Perfect environment for SMA growth: BlackRock
Several factors are combining that will rapidly escalate the use of separately managed accounts (SMAs), according to BlackRock’s co-head of customised portfolio service, James Langlands.
Langlands advised that heightened volatility and closure of some funds in the past two years has changed the attitudes of both advisers and investors.
“Future of financial advice reforms will prompt advisers and investors to look for lower cost solutions to either direct individual portfolios or wraps of managed funds,” Langlands said.
According to the recently published research by Investment Trends, advisers are placing more clients in direct shares. The research house expects this trend to increase, suggesting new client investment in direct shares will rise from 14 per cent in 2009 to 26 per cent in 2013.
Langland added SMAs help avoid the issues that advisers encounter when advising on direct share investments, such as compliance risks and work involved in monitoring stocks.
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