Determining the real value of managed accounts

The client engagement and business efficiency benefits of managed accounts have been well documented, but there has been little to demonstrate the measurable benefit to a practice of using them. Praemium has undertaken research in conjunction with advice consultancy practice Business Health to uncover the quantifiable benefits.

Client engagement benefits enhanced under managed accounts.

As an investment solution, managed accounts offer investors many unique benefits; professional portfolio management, transparency across portfolio holdings and pricing information, the ability to customise portfolios, individual tax positions and beneficial ownership.

These investment benefits, whilst an important contributor to helping investors achieve their financial goals, are only part of the value an adviser can provide. To develop a clear value proposition and clearly demonstrate value in the current and future environment, it is important to understand the changing profile of investors, what they value, their expectations and behaviours.

Changing investor dynamics and how managed accounts can help

Smart technology has been one of the biggest drivers of changing consumer behaviour over the last decade. Clients have access to more information than any previous generation in history, they engage with brands over social media, expecting immediate responses and prompt resolution of problems. A digital service is not a bonus service to them it’s an expectation. To attract and retain this growing tech savvy group of clients, an engaging interactive digital solution is imperative.

Managed accounts not only offer a transparent solution with a wide choice of customisable investment options, with the right technology partner they can also deliver detailed, tailored reporting via a digital portal that the investor can access 24/7. This allows advice businesses to offer a compelling digital solution in a cost-effective way, that will service the needs of a new investor base.

But a digital solution is not the only expectation. Clients perceived value from their adviser is the time their adviser spends with them to understand their financial objectives and ensure they are on track to meet their goals.

Our research shows that without the burden of many of the back-office/non client facing activities, advisers using managed accounts will be able to redirect much of this time into building stronger and deeper relationships with their clients.

 

  • 67% of the managed account users reported improved levels of client engagement
  • 47% stated they are able to spend more time spent with their clients.
  • 33% of non-managed account users “interact” with their best clients more than 10 times a year, this jumped to 42% for managed account users.

 

Quantifying the business benefits

Our research shows that advice businesses using managed accounts demonstrate significant increases in revenue per client and adviser, FUM per client and profit per advice business owner, relative to their non-managed account user peers. Contributing factors to this outperformance include significant reductions in administration, improved client engagement, improved client investment outcomes and improved risk controls all of which create more time to spend with clients and growing the business.

  • 24% greater adviser revenue for managed account users
  • 45% more FUM per client for managed account users.

 

On average, advice businesses using managed accounts are growing at a much faster rate and ultimately generating more revenue per adviser and higher overall profitability. Find out all the details by downloading the free research report. www.praemium.com/upgrade

 

Disclaimers

The information enclosed in the document was sourced from research conducted by Business Health during the period 1 January 2019 and 14 August 2019 The material contained in this report represents confidential information and intellectual property residing within Business Health Pty Ltd. It has been provided on the basis that it will not be conveyed to any third party without the prior approval of Business Health Pty Ltd or Praemium Australia Limited. Business Health Pty Ltd makes no representations or warranties as to the validity, relevance or accuracy of the information provided nor of the capability of any report to achieve any purpose resulting from its completion. Business Health Pty Ltd accepts no responsibility whatsoever for any loss or damage suffered by any user of the services of Business Health Pty Ltd. Praemium has not taken into consideration your personal circumstances or financial objectives and nothing in this documents should be construed to be financial product advice.




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