Challenging the misconceptions of a managed accounts transition

The momentum towards managed accounts is unmistakable. A noteworthy jump from 17% to 56% in the decade to 2023, with Investment Trends highlighting that more advisers are tapping into its potential. By the end of 2022, $144.5B was under management in this model, as noted by IMAP. 

For financial planners and advisers, two narratives emerge:

The Affirmative Switch: Those who pivoted to managed account portfolios are reaping considerable advantages. Praemium's study reflects: 

• 67% observed an uptick in client engagement.
• 47% found they had more quality time for client interaction.
• 33% engaged with top-tier clients frequently, surpassing ten meetings annually. 

The Hesitation: A section remains apprehensive, speculating that the shift might be overly complex or unsettling. Concerns range from: 

• Dilution of their stature as investment specialists.
• Potential pushback from clients against this change.
• The anticipated administrative strain linked to SoAs, explaining the change and administration to implement.

Debunking Misconceptions for Financial Professionals 

Misconception #1: The shift jeopardises my stature in investment expertise. 

Reality #1: On the contrary, managed accounts can amplify an adviser's value proposition.

• It places advisers in a strategic, client-centric role, fostering deeper rapport.
• Tailored strategies resonate more, reinforcing the adviser's unique value.
• Advisers wield comprehensive control over the portfolios, retaining decision-making power.

Misconception #2: Clients might be apprehensive. 

Reality #2: Clients appreciate insightful advice, particularly if you can align new portfolios directly to their personal goals.

• Managed accounts pave the way for robust adviser-client collaboration.
• Expert Portfolio Managers can delve deeper into research and astute allocations, something even the most seasoned adviser might find challenging time-wise.
• Clients experience reduced administrative responsibilities with Managed Accounts as they are managed without all the regular RoAs and transaction approvals.

Misconception #3: The business's Administrative requirements, especially regarding SoAs and implementation, are overwhelming. 

Reality #3: The rewards outweigh the initial challenge.

• With appropriate planning, the process can fit into normal review activities.
• Fresh advice and discussions can bolster new business opportunities.
• External Paraplanner services can manage the SoA details and significantly reduce the time impact.
• With Managed Accounts, once set, the portfolio manager spearheads allocations. Existing platform users can smoothly integrate changes.

Seizing the Managed Account Potential 

The benefits of Managed Accounts for both clients and advisers are clear. The proof of its effectiveness and advantages explains why so many advisers are switching. 

You should consider managed accounts if you want to:

• Improve your client engagement and experience
• Have a more differentiated and compelling value proposition
• Reduce the burden and cost of business administration
• Simplify business
• Introduce Dynamic Asset Allocation
• Mitigate portfolio and business risk
• Be more inherently compliance with the best interest and correct fit product obligations

Fortunately, with the right help and resources, it can be done more easily than you think.  

Planning and strategic implementation can mitigate day-to-day concerns. Plus, the right communication and client strategy can help differentiate your business and boost growth.  

The key is to decide that it's necessary to do something differently, which, as with all things in life, requires some commitment and perseverance. 

Dynamic Asset was built by an advice firm for their clients, with the implementation designed to be the most efficient and effective solution available. Every process step was discussed, planned out, communicated and implemented meticulously. The result – clients were happier and more engaged, the business was more efficient, FUM increased as clients bought into it, and there was more time to build the business by growing client numbers or building out other strategic initiatives.  

Dynamic Asset stands out from other managed account portfolio managers because their mandates were designed to meet client goals. This is different to the usual institutional approach. Plus, because all clients are different, there needed to be a full range of differentiated portfolios to manage all client circumstances.

Dynamic Asset provides a singular whole-of-client, whole-of-business solution for diverse client financial objectives and investment approaches. The solution spans retail super and non-super avenues.  

Contact Dynamic Asset to discover how you realise the myriad possibilities, debunk the myths and move towards a future-ready advisory business.

Dynamic Asset can help

Contact us to learn more about how we can support your transition to the Dynamic Asset managed account solution.

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