netwealth to launch managed account service by Q3
Thursday, 1 May 2014 12:40pm

netwealth is developing a comprehensive managed account service with plans to launch it in the third quarter of this year.

The service will sit as another investment option within netwealth's approved product list (APL) and it will be available through the group's wrap and superannuation products.

netweatlh executive director Matt Heine said during the group's yearly update that one in two conversations with advisers in the past six months have been around how to use a managed account.

Managing director Michael Heine told Financial Standard that the group was already working on a variety of models from "well-known investment managers and dealer groups."

Heine said that "technology has been the limiting factor until now, but we hope we can address these issues with our platform."

Initially only about 20% of the features that will be available will be required and used by most advisers, with 10-20% of advisers using the more advanced and complex functionality that will be also be available.

According to Heine managed accounts offer efficiencies such as "the ability for clients or advisers to personalise their investments; they include a number of rules and exceptions that can be tailored for individual clients."

For example managed accounts provide the ability to determine a minimum amount to hold in every stock; as well as the possibility to block or keep certain companies, regardless of what the fund manager recommends.

"The beauty of the managed account structure is that it makes the adviser's business very efficient because the client's portfolio can be managed without all the admin in the adviser's office," Heine said.

"We think that it will be beneficial for our existing advisers and that the new service will attract new business to us," he said.

Over time, Heine expects "the managed accounts assets to become a significant part in the netwealth business."

With $5.2 billion in funds under management (FUM), netwealth has become an even bigger player in the market with plans to hit $10 billion FUM in three years through its various businesses.

The latest Investment Trends report ranked netwealth as the second best platform by overall functionality, right after CFS' FirstWrap. The research covered 454 different functionalities across 13 platform providers

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