Philo Capital Advisers has released the first instalment of a 3 part white paper that seeks to provide much needed industry education on managed accounts.
The paper is targeted at financial services practitioners who are interested in implementing managed accounts within their business but feel they need a more thorough grounding in the topic to equip them to assess the opportunity.
Philo joint CEO Brett Sanders says Philo has been engaging extensively with the financial planning community on managed accounts and has found that while interest is extremely high, knowledge levels are quite variable and many advisers are struggling:
“We have learnt not to assume too much when discussing managed accounts with advisers as they often don’t have practical or theoretical experience of them. Practitioners obviously understand unit trusts and wrap platforms well, but managed accounts are a different structure with distinct characteristics and advantages that most advisers are still becoming familiar with.”
Philo has responded to this need by producing a comprehensive paper that sets out the basics of what managed accounts are, explains common managed account terminology and addresses some of the key misunderstandings concerning managed accounts. Further editions drill down on the different legal structures for managed accounts and how managed accounts are best used. Philo also identifies and evaluates the different commercial structures that exist around managed accounts.
Head of sales at Philo Capital Stephen Karrasch believes the paper will be well received by advisers and practice heads:
“People can see some planning firms making great strides with managed accounts and there is a real thirst for understanding about how managed accounts work and how they can be used in their business. However, people are also confused by the diversity of managed accounts – they see services that are very different described as managed accounts and it creates all sorts of questions for them. This paper is designed to help clarify some of those issues.”
Philo estimates that the managed account market now exceeds $15 billion and is growing steadily. Their experience is that while some practitioners are using the structure to make their existing investment proposition more efficient, others are using the structure to refashion their value proposition and generate new revenue streams. Sanders says both groups are of interest to Philo:
“We obviously want to help people to be more efficient, but we can also show them how to bring new capabilities into their business that investors will pay for on an ongoing basis.”
