Banking services to advisors: More than just your conventional loans

By Alain Thériault | April 20 2007 06:37PM

Our very first comparative study on leverage loans to advisors has revealed an unexpected treasure trove of products and services that go beyond simple conventional investment loans.

In addition to regular RRSP loans, the Bank of Montreal also offers Retro-Activator RRSP Loans, which it describes as instalment loans with retroactive payments at a fixed or variable interest rate.

This is suited for clients who want to make bigger investments in their RRSPs to use up accumulated room and therefore need an amortization period over several years to benefit from lower and more affordable monthly repayments. This type of loan also suits borrowers looking for a fixed interest rate. (See Table 1.)

Web services

Financial institutions that cater to advisors have also increased their number of online banking services. (See Table 2.)

For example, many institutions allow both advisors and their clients to submit loan applications directly over the Internet.

B2B Trust pushes the envelope: Their clients can transfer money between accounts and sometimes even from an account at another institution, while advisors can switch, redeem or purchase funds on behalf of their clients using an investment loan. (AT)

Retro-Activator RRSP Loan: BMO

LimitAvailable in amounts of more than $7,500.
Rates offered: Prime

Guaranteed fix rates? Term?

Prime rateFixed rate 1 year: 6% 2-5 years 7.75% (March 31, 2007)

· Variable rates: up to 180 months

· Fixed rates : up to 60 months

Payment options: Capital + interest

Capital only

Capital+ interest 

Partial or full repayment at anytime, without penalty

Fees: Modifications

Repayment at anytime

No fees 

Partial or full repayment at anytime, without penalty

Eligible investments
  • BMO Financial Group RRSPs, including BMO Investments Inc., or self-directed RRSPs from BMO InvestorLine Inc. or BMO Nesbitt Burns Inc.


    Online services offered to advisors and their clients

    B2B Trust
    For clientsSavings Accounts = transfers to/from another Advisor’s Choice accountChequing Accounts = transfers to/from another Advisor’s Choice account or account at another FI, bill payments
    For advisorsRRSP Loans = application submissionInvestment Loans = switches, redemptions and purchases of funds
    For clientsLoan application available online (BMO.COM)
    For advisorsNone
    For clientsOnline account inquiry, account transactions, bill payments.
    For advisorsOnline inquiry - summary of all Manulife Bank products by client. 

    Online RRSP Loan application.

    MRS Trust
    For clientsInvestor access to account
    For advisorsOnline application for RRSP LoansOnline Investment loan reports
    National Bank of Canada
    For clientsYes
    For advisorsYes (POS - WEB platform)

    Alain Thériault