The shift to managed accounts has accelerated with 70% of planners now using managed accounts or intending to do so.
The extreme market selloffs prompted by COVID-19 demonstrate the wide-ranging benefits of managed accounts.
Planners who use managed accounts believe it is easier to demonstrate client best interest duty through these solutions when compared to managed funds or direct shares.
Key Highlights
A survey of 905 financial planners revealed:
More than 40% (c. 7,000) of financial planners in Australia use managed accounts, an increase of 22% in the last five years.
Prior to COVID-19, financial planners allocated 12% of new client inflows into managed accounts, on average. One year after the global onset of COVID-19, planners allocated 17% of new client inflows, a 42% increase.
Transparency continues to be a key benefit for these structures, with 55% of current managed account users noting the ability for clients to see their underlying shares is a benefit of the managed account structure.
Separately Managed Accounts (SMAs) lead the way, with more than 80% of users saying they implement managed accounts via this structure.
63% of users that implement via SMAs on platform recommend models that are managed by professional external managers.
34% of current users highlight that managed account solutions can be used to provide an effective portfolio core.
72% of financial planners would prefer to implement responsible investing themes via a managed account.
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