Separately-managed accounts’ (SMA) centralised reporting function makes them a superior option to managed funds, particularly following the growth of self-managed super funds (SMSF), a wealth adviser believes.
In addition to flexibility, their tax efficient structure often results in better performance after costs, according to Crystal Wealth Partners’ executive director John McIlroy.
His reasoning is that individual investors’ tax position is not compromised by the movements of other investors, which is not the case for managed funds.
McIllroy said this is particularly beneficial for SMSF trustees, who often seek transparency and flexibility.
The obligation of SMAs to divulge portfolio assets through centralised reporting is a key part of this transparency, he said.
And unlike pooled structures, which can expose investors to unrealised gains and losses, the individual nature of SMAs shields investors from the actions of other investors, McIlroy added.
