SMAs offered through platforms to give sector a boost
The managed account market is set to expand with respect to both the numbers of offerings available and the number of providers in the space seeking to access planners and investors via platforms, according to OneVue.
OneVue head of strategic relationships Brett Marsh said that while he expected more managed account providers to enter the market, the greater growth would be in the use of managed accounts offered via platforms.
“We will see more managed account providers, but the question is whether the market will support more. There has been a great deal of innovation in managed accounts recently, and unless new players can move with further developments they will be able to offer bespoke products but miss out on the growing mass market,” Marsh said.
This mass market will come through managed accounts being offered at the platform level, which was unwinding previously-held concerns about managed accounts.
“To access managed accounts directly advisers have needed specific legal structures, licence extensions, administration services and competencies, which are not accessible to the average adviser,” Marsh said.
“Through a platform they get much of this 'for free’ and the end-cost to the client is cheaper - around 55 to 85 basis points for the investment costs - which moves managed accounts into the reach of most planners and their clients.”
Marsh said managed accounts had been a slow-burn product for advisers. However, the shift to platforms had increased their use, which would continue as more self-managed superannuation fund (SMSF) clients seek access to a wider range of investments now being offered via managed accounts.
“We have reports of some advisory groups using managed accounts as the main way of investing client portfolios because they make a reasonable proposition around SMSFs and also at the scaled advice level,” Marsh said.
“Advisers are creating multi-class managed accounts - and by using exchange-traded funds offering equities, property and bonds, they can create a portfolio of securities matched to a risk profile for clients with $30,000 to invest.
“There will continue to be professionally run managed accounts operating as discrete products, but this move to platforms will increase usage by new and existing advisers.”
OneVue has recently expanded its staff to deal with this added demand. It is set to expand its managed account portfolio offerings with two existing clients and will be adding two new clients in the next month.
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