Financial Planning
Suitability of managed accounts grows

Managed accounts are becoming more suitable for a broader range of clients, attendees of the 2019 Financial Standard Managed Accounts Best Practice Forum have heard.

Speaking at Financial Standard's Managed Accounts Best Practice Forum in Sydney this morning, Netwealth head of managed investment products James Mantella told the crowd of financial advisers that the growth in managed accounts wasn't only due to their well publicised efficiency benefits.

"Everyone's heard of the efficiency story. Absolutely, that's a key driver. We think efficiency, we think lower administrative burden and we think reduced cost," Mantella said.

"But that's only one side of the story."

According to Mantella, managed accounts are becoming "more and more suitable for a broader range of clients."

Drawing on the findings of Financial Standard's 2019 Managed Account Survey of financial advisers, Mantella noted more than 44% of practices using managed accounts are doing so for close to half of their client base.

"That's really important," Mantella said.

"When we talk about managed accounts, we talk about building scale. To build that scale you need to make your investment proposition applicable to a large proportion of your client base."

Mantella said the reasons for their broader shift were varied, but noted particularly advancements in technology and the increased number of assets which can be handled by managed accounts.

"Historically it was Australian equities, we're now moving into international equities, there's a significant holding in managed funds within managed accounts, ETFs and the list goes on," he said.

"And I fully expect that with continued feedback and use from advisers, platforms and producers will continue to build this capability."

The research also shows there were more than 2270 model portfolios available as at June 2019.

About 4% of respondents to the survey said there are too many model portfolio and ETF choices available, however four times that number said there are far too many managed fund options.

Read more: Financial Standard Managed Accounts Best Practice ForumJames MantellaNetwealth
Link to something lVROsUGm