More financial planners are using managed accounts in their practices and they are putting more of their clients’ funds into them.
Investments Trends reports that 35 per cent of planners used managed accounts last year, up from 30 per cent the previous years. Among independent financial advisers, the proportion rose from 37 per cent in 2017 to 47 per cent last year.
Investment Trends chief executive Michael Blomfield says the move out of tied planner networks is picking up pace. One of the consequences of that change is that independent planners are more likely to use managed accounts.
Blomfield says: “We are seeing this trend because managed accounts save costs, they improve transparency, they drive up client interaction, they reduce risk and they make the compliance burden easier.”
Forty-four of respondents to an Investments Trends survey said client engagement increased when they implemented managed accounts, 36 per cent said their businesses were more profitable and 31 per cent said they were able to increase the number of active clients they serviced.
State Street’s head of SPDR ETFs, Australian and Singapore, Meaghan Victor, says” “There are many more planners who are interested in the solution.” The Investment Trends survey was commissioned by State Street.
Forty-nine percent of planners using managed accounts reported a reduction in time spent on administration and compliance.
“Compliance continues to play a central role in planners’ choice of managed account structure. The changes currently experienced by the industry, including regulatory changes, support the widespread adoption of separately managed accounts,” Victor says.