The current low return outlook places a new urgency for dealer groups to help their advisers find new and innovative ways to reduce costs and improve performance for clients, says Sentry Group CEO Murray Hills.
With historically low cash rates, subdued share market returns and a slow Australian economy, it remains a challenging time for investors.
Sentry prides itself on offering advisers choice in best practice platforms and has been an early adopter of managed portfolios through platform partner HUB24.
“We specifically partnered with groups like HUB24, because we wanted our advisers to have the best tools available to deliver great after-tax returns for the client”.
“As an accountant by training, I have always been acutely aware of the need to get advisers and accountants collaborating together to make investment decisions that are informed by the potential individual tax impacts to a client,” Mr Hills said.
“We are strong believers in managed portfolios and have constructed 10 of these as part of the Compass Funds offering, which provides access to both Australian and diversified strategies via FPI Investments.
“This allows our advisers to outsource asset management and portfolio construction to specialist investment managers while still benefiting from the transparency, tax efficiency and portability provided by the exposure to direct assets.”
Mr Hills said Sentry chose HUB24 due to their sophisticated modelling tools to estimate CGT when switching from one managed portfolio to another or when selling assets.
“The system nets any assets at the account level, potentially reducing transaction costs and CGT by as much as 50 per cent when moving between managers, if they have substantially the same assets in their portfolios.” he said.
“This ability to model before a transaction is effected, allows advisers to use tax as one of their decision points between managers. The system also projects out 28 days to see if the tax position changes if the transaction was delayed for a month.”
The Compass Funds platform powered by HUB24, can dynamically select which tax parcels to trade based on the tax methodology of your choosing (ie, minimum gain, maximum gain or FIFO). This applies to any parcels within an account, whether they are held in discretionary portfolios or those managed by the adviser.
“We think that being a dealer group of choice is more than just delivering stability, training and compliance. It is about helping clients work with their accountants and advisers to achieve improved outcomes.
We must be innovative and accordingly we need client-focussed innovative partners,” Mr Hills said.
