Tailor MDAs for every client: adviser
Managed discretionary accounts (MDAs) should be customised for individual clients, both to manage diverse expectations and meet new regulatory guidelines, an adviser says.
Given the complexity of managing the accounts, advisers may need to outsource parts of the process, Crystal Wealth Partners director John McIlroy added.
"You need to think about the different parts. There is an operator who contracts with the client to provide the service, and perhaps also a custodian if assets are held on behalf of clients," he said.
"Then, there is the advisory capacity - who's providing the advice directly to the client - and in some cases there may be a fourth element which is the investment manager element if you were buying in some investment expertise."
He said advisers wishing to look after MDAs should decide early whether they plan to outsource administration, as this will affect the licensing structure.
McIllroy's advice follows the release of an Australian Securities and Investments Commission (ASIC) consultation paper earlier this year that argued for more detailed upfront disclosure from MDA providers.
AUTHOR
Kate Cowling
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