Powered by MOMENTUM MEDIA
subscribe to our newsletter

Managed accounts delivering better efficiencies to advice firms during disruption

Managed accounts delivering better efficiencies to advice firms during disruption
Tony Zhang
28 July 2021 — 1 minute read

Managed accounts are seeing increased take-up with advisers, delivering greater efficiencies to advice firms during disruptive times, according to an investment report.

Research firm Investment Trends has released its annual Managed Accounts Report, and in-depth study of financial planners’ use of managed accounts in Australia.

The 12th annual edition of the report reveals a growing adoption of managed accounts. In the last five years, the proportion of financial planners who recommend managed accounts has doubled from 22 per cent to 44 per cent. 

Advertisement
Advertisement

“Uptake of managed accounts had steadily crept up since 2012, and COVID-19 acted as an accelerant. Managed accounts are fast becoming a mainstream solution for Australian financial advisers,” Irene Guiamatsia, head of research at Investment Trends, said.

Fully two-fifths of advisers now recommend these solutions (44 per cent) and a further 26 per cent are thinking of starting. There are several elements contributing to their rising popularity, with alleviating the compliance burden chief among these.

“Compliance is the top challenge faced by financial advisers in the day-to-day running of their business, with direct implications for profit margins. The ability of managed accounts to alleviate these issues has certainly contributed to their rising adoption,” she added. 

For instance, current users were asked to compare managed accounts to a portfolio of direct shares or managed funds and evaluate their satisfaction with each for its ease in demonstrating client best interest obligations. Almost all users rated managed accounts as “good” or “very good” (91 per cent), well ahead of a portfolio of managed funds (80 per cent) or direct equities (65 per cent).

Further to their ability to assist with compliance and back-office tasks, users also acknowledged how managed accounts enabled them to navigate the challenges brought about by the pandemic last year, according to the report.

Reflecting on their experience of using managed accounts in navigating the market volatility and business disruptions throughout the 2020 lockdowns, users were predominantly positive — the vast majority rated the impact of managed accounts as “good” or “very good” for their transaction execution speed/quality (88 per cent), strengthening their value proposition (83 per cent) and help in achieving better client outcomes (83 per cent) during this difficult period. 

“The positive impact of managed accounts on advisers and their clients during COVID-19 is possibly the most powerful testament to the role they can play as a backbone for advice businesses, big and small,” Ms Guiamatsia said.

Managed accounts delivering better efficiencies to advice firms during disruption
irene guiamatsia smsf
smsfadviser logo

Are you up to date with the legislative changes from 1 July? Contribution cap increases, super guarantees, age increases, SG rate increases. The budget announcement changes. Don’t be caught off guard by your clients’ questions. Prepare for any scenario with the SMSF Foundations course. 21 CPD hours available. Learn more

Arm yourself with the critical information that you need to ensure you and your clients continue to thrive in today’s changing environment at the free-to-stream SMSF Adviser Technical Strategy Day. Live streamed directly to you in October over three days, this event is jam-packed with expert-led sessions to arm you for success by providing the latest updates on regulatory and legislative changes impacting SMSFs. Secure your free spot today, visit www.smsfstrategyday.com.au

join the discussion

Latest poll

Do you have clients that are aged 65 or 66 planning to trigger the bring forward rules?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.