Managed accounts viewed as a safe option for PY candidates

professional year managed accounts education CFS

12 September 2023
| By Laura Dew |
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Managed accounts can be a benefit for advisers in their professional year as they pose a lower compliance burden on firms. 

Speaking at a CFS Edge event in Sydney, Recep Peker, founder of platform research firm SuitabilityHub, said the use of managed accounts on the platform could help younger advisers.

“Managed accounts make advisers more efficient but they are also saying that for advisers who are doing their professional year. It’s a great tool for them to recommend the models the firm likes and helps to keep the operations safer,” he said.

This was echoed by Toby Potter, chair of the Institute of Managed Account Professionals (IMAP), who commented to Money Management: “It makes sense that a new recruit would focus on client-related matters rather than trying to be a fund selector. 

“Managed accounts are selected by a professional portfolio manager in a robust investment selection process which leaves advisers able to get on with the client work.

“The compliance benefits from using managed accounts – notably the confidence that every client is dealt with equitably – would also be a real benefit.”

The latest IMAP census shows funds under management in managed accounts has reached $161 billion.

The CFS Edge platform will make an Accelerate Series available later this year, described as the “next evolution in managed account construction” that will drive down costs.

Bryce Quirk, CFS group executive for distribution, said: “CFS is revolutionising managed accounts by offering advisers and clients access to no percentage-based administration fees and doing away with inefficient and clunky rebates. Client funds are always invested, and cash statements are free of confusing rebate arrangements that otherwise need to be explained to clients,” he said.  

“Through the Accelerate Series, advisers will be able to combine domestic and international equities and over 550 funds in a single account, on a single platform.”

The Edge platform was built in line with adviser feedback throughout the 18-month process, and Peker said there were several factors that were raised during the process.

“One of the biggest things that people want is to be able to operate in their own way; each business has its own unique way of working. They want to partner with technology providers while maximising their capacity to serve, which is very critical in this post-royal commission world. 

“Many advisers are operating in this high-net-worth space but are finding their operating models aren’t cutting it for that segment, so it is about giving them the tools to demonstrate their value.

“It’s critical to integrate with the whole advice ecosystem,” Peker concluded.

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