Access LOC

Question 1

What is a line of credit?

Answer 1

An amount of credit extended to a borrower

Question 2

Describe two key factors clients consider when opening a line of credit.

Answer 2

1. Rate—The ability to borrow at a preferred rate can lower monthly expenses and leave more money for day-to-day expenses or long-term financial planning.
2. Easy access to funds—The ability to borrow means that clients will not have to sell investments and derail their financial plan when a short-term need for cash arises.

Question 3

Describe what a client is most likely to do when needing to borrow money?

Answer 3

1. Run up a balance on their credit card
2. Call their local bank, for a loan or a line of credit
3. Call their advisor with an urgent request to liquidate their investments to fulfill their need for cash

Question 4

Name two benefits of a Manulife Bank Line of Credit to the client.

Answer 4

1. Cost savings. A line of credit costs clients nothing until it is actually used. And, when it is used, it will almost certainly be at a better interest rate than is available from a credit card or an unsecured bank loan.
2. Convenience. By an advisor setting up a line of credit for their clients now, they won’t have to scramble to find money when the need arises. They can simply write a cheque or use their ABM card to make a withdrawal and they’re done.

Question 5

Name two benefits of a Manulife Bank Line of Credit to the advisor.

Answer 5

1. Client retention. By setting up a line of credit for a client, the advisor will reduce the chance that a competitor will swoop in to meet their client’s future borrowing needs. Plus, the advisor provides value for their client by helping them anticipate their future needs and planning how they’ll meet those needs.
2. Compensation. For every Access Line of Credit the advisor sets up, they’ll get $100 in up-front compensation. For every Access Line of Credit Plus, they’ll earn 20 bps in annual compensation, paid monthly based on the minimum monthly balance.

Question 6

List four ways a line of credit can work for clients.

Answer 6

1. Set up a “rainy day” account
2. Consolidate debt
3. Keep investment plan on track
4. Borrow to invest

Question 7

Name the three lines of credit offered by Manulife Bank.

Answer 7

1. Access Line of Credit
2. Access Line of Credit Plus
3. Insured Retirement Program Line of Credit (IRP)

Question 8

List the main features of the Access Line of Credit.

Answer 8

• Designed for clients who have smaller investments and/or those who need a smaller line of credit
• No margin calls
• Quick underwriting

Question 9

List the main features of the Access Line of Credit Plus.

Answer 9

• Designed for clients who have larger investments and/or those who need a larger line of credit
• Higher loan to security value ratios mean that clients can access a greater percentage of the value of their investment.

Question 10

Describe the main features of the Insured Retirement Program Line of Credit.

Answer 10

• Gives permanent life insurance clients to access cash from their policy, tax free
• Secured by a client’s Manulife permanent life insurance policy.
• Upon death of the insured, the policy proceeds (less the loan and interest repayment) pass on tax-free to the beneficiary.
• Loan amount up to 75% of the current cash surrender value (CSV) of the assigned life insurance policy (50% for non-residents)
• Loan amount up to 90% of the current cash surrender value of the assigned life insurance policy for Performax and Performax Gold policies (not available for non-residents).