Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

SMA asset boom prompts calls for fee standardisation

separately-managed-accounts/SMAs/managed-accounts/Adviser-Ratings/

28 February 2025
| By Shy-Ann Arkinstall |
image
image image
expand image

Key advice industry stakeholders have formed a committee to standardise fee reporting for SMAs following an explosion of growth in the asset class over recent years.

The last five years have seen separately managed accounts (SMAs) assets quadruple to $200 billion, with more than 100 active SMA managers now creating portfolios.

In response to this, the financial services industry has launched the SMA Reporting Standard (SMARS), led by the Adviser Ratings Group under a separate entity, with the aim of bringing “unity and clarity” to fee reporting across the sector.

The SMARS framework is designed to standardise RG97 fee reporting and nomenclature for SMAs while also addressing the historical inconsistencies and complexities in fee structures, enabling clearer comparison between products and fostering informed decision making among advisers and consumers.

The standard was developed with six primary goals:

  • Uniform reporting standards: Establishing consistent fee reporting formats across platforms to simplify industry-wide comparisons.
  • Enhanced transparency: Provide clear insights into fee structures, thereby building trust and confidence among consumers and advisers.
  • Streamlined comparisons: Reducing the complexity involved in evaluating SMAs across different responsible entities.
  • Improved trust and confidence: Eliminating confusion around fee discrepancies for identical portfolios.
  • Increased fairness in reporting: Creating a level playing field by standardising reporting methods, thus minimising potential misinterpretations.
  • Efficient integration: Ensuring the standard can be easily adopted by SMA managers with minimal additional data requirements.

Development and oversight of the SMARS will be spearheaded by an independent advisory committee, including Dr Jerry Parwada, Dr Michelle Cull, Tom Reddacliff, Angus Woods, and Nick Topham.

Speaking for the committee, Parwada said: “The rapid growth of the managed accounts sector highlights the need for clear standards and strong collaboration between industry and research. 

“The standard plays a critical role in ensuring transparency, efficiency, and trust in this expanding market. By working closely with industry leaders, we can create a framework that not only supports innovation but also upholds the highest levels of investor confidence.”

According to the group, this initiative has received strong support from across the industry, including SMA managers, investment platforms, and fund managers.

Additionally, 20 foundation partners from across the financial services sector will be playing a key role in supporting uniformity in SMAs by “championing consistent reporting practices and ensuring adoption across the sector”.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

3 weeks ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

4 weeks ago

So we are now underwriting criminal scams?...

7 months ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

3 weeks 2 days ago

WT Financial’s Keith Cullen is eager for its Hubco initiative to see advice firms under its licence trade at multiples which are catching up to those UK and US financial ...

3 weeks 6 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

1 week 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND