Macquarie has added SMAs to Macquarie Wrap.

Macquarie has announced the launch of separately managed accounts (SMAs) as an investment option on its market-leading platform, Macquarie Wrap, enabling financial advisers to view and manage their clients’ assets on one streamlined and consolidated platform.

Justin Delaney, Head of Wealth Product, for Macquarie’s Banking and Financial Services Group, said Macquarie is committed to continually investing in and enhancing Macquarie Wrap to deliver efficiencies to advisers.

“The growing interest in managed accounts in Australia has become more apparent in recent years, with investors embracing the ability of SMAs to take the complexity out of managing an investment portfolio,” Mr Delaney said.

“The decision to add SMAs to the Macquarie Wrap platform was driven largely by client demand for more tailored investment solutions and a wider selection of assets. SMAs combine professional investment management with the transparency, flexibility and tax efficiency of direct ownership.

“We believe adding a discretionary portfolio like an SMA to Macquarie Wrap will provide significant opportunities for advice practices incorporating them into their businesses, as well as improved client experiences and investment outcomes for investors.”

Through Macquarie Wrap, financial advisers and their clients will have access to an extensive range of SMAs, managed by experienced investment managers and covering a range of asset classes, strategies and styles, allowing the construction of a unique portfolio tailored to a client’s needs.

“Investors can hold term deposits, managed funds, direct shares and SMAs on Macquarie Wrap, and receive a complete view of their total investments in one place, with one consolidated report,” Mr Delaney said.

“We have been providing managed accounts for over 15 years, giving us a depth of experience within the industry. We have a fully resourced team of investment professionals and analysts to help make informed decisions about clients’ investments.

“With our strong focus and commitment to providing the highest quality financial services products to our clients, we look forward to delivering the benefits of SMAs to financial advisers and investors.”

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Peker focused on key trends which research identified. Drawing on responses from 919 financial planners, Peker emphasised that advisers were moving strongly to portfolios built on listed investments.

According to the planners who responded to the research, 28% of new client money is being placed in listed securities, including shares, REITs, LICs, ETFs, SMAs and IMAs, an increase from 23% the previous year. More significantly, planners expect the use of direct listed securities to continue to grow.

Planners typically saw a greater number of benefits of using direct investments in 2011, increasingly citing cost effectiveness, transparency and tax-effectiveness.

While stating that the number of planners recommending SMAs grew slowly from 17% to 18%, Peker highlighted that planners who have been recommending SMAs are ramping up their use. Planners currently recommending SMAs have 16 per cent of their personally managed funds under advice (FUA) in SMAs, up from 12 per cent in May 2010. These planners expect the proportion of their FUA in SMAs to nearly double by 2014.

Toby Potter, Chair of IMAP, said that use of Managed Account structures such as SMA’s are increasingly becoming the preferred vehicle for implementation of direct portfolios because of the efficiencies they offered.

“While directly held portfolios are more widely used by higher value clients, SMAs are seen as an alternative way of giving lower-balance investors the benefits of direct shares in their portfolios” he said.

Discussion at the breakfasts focussed on the business models of planners as they moved to more robust fee models. Portfolio management services provided by advisory firms will be a key tool for advisers to differentiate themselves from generic industry funds. “A distinctive offering will be the best  counter to a likely media campaign by the Industry Funds Network against planners” said Potter.

Technology development by the platforms as well as the emergence of new providers has made this increasingly a mainstream choice for planners. Already 40% of share trades by planners are executed through the platforms.

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