‘We’re not trying to push SMAs’: Advisers challenge managed account premium

Managed accounts promise efficiency for practices but whether or not they help clients is up for debate.

But despite support from within the profession, there are some advisers who do have concerns about their usage and will act cautiously, while others will avoid using them all together.

Queensland-based LifePath Financial Planning co-founder and senior financial adviser Brad Monk says his firm tries to be “product agnostic” and that most of the time there isn’t much of a reason to move a client out of their existing industry fund.

“We’re not trying to push SMAs,” Monk tells Professional Planner.

“I think I must be the only one in Brisbane that’s not pushing managed accounts. I see all the benefits for me on doing that for back office, but apart from clever salespeople I don’t see it for the client.”

Monk says he can do a “quasi-managed account” in some of the major industry funds.

“I don’t need to move them into a platform,” Monk says.

“My thinking of it is best interests. If I’m in QSuper, is it really in their best interest to get out of QSuper?”

Research from Investment Trends claims advisers are saving the equivalent of almost three business days a week by adopting managed accounts.

Monk acknowledges there is an argument that managed accounts make changing asset allocation simpler, particularly when markets are volatile, but disputes whether that’s a role advisers should be performing anyway.

“Advisers don’t sit around saying that [US President Donald] Trump is going to say something stupid, let’s move. [It’s about] long-term strategy,” Monk says.

ASO Wealth partner and financial adviser Julien Renard, who is one of several leading advisers featured in the Professional Planner Strategic Outlook for Financial Advice 2026, says his firm predominately uses ETF-based SMAs on platforms.

“It’s all listed, meaning from a risk point of view there’s risk mitigated compared to private or unlisted investments,” Renard says.

“We find that works because most clients don’t need anything over-complicated. We use that as our core investment strategy and sometimes if we think it’s required – if we’re chasing high performance – or if they’re a high net worth or a sophisticated investor that wants more than listed ETFs, then we have alternative investment opportunities.”

ASIC announced in its FY26 priorities that it would conduct surveillance of AFSLs recommending and offering managed accounts to retail clients that will take into consideration compliance with general licensee and advice conduct obligations.

The regulator has since issued “please explain” notices to licensees and separately managed account (SMA) providers seeking information about any sales and revenue targets, inducements and benefits to offer SMAs to retail clients.

However, the Institute of Managed Account Professionals believes that managed accounts have largely delivered on client goals, and haven’t suffered a major collapse or scandal.

ASIC’s renewed scrutiny of managed accounts comes after the regulator shelved its review into managed discretionary accounts by advisers and licensees due to the Covid-19 pandemic.

But while many in the industry believed this gave managed accounts the regulatory tick of approval, an investigation by Professional Planner found the corporate watchdog harboured long-held concerns.

Adviser Ratings launched an SMA Standard to help bring transparency to fees and the Professional Planner Researcher Forum sought to further establish a minimum benchmark for SMA reporting.

Think Capital owner and financial planner Norma Falconer says the managed accounts her firm uses are well-researched, values-based, fundamental separately managed accounts.

“We know volatility is coming, your job is to make sure that volatility is soft for our clients,” Falconer says.

“There’s a layer of active management over the SMA. We are advocates for SMAs, we love them, we use them all the time.”

The Wealth Partnership director Tony Rumble says his firm is migrating its managed account usage due to HUB24’s closure of Xplore Wealth, which will be shut down by March 31 this year following a business review in 2025.

“What we’re definitely seeing is a proliferation of managed account-type platforms which we think is a good thing,” Rumble says.

“But I’m concerned about the Shield/First Guardian fallout where ASIC and the government have said they’re going to look to add further regulation in relation to related-party investments. Just be careful there’s no blowback on the managed account concept.”

The government announced a fresh consultation on managed investment schemes this week in the fallout of the $1 billion collapse of Shield and First Guardian.

Rumble says he’s worried there will be regulatory overreach in response to the collapse.

“A few years ago, ASIC were investigating this and they got to the point where they were okay with managed accounts, which if you think about it under the FASEA standards, a managed account was conceivably something that was going to be banned on the basis that you were receiving a benefit from it,” Rumble says.

“A managed account platform is simply an administration platform and what it invests in is unrelated, third-party assets.”