Once you've determined that your financial advice firm would benefit from the efficiency and transparency of a Managed Account solution, or you're simply starting to explore options, then the next step is to find a platform that will meet the unique needs of your business and clients.
There are a wide variety of Managed Accounts on offer. Some only provide limited services or investment choices, while others, such as Dynamic Asset, deliver a complete business solution that will allow your firm to realise the promised benefits of a Managed Account service fully.
A primary consideration when choosing a Managed Account provider is to consider your investment philosophy, as this will determine the best type of Managed Account structure for your business. Investors are increasingly expecting advice that is tailored to their individual financial goals and circumstances. Furthermore, they expect that investments will be tightly aligned with their goals over time in logical, achievable, and measurable ways.
The investment selection offered by the service provider is vitally important to enabling you to implement your investment philosophy and business approach. Those that only offer single asset class solutions or limited Strategic Asset Allocation (SAA) solutions may not be suitable for advice firms with a range of clients with varying investment needs and want to implement an investment solution that specifically targets those clients' needs.
Another vital aspect to consider is the increasing regulation and compliance to which advice businesses must adhere to. The introduction of the design and distribution obligations (DDO) in October 2021 requires that consumers invest in suitable products for their circumstances. Therefore, it is essential to have access to a suitable range of portfolios that allow the financial adviser to customise each client's investments matched to their unique financial goals. Those portfolios would most logically be Dynamic Asset Allocation (DAA) or Goals Based portfolios as they are designed to specifically meet client goals directly.
The best Managed Account providers will actively support advisers to meet their clients' best interests. Solutions can be linked to a variety of financial goals, including risk-adjusted returns and income over specific short and long-term timeframes.
In addition to the benefits to business of providing more client-centric services, advice firms should consider the strategic and operational advantages that the Managed Account provider adds to your business.
Service differentiation can create strategic advantages. Differentiation creates a competitive advantage that can earn higher fees, increase new client acquisition and retention.
Differing levels of operational benefits that Managed Account providers can bring are fundamental to the productivity, efficiency and profitability of advice businesses. The aim is to maximise customer-facing time and value creation while minimising administration and compliance costs – to offer more with fewer resources, from technology that supports planning and reporting to simplified statements of advice and a dedicated team to help with any transition.
Managed Account providers that offer a whole-of-business solution unleash the full potential of Managed Accounts by maximising operational simplicity. Those that provide a range of portfolios that meet your client base's breadth of investment requirements will cut complexity and the time required to research and manage the complete set of client portfolio requirements. Those that actively help you manage those portfolio’s in line with your client's best interests reduce administration effort.
When transitioning to Managed Accounts, you need to know that the team you work with will work hard to help your firm make the transition, including assisting with documentation, migrating clients and providing staff training. Managed Account providers who offer support services across the transition, implementation and day-to-day activity lower barriers to effective change.
The core proposition of all Managed Account providers is to create efficiencies by outsourcing complex portfolio management. Beyond that, Managed Account providers are all different in the way they help advice businesses to achieve profitable growth with different investment options. You need to identify which ones will help achieve the end-to-end business solution that will help your business thrive.
If you're interested in exploring Dynamic Asset's suite of value-added services that will allow your firm to realise the full potential of Managed Accounts, contact us today. We are Australia's only whole-of-business super and non-super Managed Account provider.