Using a margin account

One way to supplement your portfolio management & financial planning needs

For certain investors, a margin account may be a convenient way to access short-term funding1 for investment purposes while meeting broader financial planning and liquidity needs. It allows you to borrow against the value of securities you already own as collateral. With any sophisticated or complex investment product or strategy, there can be some distinct or significant benefits; but there are also a number of important considerations to ensure you understand and can tolerate the unique risks, including those related to interest rates and the market environment.

Richardson Wealth’s margin account service: Features & benefits

  • Richardson Wealth’s margin interest rates are competitive, including debit rates as low as Prime for larger margin loans.
  • Most approvals are processed within minutes for existing margin accounts (within defined limits).
  • There is no additional cost to you for opening a margin account, and no debit interest charged if the margin facility is not being used.
  • No periodic payments (including interest charges) need to be made as long as the account remains fully margined.
  • Excluding market risks, your assets are safe in that fully-paid-for securities held in margin accounts are segregated in line with regulatory requirements.

Is it suitable for you?

Risk tolerance is one of the key determinants of whether a margin account may be suitable for you2. For that reason, this type of leverage may be less suitable for investors who are nearing retirement and who may not have additional cash on hand to cover potential losses and margin calls. But margin accounts can be an effective cash flow-planning tool for certain investors with diversified taxable accounts depending on the interest rate environment and existing market cycle. With the support of your Advisor, you should also consider details such as whether the margin account has the appropriate portfolio risk parameters and a suitable duration.

Consider the timing

Margin interest rates are typically lower than credit cards and unsecured personal loans. Richardson Wealth’s margin interest rates are competitive, including debit rates as low as Prime for larger margin loans. But the rate environment should also be weighed against the market environment and the degree of risk.

Uses for a margin account

A margin account and associated leveraged investment strategy conducted with the advice of your investment advisor may be useful for facilitating your broader financial planning and liquidity needs.

Potential tax advantages

There may be a tax advantage to using a margin account. If the funds are used to generate investment income, interest may be tax deductible. We strongly recommend that you speak to your own personal Tax Professional regarding your personal situation.


To be successful, you should carefully weigh the potential risks and rewards in line your investment goals as well as your financial situation.

Contact your Investment Advisor to discuss how a margin account can provide you with a competitive and flexible approach to meeting your personal or investing needs.

1Short term funding is generally defined as a duration of less than 1 year.
2Margin is not suitable for every client and is dependent on an individual’s risk tolerance and individual circumstances. Please note it is prohibited to open a Margin account using leveraged assets.


Margin accounts can be very risky and they are not appropriate for everyone. Trading on margin may be suitable for more experienced  sophisticated investors with higher risk tolerance. Before opening a margin account, you should carefully review the terms governing the margin account. It is important that you fully understand the risks involved in using margin. These risks include (i) you can lose more money than you deposit in the margin account; (ii) you are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call; (iii) Richardson Wealth can force the sale of securities or other assets in your account(s) to cover the margin deficiency; (iv) Richardson Wealth can increase its “house” maintenance margin requirements at any time and is not required to provide you advance notice; (v) Richardson Wealth can sell some or all of your securities or other assets without contacting you to meet a margin call; (vi) you are not entitled to an extension of time on a margin call. For more information on Canadian regulatory margin requirements, visit the Investment Industry Regulatory Organization of Canada (IIROC) website at

The material provided herein is intended for informational purposes only and is not intended to constitute investment, financial, legal or tax advice. This material does not take into account your particular situation and is not intended as a recommendation to open a margin account. It is for general purposes only and you should seek advice regarding your circumstance from your investment advisor, personal tax and/or legal advisors. Richardson Wealth Limited is not liable for any errors or omissions contained in this material, or for any loss or damage arising from any use or reliance on it.

Richardson Wealth Limited, Member Canadian Investor Protection Fund.

Richardson Wealth is a registered trademark of James Richardson & Sons, Limited used under license.