MassMutual is letting clients of its brokerage advisors borrow against their portfolios, marking the second banking-style product the Springfield, Mass., insurer has put in the hands of its field force in as many weeks.
MassMutual Wealth Management on Thursday began offering the MassMutual Wealth Management Secured Credit Line. The securities-backed line of credit lets clients pledge eligible taxable investment holdings as collateral instead of selling them to raise cash.
The launch comes seven days after Flourish, the cash management platform MassMutual has owned since 2021, said it would offer its high-yield cash account to the insurer’s network of more than 6,000 financial professionals.
The two launches give MassMutual advisors both a place to hold client cash and a way to lend against client assets, which wirehouses have long used as a way to help keep their relationships with wealthier households sticky.
Under the new partnership unveiled Thursday, Supernova Lending LLC, a non-bank lender licensed at the state level, makes, approves and services every loan. MML Investors Services LLC, the MassMutual subsidiary that operates as MassMutual Wealth Management, acts as a referral partner; Supernova pays it for its role in taking applications and originating loans, but MMLIS makes no underwriting or credit decisions.
Clients can pledge stocks, ETFs, mutual funds, Treasuries, other bonds and cash equivalents held in MMLIS brokerage accounts. though retirement accounts are excluded. The size of the credit line extended to clients will vary depending on the value, type and concentration of the pledged securities.
MassMutual says it charges no application, maintenance or closing fees, and interest accrues only on the amount drawn. The firm said clients could use the line for real estate purchases, bridge financing, tax payments, business expansion and wealth-transfer planning.
Loans won't be available in Mississippi, Nevada, North Dakota or Puerto Rico. The announcement from MassMutual was silent on the actual rates offered, saying only that they compare favorably with many traditional borrowing options.
“We built Secured Credit Line in partnership with Supernova so when a client need or an opportunity arises, the financial professional can remain at the center of the conversation,” said Linda Bestepe, MassMutual’s head of lending and banking services. "It is a capability our financial professionals value, our clients appreciate, and our industry should expect.”
“Having access to credit – and tapping it thoughtfully and intentionally – is becoming an important component when building wealth,” added Vaughn Bowman, head of wealth management at MassMutual. “This new offering demonstrates our continued commitment to helping people grow, protect, and pass on their wealth thoughtfully.”
Last week, Flourish announced an enterprise relationship that lets MassMutual-affiliated advisors offer its Flourish Cash product to clients.
The account pays a rate on held-away cash that Flourish said is currently nine times the national average for savings accounts. It spreads deposits across Flourish’s program banks to provide up to $40 million of FDIC coverage for a two-person household.
“At MassMutual, we’re committed to equipping financial professionals with the tools and support they need to help their clients thrive,” Bowman said at the time. “This is the perfect time to build on our relationship with Flourish by offering Flourish Cash to our advisor network.”
MassMutual's history with Flourish goes back beyond the high-yield savings partnership. MassMutual agreed in December 2020 to acquire cash management platform Flourish from Stone Ridge Holdings Group, without disclosing terms. At the time, Flourish served more than 350 RIAs with more than $600 billion in combined assets, and MassMutual said it would run the fintech independently of its insurance and wealth businesses.
Flourish has since grown to work with more than 1,300 RIA firms that together manage over $2.6 trillion, and it holds more than $8 billion in assets under custody. It has also moved into home lending, a business that grew out of its acquisition of the Sora loan-optimization platform.
Amid that growth, MassMutual relinquished control of Flourish to private investment firm Aquiline, which in September agreed to take a controlling stake. MassMutual will stay on as a significant minority stakeholder and commercial partner under the terms of the deal, which is expected to close in the fourth quarter. At that point, former Fidelity executive David Canter will become Flourish’s executive chairman.
“This new structure preserves our deep, ongoing relationship with MassMutual while providing the agility to accelerate our roadmap and deliver the next generation of products that independent advisors need to succeed,” Flourish Chief Executive Max Lane said at the time.
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