As interest in managed accounts continues to grow, ASIC commissioner Alan Kirkland reasserted the regulator’s intentions to conduct surveillance on advisers and licensees using managed accounts to ensure compliance obligations are being adequately met.
Released in August, ASIC’s FY2025–26 Corporate Plan outlined the regulator’s intention to conduct surveillance on AFS licensees that are recommending and offering managed accounts to retail clients.
“We will consider compliance with the general licensee obligations and advice conduct obligations. Our surveillance will focus on governance frameworks, management of conflicts of interest, and outcomes for consumers,” the report said.
Expounding on this at the Institute of Managed Accounts Professionals (IMAP) conference in Sydney on 15 October, Kirkland said the regulator’s intentional focus on managed accounts has been largely driven by the fast-growing use of managed accounts, particularly in the advice industry.
“It’s clear that managed accounts are playing an ever-increasing role in Australia’s investment landscape. When regulators see shifts like that in market composition and dynamics, we are naturally interested,” he said.
“We are interested in what’s driving those changes, what the impacts are, how different incentives might influence those changes, and most importantly, what they mean for consumers.”
According to IMAP’s biannual FUM census released last month, managed accounts saw net inflows of $16.7 billion in the six months to 30 June, hitting $256.4 billion after advisers reported they had more clients who suited the products.
Kirkland explained that the regulator had not enacted a close assessment of the managed account space for a number of years, but now believed a review was “warranted and timely” given the growth in the space and potential risks it was observing.
Focusing on both licensees’ and advisers’ use of managed accounts, Kirkland said that ASIC will be examining how licensees are managing compliance with their general obligations.
“We’ll examine how financial advisers, when they recommend managed accounts, comply with their obligations to act in the best interests of their clients. And we will be examining what conflicts of interest may be present, and how these conflicts are addressed by advisers and licensees,” Kirkland said.
Noting the attractiveness of managed accounts for licensees at all parts of the manufacturing and distribution value chain, Kirkland said that managing conflicts of interest will be a key focal point during its surveillance.
“We’ll be looking at what conflicts may arise, what challenges they may present, and how they’re being managed,” he added.
“Planning and scoping for that surveillance work is currently underway.”
