SMA product available for AFS advisers
Australian Financial Services Group (AFS) has decided to add a separately managed account (SMA) to the range of recommended products its advisers can offer their clients.
AFS Group chief executive Peter Daly said the independent dealer group got the idea to make a SMA available to its advisers after recognising how successful these types of products have been overseas.
“I personally think SMAs are an emerging market. The exciting part is that here in Australia we are able to provide this service at a far, far lower cost and fee structure than what they can offer overseas,” Daly said.
AFS has appointed Merrill Lynch Investment Managers to be the responsible entity for the product after conducting a rigorous tender process that involved five other fund managers.
Daly said AFS chose to partner with Merrill Lynch because of the strength of the manager’s brand, both domestically and worldwide, and its ability to provide an Australia-wide service that was compatible with the dealer group’s own domestic geographical diversity.
“It also came down to Merrill Lynch’s ability to meet out requirements, to tailor [the product] to what we were looking for. I don’t want to provide a solution that somebody else can go and duplicate overnight. Our key is to always seek a point of differentiation,” he added.
The SMA product will offer access to equity investments covering a variety of asset classes including international shares, unlisted securities, and domestic and global fixed interest.
Daly believes it will give clients an opportunity to manage their equity investments in a more tax-efficient and active way, with the advantage of having the direct support of a professional manager.
“The exciting thing about SMAs is that they are no longer just applicable to high-net-worth individuals. Now you can participate in a SMA with perhaps a transaction as low as $20,000, but the clients we’re targeting are those with anywhere between $100,000 and $500,000 to invest,” Daly explained.
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
