Managed accounts can have a variety of structures, offering different levels of simplicity, customisation and control, so it’s important to choose the best option for your business your clients’ investment needs.
While there are a variety of possible structures, they usually take the form of either Managed Investment Schemes (MIS) operated by a Responsible Entity (RE), or a Managed Discretionary Account (MDA) service.
So, as financial advisers and licensees, it may be more helpful to focus not on structure of the managed account, but rather the best option for your business model and clients.
Getting the right managed account for your business
So how do you decide which option is right for your practice and your clients’ needs? Here are some key considerations:
- Your business model – You need to consider, not only your current business model, but also the next step in your evolution. What direction do you plan to take? What are your key business objectives? Are they greater consistency and efficiency, or a highly bespoke offering, personalised for individual clients?
- The client experience – How can you add the most value to your clients’ experience? Is it by customising individual portfolios, freeing up staff to focus on proactive relationship building, or a combination of the two?
- Target client segments – What are your key client segments and what are their priorities? Do your clients want to be engaged in investment selection or are they happy to rely on professional guidance? How sensitive are they to costs?
- Selective applications or an all-in-one solution – How do you plan to use managed accounts? As an option for selected clients, used in combination with other investments in a tailored portfolio? Or as a whole-of-portfolio solution, potentially extending across your client base?
- Resourcing and capacity – What capacity do you have as a licensee to invest time and expertise in partnering with a product provider to create a customised offering? What cost efficiencies could you introduce across your network?
Colonial First State’s managed account solutions
At Colonial First State, we recognise that different licensees and advisers have individual business needs and requirements. That’s why, rather than developing a one-size-fits-all solution, our approach was to develop a range of managed account offerings.
Colonial First State’s managed account solutions are available across both our FirstChoice and FirstWrap platforms. On FirstChoice, licensees can set up and run portfolios for their super and pension clients, with access to the full FirstChoice menu of over 100 managed funds from leading investment managers.
On FirstWrap, advisers can invest on behalf of their clients in a range of managed account portfolios provided by a number of professional portfolio managers, and hold them alongside other investment options in an account. Work is also underway on a tailored managed account solution, ideally suited to licensees with in-house investment capability looking to take on the role of portfolio manager for their own managed account solution.
To find out more about managed accounts, visit colonialfirststate.com.au/managedaccounts.
