Money Management Account

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13/04/2017
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If you have short-term cash flow requirements it can be inconvenient to raise funds, especially if your major source of liquid assets is a discretionary managed portfolio that you rely on for income, or perhaps face tax implications should you need to encash all or part of it. In these circumstances the Money Management Account could be a solution.

The Money Management Account is provided by Metro Bank, and is structured as an overdraft facility, secured against your eligible, discretionary managed Rowan Dartington portfolio. The Money Management Account provides the functionality of a normal current account, enabling you to spend the funds by normal banking means, including debit card, via the internet, or by telephone banking.

The Money Management Account can help protect your investment strategy when you have a short-term borrowing requirement and when you are expecting funding from other sources to become available in the near future as a means of repayment. For example, you may require a bridging loan for a residential purchase.

There is no set repayment schedule as it is an overdraft facility, and is provided on a one-year renewable term, up to a maximum of two years. Interest is only charged on the amount drawn down and can be paid either monthly or added to the overdraft when sufficient credit is available.

The current interest rate is 2.99% EAR* typical (variable) plus Bank of England base rate. There is an arrangement fee of 0.4%, with a further 0.4% fee if the facility is renewed after the end of the first year. Rowan Dartington will continue to charge in line with your agreed terms for managing the portfolio during the period of the borrowing.

The maximum Loan to Value is 40% of your eligible assets held in Rowan Dartington. To be eligible, the assets must be held within a discretionary managed portfolio, managed by Rowan Dartington’s Central Investment Team, and unwrapped (i.e. not in a pension, offshore bond, or other tax wrapper) and include FTSE 350 equities, gilts and collectives. Full details of eligible assets are available on request. ISA assets are treated at 50% of their value.

Due to the nature of the Money Management Account, the product is restricted to those clients who are able to independently validate their High Net Worth status, and have a portfolio or eligible assets with Rowan Dartington valued in excess of £250,000. The minimum loan amount is £70,000.

For more details about the Money Management Account, please contact your Investment Manager.

Failure to repay the overdraft in agreed timescales will result in enforced encashment of investments.

* EAR stands for Effective Annual Rate and illustrates what the interest rate would be if interest was charged and added to the amount owed once each year. It does not take into account fees and charges.