Easy for advisers to choose wrong managed account solution if unsure of their own business model and best needs of their clients.
At an Institute of Managed Account Providers (IMAP) hosted webinar on Wednesday, Tony McDonald, Director of T&C Consulting, explained the six big questions confronting both advice practices and licensees when looking at the best way of deciding on a managed accounts program.
“Any adviser or Licensee thinking about implementing managed accounts must decide from the outset what business they are in. There are a variety of ways to tackle managed accounts for clients.
“That’s part of the problem. Without being clear what you do well as a business and what client experience you want to deliver, it’s likely you will choose the wrong managed account solution”, said McDonald.
“After those key decisions, you then need to decide:
- Which services you will provide (e.g. portfolio management, security selection, portfolio administration) and which outsource
- A revenue model when introducing managed accounts – managed accounts can offer new sources of revenue but they can also add costs as well
- What is your risk appetite – managed accounts introduce new levels of enterprise and operational risk to any organisation
- How to allocate any resulting “efficiency dividend” from managed accounts – how much should be shared with clients and how much retained in the business
“There are quite a number of Managed Accounts options now available to advisers and dealers “ said Toby Potter, Chair of IMAP. “Choosing the most suitable involves understanding what each offers and how they fit with the business’s current capabilities and goals.”
“It’s a bit of a dog’s breakfast to be honest”, said McDonald. “There are a lot of choices out there. The providers often make matters worse by talking a different language when it comes to what’s unique about their service. Credit to IMAP which has been trying to get some common use of terms in this developing area.”
As part of the dealer Seminar, IMAP has prepared a comparative table listing key features of the major Managed Account services. This table is available from the IMAP website www.imap.asn.au
Enquiries
Toby Potter
Chair
IMAP 0414 443 236
toby.potter@imap.asn.au