Are MDAs a product or a form of advice?
Managed accounts should be viewed as a way of implementing advice rather than an investment in their own right, according to the Institute of Managed Account Professionals.
In a submission filed with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, IMAP has argued that managed accounts should be exempt from any prohibition on product manufacturers providing financial advice.
It said it did not support restricting the rights of an appropriately authorised licensee to provide personal financial advice to retail clients in respect of managed accounts with which it, or a related entity might be associated.
The IMAP submission said this was because the advantages of managed accounts represented a material benefit to the clients and because “managed accounts should be viewed as a way of implementing advice rather than an investment in their own right, even though the law considers a managed account as a separate financial product from the underlying investments”.
“To the extent that structural separation is mandated, managed accounts should be exempt because of the benefits they provide clients in the implementation of the advice received,” the submission said.
Recommended for you
Proposed legislative changes to safe harbour duty could result in advisers having reduced professional indemnity costs, a joint submission by seven major licensees said.
With 66 per cent of newly established advice licensees being sole advisers, what are the risks and legal ramifications to consider when taking the plunge into self-licensing?
Despite its popularity, only 1 per cent of financial advisers say they have often discussed cryptocurrency with clients, CoreData said, fuelled by concerns of heavy legal expenses if the product goes wrong.
AFCA and the CSLR have signed a memorandum of understanding as to how they will support an efficient financial services sector via the scheme.