrowing money from yourself,” Schenkman said, noting interest charged on a margin loan may also be tax-deductible against interest income because it’s considered interest expense.

Still, there is the risk of borrowing on equity tied to the market.

“If the market goes down, [the brokerage firm] could force you to sell your securities to pay off the loan,” Kresh said.

“It is somewhat risky,” Brett agreed. “But the last couple of years have hidden that because of how the stock markets have performed.”

Additionally, the loan becomes part of the balance sheet of the entity giving the credit, said Sheftick, who cautions borrowers t

While home equity and securities-based lines of credit are similar forms of asset-based lending, choosing which is better is case-specific, depending on an individual’s circumstances, equity in their home and tax bracket, Schenkman said.

Securities-based lending “is a strategy typically used by sophisticated investors with a high tolerance for risk,” he said.

For people who have equity in their homes, Kresh recommends taking out a home equity loan over a margin loan.

“If you have no access to a home equity line because you’re already tapped out, does it pay to have additional debt?” he said. “You have to look at the risk.”

Kresh recommends people only borrow if they are certain the total return will be significantly higher than the cost of borrowing.

“It’s 10 times better than borrowing from your credit card but only one-tenth as good as taking out a home equity loan,” Kresh said.


Check the background of this firm on FINRA's BrokerCheck

Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability.

Marcum Financial Services, An Independent Firm

Securities offered through Raymond James Financial Services, Inc. Member FINRA / SIPC

Investment advisory services at the New Haven, CT office are offered through Raymond James Financial Services Advisors, Inc.

750 3rd Avenue, 11th Floor
New York, NY 10017

10 Melville Park Road
Melville, NY 11747
105 Eisenhower Pkwy, Suite 301
Roseland, NJ 07068

525 Okeechobee Blvd, Suite 750
West Palm Beach, FL 33401
1600 Market Street, 32nd Floor
Philadelphia, PA 19103

555 Long Wharf Drive, 8th Floor
New Haven, CT 06511 
9 Parkway North, Suite 200
Deerfield, IL 60015
1920 Main Street, Suite 950
Irvine, CA 92614
Marcum Benefits Marketplace
Marcum Group
Marcum LLP Marcum Financial Services Marcum Technology Marcum Search Marcum Wealth Management Marcum Search Marcum RBK Irland
© 2018 Raymond James Financial Services, Inc., member FINRA / SIPC | Privacy Notice