Anyone who has bought a car – or more precisely, had to keep the family happy while also buying a car – knows that the requirements can be in conflict and are sometimes utterly unrelated to practical considerations.
Requirements such as size (big enough for the dog); colour (not another black car); engine size (zippier than the last one); fuel efficiency (economical) and extras (fitted GPS) all need to be addressed.
Managed accounts are like that. Making a decision about the most imaginative new idea to emerge in retail advice over the past decade can involve advisers or licensees trying to resolve seemingly incompatible goals.
Precisely because managed accounts impact so widely on all aspects of the way a dealer group or advisory practice operate, identifying the key decision criteria is critical. Hence this quick buyer’s guide, where we’ve set out a few simple questions as a starting point for the search.
Practice or licensee?
The first question is: Who are we making this decision for – adviser practice or licensee? The answer to this is going to determine so much that follows.
If the answer is that this is for the adviser, then we are going to be lead down a path of:
• office efficiency
• fit with the current platform and processes
• access to sector specific managers in which the adviser and their clients have confidence.
If the answer is that the licensee believes that managed accounts represent an important way for them to differentiate their offering and a path to a sustainable future, then the key choices are likely to be:
• strong administration partners
• revenue models that advisers and clients will accept
• strong strategic asset allocation capability as well as sector specific management
• considerations about the AFSL authorisations needed.
Because the key decisions aren’t the same for advisers and licensees, I have listed each in more detail in the table below, but split between the two.
|Adviser’s key questions||Licensee’s key questions|