Master trusts gear up for new era of separate accounts
Someof Australia’s largest master trust providers are preparing to push the envelope of retail managed funds and share market investing with the addition of separately managed accounts (SMAs) to their line up.
The push is being headed by Sealcorp, which has announced it will offer separately managed accounts through its flagship Asgard master trust from August this year.
Asgard is likely to be closely followed by Navigator, which is assessing its options with a view to launching a similar service in the later half of this year.
The AXA owned Summit master trust will also move headlong into the separately managed account field, although its plans are at a slightly more embryonic stage.
The group has assembled a small project team to assess whether to develop separately managed accounts itself, import the capability from its offshore parent, or team up with a software provider to build a suitable product before a launch date early next year.
Other groups, such as the combined MLC/National Australia Bank, will also examine the possibility of offering separately managed accounts through their master trusts.
The growing interest in separately managed accounts is being fuelled by the burgeoning popularity of the products in the United States, where the Forresters research group has predicted that by 2005, 25 per cent of US investors will be using separately managed accounts.
According to Forresters, the sector is already growing by 30 per cent per annum in the US.
The move by Australia’s master trusts into offering this type of product will likely see separately managed accounts become a viable alternative for a much broader cross section of high-net-worth investors.
To this point, separately managed accounts, which are essentially a customised investment portfolio generally managed by an individual portfolio manager, have been offered mostly through banks and broking houses for the benefit of only the very wealthy.
The general manager of marketing and retail products at AXA Australia, Richard Shermon, says master trust providers will leverage off their technology driven platforms to ultimately make separately managed accounts viable for investors with as little as $500,000.
“This is the type of thing that platform providers are good at doing and as the platforms develop, individually managed accounts look like they will be the next trend,” he says.
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