Understanding undermines MDA take-up
The take-up of managed discretionary accounts (MDAs) in Australia has not been great due to a lack of consensus and understanding, according to Institute of Managed Account Providers (IMAP) chairman Toby Potter.
Potter has told a Sydney seminar that one of the core problems confronting the use of MDA was that there was currently no industry-wide understanding of what an MDA is and the different types of discretionary accounts that are available.
As well, he said dealer groups were struggling to evaluate the potential value of MDA for the business and how to implement them.
Potter claimed compliance issues were also a challenge for many Australian Financial Services Licence (AFSL) holders.
“We are seeing increased interest in using MDAs in Australia as a main response to the challenges of Future of Finance Advice [FOFA], he said. “For most dealers, implementing an MDA service is really only constrained by the education of AFSLs and their compliance staff in running systems that facilitate them.”
Potter claimed that the adoption of MDAs did not represent a move away from managed funds but, rather, the introduction of a product that investors and self-managed superannuation fund trustees wanted.
“Advisers want to be able to deliver their services in an efficient, compliant way and these new-style investors are suited to MDAs because they want control and they want to own their own assets and shares,” he said.
AUTHOR
Mike Taylor
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
