Matthew Walker

Market leading investment and superannuation platform HUB24 has added Dynamic Asset Managed Account portfolios to its platform IDPS Choice menu.

A leader in both platforms and managed portfolios, HUB24 provides access to innovative product solutions to enable advisers to deliver value for their clients and to build investment portfolios tailored to their client needs.

Dynamic Asset Portfolios are actively managed portfolios targeting specific risk-return outcomes, helping advisers match portfolios to specific client goals. The portfolios provide advisers with a retail solution to the approach taken by many institutional investors and astute advisers seeking to capitalise on today’s changing market and economic conditions.

The portfolios form part of a complete off the shelf managed account solution built to enable adviser business growth and scalability. The solution is designed to help advisers provide a highly differentiated and valuable proposition to their clients – increasing the efficiency of service delivery and creating the potential to spend more time with clients, develop new business and lower operational costs.

Matthew Walker, Managing Director, Dynamic Asset, said: “We are thrilled with the addition of Dynamic Asset portfolios to the HUB24 Platform. We share HUB24’s aim to make it easier and more efficient for advisers to provide services that today’s clients demand. Furthermore, market demand for Dynamic Asset’s differentiated managed account solution is growing. Being on Australia’s most popular platform means that many more advisers and clients will gain access to a solution that will benefit both clients and advice businesses.”

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Matthew Walker

Leading Australian portfolio manager Dynamic Asset Consulting has announced that privately-owned financial adviser dealer group Finchley & Kent has added the Dynamic Asset managed account and investment management solution to its approved product list (APL).

The move echoes a trend across Australia’s advice sector as a growing number of self-licenced practices look to maximise the value of advice as well as efficient portfolio implementation during uncertain markets.

Finchley & Kent is an emerging dealer group that offers advisers a fresh approach from the traditional dealer group model. The business is centred on compliance, technology, streamlined services, processes and support, allowing advisers to focus more time on providing tailored, impactful advice to clients.

Sam El Shammaa, Managing Director of Finchley & Kent, said the Dynamic Asset approach was strongly in tune with the firm’s focus on how they could best add value by introducing more options to their adviser network.

“Dynamic Asset’s managed account solution and orientation to goals-based investing, supported by portfolios matched to client goals, helps our licensees deliver the advice and service that today’s investors expect. Furthermore, The Dynamic Asset solution is consistent with the ever-rising client best interest compliance obligations and the new Design and Delivery Obligations (DDO),” Mr El Shammaa said.

COVID-19 drives Managed Accounts surge

The adoption of managed accounts has seen huge growth in the advice sector as COVID-related volatility created major portfolio implementation challenges for advisers.

According to a 2021 joint report by Investment Trends and State Street Global Advisors, the shift to managed accounts among Australian advisers has continued to accelerate with 70% of advisers currently using or intending to use managed accounts, compared to 44% in 2012.

The study found that one of the key benefits for a growing number of advisers was freeing up their time which allowed them to focus on client relationships and reduce administration time.

Matthew Walker, Managing Director of Dynamic Asset, said Finchley & Kent represented a growing group of non-institutionally aligned advice and dealer groups that were rethinking their approach to servicing clients.

“We are honoured to be associated with Finchley & Kent. They are a group that is differentiated by their focus on leading-edge licensee support and enabling higher levels of client satisfaction. We’re pleased to have been selected to be part of their growth trajectory.”

Sydney-based Dynamic Asset Consulting provides end-to-end business solutions for Australian financial advice practices though actively managed discretionary accounts (MDAs). The firm was established in 2013 by a group of financial planners who were frustrated by the real-world limitations of conventional risk-based investment portfolio management.

In 2020 Dynamic Asset opened its portfolio management services to independent financial planners (IFAs) and has seen strong demand from advisers and dealer groups that are looking for turn-key business solutions that help meet increasing compliance obligations and client best interest duties in an efficient and scalable manner.

Mr Walker said the impact of COVID has served to reinforce the firm’s view that financial advice practices require a different way of managing client portfolios to generate absolute returns in challenging markets.

“Portfolios will be challenged by market dynamics going forward. To deliver what investors want they need to be managed actively, goals-based and able to respond rapidly to the everchanging economic environment,” Mr Walker said.

The actively risk-managed Dynamic Asset Long Term Wealth Builder portfolio has outperformed well-recognised institutional peers, delivering 7.18% per annum return over five years, 8.91% per annum over two years and 26.49% over the 12 months to 31 July 2020 (net of all fees).

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Dr Jerome Lander

Leading Australian portfolio manager Dynamic Asset Consulting warns that financial advisers are putting their businesses and their clients at serious risk by implementing traditional strategic asset allocation (SAA) portfolios.

Sydney-based Dynamic Asset Consulting (DAC) provides end-to-end business solutions for Australian financial advice practices though actively managed discretionary accounts (MDAs).

Portfolio manager Dr Jerome Lander said most Australian financial advisers are still operating client portfolios based on a view that interest rates will continue to fall.

“The new reality is that rates are bottoming out and can’t fall much further in a historical context, and if they do then mainstream asset prices are probably in big trouble anyway,” Dr Lander said.

“In the US we are seeing the effects of abnormal policies, including big tech names like Apple and Tesla being thrown around on pure speculation in what is becoming an increasingly erratic asset pricing environment.”

Dr Lander said portfolios need to be managed differently in an environment where major economic risks and crises loom large.

“Most portfolios recommended by financial advisers are based on a low inflation environment and falling interest rates,” he said. “That is the benign environment we have had. It is not the environment we are moving into and it increasingly unlikely to be the environment of the future. This is a key inflection point in markets and an opportunity for advisers to protect their clients and their business from what is coming. The world has changed.”

