From left: Simon Hoyle, Janne Ashton, Leader Simatupang, Jimmy Luo, and Rob da Silva

Managed account portfolios produced by research houses and asset consultants are not sufficiently scrutinised by the broader research community, according to a panel discussion. 

Research firms are meant to ensure MAPs are fit for purpose and will deliver to investors the promises they make. They are popular among advisers and clients because they offer tax efficiency, flexibility, convenience, and cost savings. 

Speaking at the recent Professional Planner Researcher Forum, SQM head of research Rob da Silva said research firms are not examining their own portfolios but this will come over time which will create a flood of potential conflicts.

The fund houses are not legally required to get research on their products, but a lot of them do for good business reasons.

He added that writing a report on yourself is a tricky thing.

“You really have to dig under the hood and find the details so that you can disclose them to clients, so they’re aware of what they’re buying and how much it’s costing, and they can compare from one place to the other,” da Silva said.

According to AMP senior product manager Jimmy Luo, researching the researchers is more like a partnership. 

“We work together to build a portfolio that meets our needs and addresses a client’s requirements around meeting their objectives,” Luo said. 

“In a way, we’re using them as like a second pair of eyes.” 

Luo said AMP generally seeks an external rating on MAPs. 

“The whole purpose of that is a give us comfort that, you know, what we’re offering is of investment merit, and also the trustee comfort that we’re not sort of adding on anything willynilly,” Luo said.

He added that AMP basically builds bespoke portfolios for the practices. 

“While the consultants can charge a fee, we’re very much there’s no wiggle room around advisers charging a fee on those portfolios,” he said. 

AMP Advice chief executive Matt Lawler suggested at the March Researcher Forum that the industry should set up its own Your Future, Your Super style benchmark for managed accounts before the regulators step in.