Tony Nejasmic

Managed accounts are exploding in popularity due to the clear advantages they offer licensees and their clients, but leading investment research house Lonsec has warned that advisers are gambling with their business if they don’t address potential and actual conflicts associated with in-house managed account products.

According to Lonsec, advisers must look for ways to harness the benefits of managed accounts while avoiding perceived conflicts that fall short of community expectations or risk attracting regulatory scrutiny.

“Managed accounts have the potential to create significant efficiency gains and improve investment outcomes for advice clients,” said Lonsec Head of Wealth Management Sales Tony Nejasmic. “But if advisers don’t properly address the how and why of managed accounts, they risk creating a conflict trap that puts their entire business at risk.”

Current best practice suggests that embracing managed accounts is appropriate for many clients but must be done with the client’s best interests in mind. Fundamentally this means asking some hard questions about the adviser’s investment capabilities, fee structure, and governance framework.

An empowered ASIC is taking a serious look at how the advice industry is using managed accounts, while there has been a dramatic shift in community expectations following the Royal Commission into Misconduct in the Financial Services Industry.

“The test is to picture yourself before the regulator and ask yourself if you have a clear justification for placing the majority of your clients’ funds in your own managed account products. If you’re unsure of the answer, then you’re likely not offering the best value for your clients and you’re likely not fulfilling your best interest duty.”

According to Lonsec it is essential that managed accounts are used for efficiency purposes, do not involve additional fees, are free of perceived conflicts, and utilise professional investment managers in the construction of portfolios.

“For many advisers, outsourcing the investment process to a professional manager like Lonsec is the logical approach. Lonsec is also in the market to acquire investment management rights from those groups who wish to “de-conflict” their business, said Mr Nejasmic.

“This allows them to focus on strategic investment advice that meets their client’s objectives and not trying to be both Financial Adviser and Investment Manager at the same time”.

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Due to the rapid expansion of our managed accounts business, coupled with the ongoing growth of our iRate® research platform, Lonsec is expanding its business development function and is excited about having someone with Tony’s credentials join the group.

“Managed accounts are increasingly seen as a solution to many of the challenges facing advisers and they continue to gain acceptance. Lonsec is ideally positioned to take advantage of this development,” said Lonsec CEO, Charlie Haynes.

“Our previously announced strategy to assist conflicted groups by taking over the investment management responsibility for their managed account solutions will be a key part of Tony’s remit, together with extending our relationship with key wealth management institutions.”

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Tony Nejasmic

managedaccounts.com.au, one of Australia’s largest managed discretionary account (MDA) providers, is encouraging financial advisors using the Limited managed discretionary account (LMDA) arrangements on regulated platforms to transition clients to fully compliant options well in advance of ASIC’s 1 October 2018 deadline.

The removal of the Limited MDA or No-Action Letter from 1 October 2018 and requirement for clients to be migrated to alternate arrangements prior to 1 October 2018 is driving advisers to seek alternative options quickly. One clear alternative option has been the transition to a MDA solution, effectively outsourcing the MDA licensing authorisation.

managedaccounts.com.au Head of Distribution Tony Nejasmic, who is also responsible for distribution of the Linear solution following the recent merger said: “This is really crunch time for the market and for advisers to avoid a greater pain threshold as the deadline looms. We have seen a 65% increase in interest from advisers leveraging off the Limited MDA as the reality of the removal of Limited MDA’s and no grandfathering of existing positions is making itself known. Additionally, concern around possible future capital requirements, and the increased costs of implementing an in-house MDA is leading advisers towards a fully outsourced MDA approach.”

“With the no-action position on Limited MDAs being in place from 2004, the number of advisers impacted by the regulatory change remains unclear. Discussions with advisers are revealing a lack of planning around transitioning clients to alternative options. With less than seven months to implement an alternate solution, advisers may be unknowingly operating outside of the compliance boundaries or operating two business models just to cater for the changes. There are also no guarantee advisers will have the level of experience required by the regulator to operate a full MDA arrangement themselves if they were to opt for this approach”.

Nejasmic further noted: “Partnering with a licensed MDA Provider can offer advisers a seamless transition in continuing to enjoy all the benefits they and their clients have experienced to date under the Limited MDA arrangement. We are encouraging firms to undertake proper due diligence based on their requirements; whether this be requirement for greater control of the portfolio implementation and execution, custody or Direct HIN, SMA or IMA capabilities with full discretion, and ability to execute equity trades via preferred broker/s.

