Six out of seven IFAs and wealth managers have clients that have accessed leverage products for long positions or shorted stocks, a survey has found.
Researchers working on behalf of exchange-traded products (ETPs) provider Graniteshares spoke to 100 wealth managers and IFAs. They also found nine in 10 of those taking part (94%) are seeing an increase in interest from clients wanting to short stocks.
Other notable findings include four out of five advisers and wealth managers (83%) said they expect their clients’ use of leveraged single stock ETPs to increase over the next two years.
See also: ‘Generational divide’ between seasoned advisers and newcomers
Two-thirds (66%) of those quizzed favour the use of certificates to leverage on long or short prices, while 31% said ETPs or ETFs are their clients’ preferred wrapper.
The research also found an apparent lack of awareness among some wealth management clients regarding the range of leveraged products that are available to them. Only 54% of those questioned said more than half of their clients are aware that they can take leveraged positions on single stocks using liquid ETPs listed on major exchanges.
Will Rhind, founder and CEO of GraniteShares, said: “Investors are increasingly looking to other means of boosting returns on investments and leverage is rapidly moving up the agenda for clients of IFAs and wealth managers.
“That is underlined by the growing awareness of products such as our leveraged ETPs, the most efficient wrappers to take leveraged exposures in an easy way, and the growing demand we are seeing from sophisticated investors.”
