COVID-19 accelerates managed accounts take up
Managed account recommendations from financial advisers have doubled to 44% over the last five years thanks to the product’s ability to alleviate compliance burdens, according to Investment Trends.
The research house’s latest managed accounts report found that a further 26% of advisers were thinking of recommending managed accounts, and that the COVID-19 pandemic had accelerated adoption.
Investment Trends’ head of research, Irene Guiamatsia, said: “Compliance is the top challenge faced by financial advisers in the day-to-day running of their business, with direct implications for profit margins. The ability of managed accounts to alleviate these issues has certainly contributed to their rising adoption”.
The survey of 905 financial planners at the start of 2021 also found that 91% of respondents rated managed accounts as ‘good’ or ‘very good’, ahead of managed fund portfolios at 80% and direct equities at 65%.
Respondents also rated managed accounts as ‘good’ or ‘very good’ for its transaction execution speed/quality (88%), strengthening their value proposition (83%) and help in achieving better client outcomes (83%) during this difficult (COVID-19) period.
“The positive impact of managed accounts on advisers and their clients during COVID-19 is possibly the most powerful testament to the role they can play as a backbone for advice businesses big and small,” Guiamatsia said.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
