The Rise of Managed Accounts in Australia: A Game Changer for Financial Advisers
Managed accounts are rapidly gaining traction in the Australian financial advisory landscape. By 2025, nearly 60% of Australian advisers are projected to utilize managed accounts, with expectations for this figure to escalate to 75% within the next year. This growth underscores a pivotal shift in how advisers are enhancing service delivery and client engagement.
Understanding Managed Accounts
What are Managed Accounts?
Managed accounts allow financial advisers to hold client funds across a diversified range of assets, including stocks, bonds, and cash. Typically structured as separately managed accounts (SMAs), they empower advisers to outsource the complexities of portfolio creation, freeing them to focus on delivering strategic advice.
The Efficiency Advantage
One of the most significant advantages of managed accounts is their ability to save time. This efficiency not only streamlines operations but also enables advisers to allocate more time for valuable face-to-face interactions with clients. As Kathleen Gallagher, Head of ETF Model Portfolio Solutions at State Street, noted, the benefits extend beyond mere time savings.
Enhanced Asset Allocation Solutions
The Power of Full Asset Allocation
According to Gallagher’s insights shared during an ifa webcast, managed accounts provide advisers with comprehensive asset allocation solutions. This means that instead of struggling to select investments themselves, advisers can rely on experts who specialize in this area. Matt Walsh, General Manager Distribution at Praemium, echoed this sentiment, highlighting that outsourcing often leads to superior investment outcomes.
Building Stronger Client Relationships
The relationship between advisers and clients is becoming more collaborative. Managed accounts allow advisers to position themselves as guides rather than portfolio managers. Hugh Robertson, CEO of Centaur Financial, emphasized this shift towards goals-based advice, stating that the focus is no longer transactional. This evolution reaffirms the advisory role of financial professionals, allowing them to prioritize client goals and aspirations.
What to Do with Extra Time
Strengthening Client Connections
The time gained from utilizing managed accounts can be strategically invested. Gallagher pointed out that this additional time typically goes into enhancing client relationships, strategic planning for the practice, and business development—integral components for acquiring new clients.
Communicating the Value of Managed Accounts
With modelling and analytics provided by managed account portfolios, advisers can articulate the advantages of this strategy to clients more effectively. This enhanced communication can inspire confidence and foster long-term relationships. Walsh emphasized that a staggering 88% of advisers report positive client outcomes associated with managed accounts.
A Question of Investment Expertise
For advisers torn between managing investments and overseeing their practice, Walsh posed a pertinent question: “Can I do a better job at picking investments than an expert who specializes in this field?” This question encourages financial advisers to assess the value of their time and expertise in the context of managed account strategies.
Conclusion: The Future of Financial Advice
The increasing adoption of managed accounts in Australia represents a significant transformation in the financial advisory sector. By leveraging these solutions, advisers can enhance efficiency, improve investment outcomes, and strengthen client relationships. As we progress further into this evolution of advice, the focus remains on meaningful interactions and achieving client goals.
Embracing managed accounts may very well be the key to redefining success in financial advisory services. As this trend continues to evolve, advisers and clients alike stand to benefit from this innovative approach to financial management.