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Tony Nejasmic

managedaccounts.com.au (ASX:MGP), one of Australia’s leading managed discretionary account (MDA) providers, has been selected to build and implement a MDA service for Sydney based advisory group The Wealth Partnership, which manages substantial portfolios for HNW and SMSF clients.

The appointment, which followed an extensive review, reflects growing demand for bespoke MDAs as a model of choice for IFA businesses, according to managedaccounts.com.au Head of Distribution and Marketing, Tony Nejasmic.

“We are pleased to partner with The Wealth Partnership as a dynamic and progressive IFA committed to providing fuller and more transparent client services through smarter, scalable structures,” Mr Nejasmic said.

Dr. Tony Rumble, director of The Wealth Partnership, said the MDA allows the self-licensed group to efficiently and transparently manage a fuller range of investments for investors, including direct investment in ASX listed securities.

“HNW and SMSF clients want the ability to see exactly what they’re invested in, rather than co-exist in a ‘black box’ of managed funds,” Dr. Rumble said.

“Our MDA service allows clients to view their portfolios, typically on one page, and see dividends and franking credits as they hit their account, which is especially attractive for clients in pension phase who want to know how much income is being derived from their direct investments.

“It also allows us to swiftly re-balance portfolios and respond to developments such as corporate actions.”

Dr Rumble said the MDA’s scalability was key to the firm’s growth strategy, which has involved two substantial acquisitions over the last 18 months Mr Nejasmic said the rollout the MDA reflected continued evolution in the platform marketplace.

“It is clear that The Wealth Partnership’s MDA services will allow better control of clients’ investment outcomes and greater business efficiency as it pursues growth,’’ Mr Nejasmic said.

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Tony Nejasmic

Tony Nejasmic, Director of Business Development for Calastone Australia and New Zealand has announced that New Zealand investment platform Aegis has joined global transaction network.

This completes a major step in building their Australasian business and streamlining order processing between platforms and managed funds across the region.

Like Calastone has done in 29 other markets around the globe, they’ve expanded the network at the request of their existing clients who’ve expressed the need for more efficient transaction processing.

New Zealand is similar to Australia where manual processing has persisted in back offices that are responsible for managed fund orders worth tens of millions of dollars on behalf of thousands of investors.

New Zealand has demonstrated rapid adoption of automation to increase efficiency and improve risk management as orders continue to grow in number and size.

Since going live in New Zealand in May this year, calstone has brought on the two leading platforms, Aegis and FNZ; custodian Public Trust, as well as leading administrator MMC which represents many New Zealand’s fund managers including Devon Funds Management, Craigs Investment Partners, Mint Asset Management and Pathfinder Asset Management.

The adoption of Calastone’s Order Routing solution in New Zealand now opens up the focus and conversations to how participants can utilise additional Calastone solutions to overcome other pain points in that market, such as reporting.

Calastone’s Reporting solution, for instance, automates the sending and receiving of reconciliation and distribution statements, saving back offices substantial time and stress, particularly around tax reporting season.

Calastone purposefully built the Calastone Reporting solution to fit with local market specifications such as tax reporting specifications.

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Mr Nejasmic, a former Macquarie Bank executive with 20 years’ distribution and commercial management experience, will work closely with platforms and fund managers who are increasingly adopting Calastone’s automated network for domestic and cross border transaction processing.

Calastone Managing Director Australia, Sarah Hayward, said Tony’s appointment would help drive and consolidate Calastone’s growth across Australia and into New Zealand.

“Around 75% of the industry is now sending managed fund transactions via Calastone, gaining efficiencies and reducing risk through intelligent transaction automation,” she said.

“Calastone streamlines back office processing in the managed funds industry, where manual handling has long persisted, allowing firms and the sector to vastly improve operational standards and maximise opportunities created by initiatives such as the planned Asia Funds Passport.

“Clients already benefiting from automation clearly want full industry adoption so that benefits are maximised for all, and Tony’s role will be key in closing this gap.”

The Calastone network has already processed over A$45 billion of transactions between platforms and managers since its local operation commenced four years ago.

On joining Calastone, Mr Nejasmic said the firm’s impressive growth reflects the power of its smart technology solutions combined with a strong focus on client relationships and their requirements.
“I’m very excited to be joining the team at Calastone and look forward to working with clients to further reduce the inherent risks in manual back office processing,” he said.

Tony joins Calastone from Macquarie Bank where, over 15 years, he held a number of roles including the launch and distribution of the Macquarie Wrap service. Most recently he was Division Director responsible for the distribution of the Macquarie Managed Account platform. Prior, Tony worked in sales roles at Asgard and Count Financial Group.

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