IMAP Believes ASIC ruling will promote development of Managed Accounts
Will substantially reduce the compliance burden for advisers re MDAs
The Institute of Managed Account Providers (IMAP) has welcomed ASIC clarifying its interpretation of the circumstances in which an SMSF trustee can be treated as a wholesale client. The general test which can now apply means that an SMSF trustee is wholesale client if a certificate is available from a qualifying accountant that the trustee has net assets of $2.5m or income of over $250,000 for two years.
In their announcement released on 8 August 2014, ASIC states that its “…revised approach means that … if the person providing the advice determines… the trustee is (personally) a wholesale client based on the general test…” then the adviser can treat the SMSF trustee as a wholesale client.
Toby Potter, Chairman of IMAP said “The general tests include an income test – $250,000 for the past two years- or a net assets test, $2.5m (not including superannuation). Many trustees will meet one of these tests, enabling them to be classified as wholesale clients. They can therefore be offered a wholesale MDA service. ”
“This will substantially reduce the compliance burden for advisers who have previously hesitated about offering MDA’s. The result is likely to be a significant improvement to the quality of portfolio management offered to this type of investor.” said Potter
In September, IMAP and The Fold Legal are holding a Masterclass on the obligations for Responsible Managers of AFSLs with MDA authorisation.