SAA portfolios face imminent risk

Strategic asset allocation (SAA) has been a popular investment strategy among financial planners looking to balance risk and return for their clients. For example, a traditional approach has been to allocate 60% of assets to shares and 40% to bonds.

But according to Dr Lander, the conventional wisdom of this strategy can completely fall apart during an inflection point.

“The 60/40 portfolio split is now a very risky way to run a portfolio. I couldn’t sleep at night running a portfolio like that. There is an urgent need for action right now.

“The bubble is not actually just in equities as most people think – it is in bonds and traditionally defensive assets. We could be entering an environment where you get absolutely no return out of cash and bonds, and little on property and equities over time. We could also see bonds and their proxies get totally destroyed, particularly if we get stagflation.” he said.

“Governments are likely to keep doing everything they can to create a more inflationary environment or fail completely in a deflationary death spiral.  What’s becoming rapidly less likely is that they’ll walk the tightrope successfully and continue with an ideal low inflation moderate growth environment. Central planning is likely to fail sooner or later.”

Bonds have traditionally held a defensive position in portfolios; however, Dr Lander warns they have become an increasingly risky investment in the current climate with a sub-inflation return outlook.

“Defensive assets are broken. Growth assets are expensive. Passive investing no longer works. In this environment an active, dynamic approach to investing has become critical,” he said.

Seizing opportunities with active management

With market volatility expected to continue, Dr Lander believes there are plenty of opportunities for investors.

“It is probably one of the worst times to be an index investor, yet one of the best times in history to be an active investor as a result of the distortions we are seeing in markets.” he said.

“There are many areas of the market that are sensible places to allocate capital, yet which aren’t making the papers and that advisers aren’t necessary being made aware of.”

Dynamic Asset has recently opened its portfolio management services to independent financial planners (IFAs). The group’s goals-based multi-asset MDAs provide a complete end-to-end business solution for Australian advice practices.

Managing director Matthew Walker said it has become increasingly clear in recent months that financial advice practices require a different way of managing client portfolios to generate absolute returns in the new economic environment.

“Tracking the market with passive index funds and failing to manage the new and increasing risks just won’t deliver the results that investors need,” he said. “What the wise do in the beginning, fools do in the end.”

“Portfolios need to be managed actively, goals-based and able to respond rapidly to the ever changing economic environment.”

Mr Walker has 30 years’ experience as a financial planner and launched Dynamic Asset in 2013.

“We determined that we were not prepared to accept the status quo on how we needed to run our client portfolios,” he said. We are now opening the door for other financial planning businesses to use the same service.

Dynamic Asset offers a plug-and-play, whole of business portfolio management solution for financial advisers across both retail superannuation and wealth.

The actively risk-managed Dynamic Asset Long Term Wealth Builder portfolio has outperformed well-recognised institutional peers, delivering a 5.41% per annum return over five years, 6.0% per annum over three years and 1.48% over the 12 months to 31 July 2020 (net of all fees).

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Dr Jerome Lander

Dynamic Asset Consulting (DAC), a specialist goals based investment advisory and management company, yesterday formally announced the launch of its new retail superannuation portfolios, which allow financial advisers and investors to tailor super portfolios to achieve specific financial goals.

The offering is the first series of portfolios that enable ‘true to label’ goals based investing inside of retail super in Australia.

DAC is an Australian adviser-led organisation that has developed over a number of years, backed by widespread industry demand for solutions that allow advisers to spend more quality time with clients while offering efficient, tailored portfolios to meet financial goals.

The firm has built investment portfolios structured to meet very specific liquidity and risk/return criteria. They can be used individually or more typically are blended into an overall portfolio to suit the multiple and varied goals of investors. The suite of goals based portfolios include: Cash Plus; Short Term; Mid Term; Long Term Wealth Protector; Long Term Wealth Builder; and now DAC Super – Australia’s only true to label goals based retail super product.

DAC solutions can be used for individuals, SMSFs, family trusts, businesses and retail superannuation investors. As part of the process, advisers can also access DAC’s bespoke online portfolio construction tool, which helps advisers bring together different goals, across different entities, into specific portfolios to create an overall ‘group portfolio’ design for ease of communication and implementation.

DAC is now exploring integration of this online tool into various adviser software to help advisers gain better efficiency in delivering goals based advice to their clients.

The missing link

DAC Chairman Matthew Walker said the combination of both retail super and non-super options gave advisers a much needed “whole of business solution”, allowing a direct link for advisers wanting to oversee investment portfolio design and management to suit them and their clients.

He said interest from advice firms continued to be strong following the industry launch of the new service at the 2017 Association of Goals Based Advice conference in Sydney last week.

“DAC really opens up the opportunities for advisory groups to be ‘true to label’ goals based advisers and gain business efficiencies and scale along the way, without having to reinvent to wheel,” Mr Walker said.

He said the consistency and reliability across all clients helps advice businesses with communication and reporting while offering significant operational efficiencies.

“If advisers don’t want to run the money themselves, then one approach is to outsource it to someone that is a specialist, who can take away the hugely time consuming and difficult task, leaving them to run their business. It’s a fantastic turn-key solution that allows advisers to build scale and focus on what they do best. By having a number of different investment portfolios, advisers can ‘mass customise’ client solutions, delivering great tailored outcomes while carving out more time to focus on advising and supporting clients to achieve their goals,” he said.

Experienced team

DAC is led by the highly regarded investment consultant and portfolio manager Dr Jerome Lander, supported by Veronica Klaus from Lonsec and Andrew Vallner from CPG Research and Advisory, all of whom are very experienced multi-asset managers and researchers. The systems, procedures and governance surrounding the team provides them with a framework to deliver institutional grade portfolios, that are focused entirely on client outcomes.

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