Two of the industry’s largest licensees suggest the investment trends of 2025 will carry over into the new year as advisers look for opportunities to increase their efficiency without compromising on client needs.
Managed accounts and ETFs were undoubtedly two key trends within the advised investment space last year, both of which were largely driven by advisers’ need for greater efficiency as the demand for advice continues to outstrip the supply.
Speaking with Money Management, Centrepoint chief executive John Shuttleworth said the licensee’s advisers had expressed strong interest in the managed account space last year, noting that these solutions allow advisers to provide a professionally managed product to clients while reducing their administrative burden.
“It’s rebalanced by an investment manager. They don’t have to issue records of advice every time the portfolio has rebalanced, and so it creates real efficiency,” Shuttleworth said.
“For the investor, they know that they’ve got a professional investment manager, like a Morningstar or a Lonsec or an asset consultant, and the portfolio is constantly being rebalanced. You can ensure that you’ve got really good diversification in them, so there’s a lot of benefits.”
According to the Institute of Managed Account Professionals’ (IMAP) biannual FUM census, produced in conjunction with Milliman, managed accounts saw inflows of $16.7 billion in the six months to 30 June, marking a 24.6 per cent uptick on the same period a year prior.
As this space continues to grow, ASIC has announced its intention to conduct surveillance on advisers and licensees using managed accounts to ensure all compliance obligations are being adequately met.
Initially flagged in its FY2025-26 Corporate Plan, ASIC commissioner Alan Kirkland reiterated the regulator’s prioritisation of managed accounts at an IMAP conference in October, noting the rapid growth of the sector among the advice industry as a key contributing factor.
While noting that there may be some misuse cases that ASIC will need to crack down on, Shuttleworth expects growth in managed accounts to continue.
“ASIC have announced a review because they want to understand the sector. I think they’ll look very much at; are there areas where there’s conflicts and people earning a margin or charging more than they should?
“But by and large, when they look at the underlying benefits to investors and why managed accounts are working, they’re a net positive for the industry just because of the professional investment management, the diversification and everything that comes with that.”
When it comes to ETFs, Morgans director of wealth management, Marcia Senn, said they have seen “massive growth” in that space, particularly as the intergeneration wealth transfer begins to ramp up, suggesting that younger investors are showing significant interest in these products.
Looking ahead, Morgans director of equities, Josephine Little said the licensee will continue to prioritise ETFs into their equity strategies, particularly as geopolitical decision are likely to have an impact on global markets.
“As an overall business, we certainly maintain a risk-on approach from an asset allocation perspective. We’re kind of overweight tilts to global equities and real assets and really continue to favour risk assets that are supported by this rapid uptake of AI innovation,” Little said.
“Thinking about the US being one of the only central banks to probably be cutting rates next year, versus Australia potentially going to hike. So, that a really interesting dynamic.”
With AT1 bank hybrids also approach their phase out deadline, Morgans is taking a targeted approach to its domestic tilts, focusing on small and big cap equity and cyclicals while being very careful around bank exposure, adding that credit quality is “becoming an issue”.
