BlackRock tips adviser demand for super-based SMAs

The availability of superannuation-based versions of separately managed accounts (SMAs) will drive continued adviser interest in the SMA market, according to BlackRock.

Many investors considering a self-managed super fund (SMSF) may look at a super SMA because it offers direct share investing within superannuation at a time when demand for direct investment is escalating, said BlackRock's co-head of customised portfolio service James Langlands.

 "We believe super SMAs will particularly appeal to investors who want a direct equities portfolio, but may not have the funds to justify establishing an SMSF," Langlands says.

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BlackRock quoted Investment Trends research that found 18 per cent of planners now recommend SMAs to their clients and 20 per cent intend to recommend them in the next 12 months.

The ability to use a SMA both inside and outside super was listed as one of the SMA features most desired by advisers, along with online access and lower fees, BlackRock stated.

BlackRock said its super SMA, which was made widely available last month after a limited release earlier in the year, is able to accept employer contributions. "The investment portfolio and administration are professionally managed with fees that are competitive with pooled funds," Langlands said.

Super SMA investors have their own segregated portfolio of stocks, invested according to model portfolio strategies set by the fund managers of their choice, BlackRock stated.

Superannuation tax is calculated at the individual member level, which BlackRock said is an important advantage over traditional pooled funds. Clients also don't incur the establishment costs of an SMSF and save costs through fewer trades and low brokerage, while streamlined administration, BlackRock stated.

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