SMA usage climbs
Thursday, 30 April 2015 12:45pm

One in five (20%) financial advisers are now using separately managed accounts for investors, according to research by JBWere and Investment Trends.

This is the highest level of usage recorded, indicating both the growing client preference for the transparency of investing in direct equities and also the relative simplicity afforded by doing so within the SMA structure.

The report, based on a survey of over 650 advisers, also suggested that a further 23% of advisers intend to use SMAs in the future.

SMAs were perceived as being particularly useful within self-managed super funds, with 51% of respondents using SMAs arguing SMAs were preferable to direct equity investing within an SMSF. This can likely be attributed to the lower administration burden associated with SMAs (46% of advisers using SMAs cited this).

"A growing number of clients are seeking the transparency of investing directly in shares, so for advisers this means monitoring individual stock activity and issuing statements of advice for multiple clients on a daily basis, all of which is not scalable as the business grows," said JBWere executive director and manager of financial intermediaries Andrew Tracy.

"SMAs provide an efficient solution for advisers with these types of clients, allowing them to outsource the day-to-day management aspects of maintaining an equity portfolio while maintaining the transparency and simplicity that clients value in direct share investments," he added.

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