AFS works with AIOFP on MDA
Australian Financial Services (AFS) will launch a private label Managed Discretionary Account (MDA) next month which it says is aimed at driving down costs and increasing control over their business in preparation for the Future of Financial Advice (FOFA) reforms.
AFS is working with the Association of Independently Owned Financial Planners (AIOFP) on the launch of the MDA and will offer it to AIOFP members, AFS managing director Peter Daly said.
The group is using Investment Administration Services as the administrator and licensee to allow AIOFP members to use an independent license, while OneVue will be offered to AFS advisers, Daly said.
AFS will also negotiate institutional pricing to drive down costs, Daly said.
A number of dealer groups were moving to private labels in response to FOFA, showing that the future of the industry was in private labels, he said.
AFS is working with an asset consultant, Ibbotson Associates, to sign-off on the portfolios and corporate governance, according to AFS head of strategic development Meaghan Unsworth.
"The key is to ensure that we have flexibility and control and risk management given the current environment. But we know that advisers are moving this way anyway; their clients are looking for greater transparency and beneficial ownership of stocks as well," Unsworth said.
Advisers who want to increase their portfolio construction within the MDA will need to have a certain level of accreditation and knowledge, according to Unsworth. The accreditation process will be centred around products, and will also involve a knowledge of how the MDA structure works.
AFS already has a private label self-managed super fund solution.
AUTHOR
Benjamin Levy
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