Expert hopeful ASIC understands MDA benefits

The future of managed discretionary accounts and the role of ASIC in shaping that future emerged as a point of discussion during a panel session at Financial Standard's recent Managed Account Forum.

Asking Philo Capital Advisers chief executive Brett Sanders about the future of MDAs, panel moderator and BT Open head of distribution Christopher Mather noted that while MDAs were a "very flexible structure" their future was uncertain given recent regulatory attention.

In response, Sanders pointed out he couldn't speak for ASIC, and advised the managed accounts sector to sit tight while the corporate regulator compiled a discussion paper based on the questionnaire which hit the desks of MDA players in October last year, as revealed by Financial Standard.

"I'd say just wait and see," he said.

"The history with MDA goes back to sort of the early 2000s or so. There was that major review that was done in the couple of years leading up to 2016, where we got a new legislative instrument. ASIC had very extensive industry consultation that time around.

"And then more recently, they've been doing a questionnaire process around MDA, to understand what's been going on out there in the market."

Sanders added he was hopeful the flexibility afforded by MDAs - as opposed to SMAs - was a benefit ASIC understood.

"What we do know is that MDAs sort of offer a degree of flexibility in meeting a need that the SMA structure doesn't, and I'm presuming ASIC can see the benefit of that to consumers," Sanders said.

"And, you know, there's no reason to believe that will change."

Read more: MDAASICBrett SandersBT OpenChristopher MatherFinancial Standard Managed Account ForumPhilo Capital Advisers
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