Definition (1):
Liquidity services refer to the services financial intermediaries offer to their customers for making it easier for them to perform their transactions.
Definition (2):
“Liquidity Services are provided by financial intermediaries to their ultra high net worth customers to make it easier for them to conduct their transactions.”
It can be a property investment, investing in an IT start-up, purchasing shares in a company, or just purchasing art. The asset here is not always the point of focus. Basically, the main focus is the amount, for how long, and how quickly do you require the credit. Most suppliers of these services, definitely, will need some kind of protection. This protection can be property, company stock, or stock portfolio. Mostly, private banks are searching for you for bringing more capital across into your account, so that they can grow AUM (Assets under Management).
Liquidity services’ four most common examples are as follows:
- Property Mortgage: Clients mortgage the property or properties so that they can buy properties and use credit facilities with their properties as collaterals for convenient flexible terms of payment.
- Foreign Exchange and Margin Trading: These services allow billionaires to invest in the foreign exchange market with leverage by keeping a margin deposit.
- Premium Financing: This service is for clients who want to use life insurance policies as collateral.
- Securities Financing: These services are for the clients who want to use the investment portfolios as collateral.