Managed Accounts
Managed accounts are one of the fastest-growing investment products, riding the recent wave of demand for individual asset ownership over pooled funds.
In a managed account (MA), clients maintain direct ownership of the underlying investments, while having them professionally managed according to a set investment strategy.
This provides a transparent, lower cost and far more tax-effective outcome in a vehicle that allows clients to hold a diversified portfolio built across direct shares and other listed securities – including exchange-traded funds (ETFs) and hybrid securities, and international shares, unlisted managed funds, bonds, term deposits and cash.
According to research from the Institute of Managed Account Professionals and actuarial firm Milliman, funds under management in managed accounts swelled by 46% in 2017, to $57 billion1.
Why the sudden growth?
There are two major drivers of growth - firstly, managed accounts are very well-suited to the self-managed superannuation fund (SMSF) market, preferring direct ownership of assets and the greater control and transparency that MAs offer over managed funds.
Secondly, they allow financial advice businesses both to achieve scale and more easily conform to strict regulatory and licensing requirements given the vehicle outsources, wholly or partially, the asset allocation, portfolio selection, investment management and investment monitoring functions.
A MA outside of superannuation qualifies as collateral for a margin loan with Leveraged, as long as Leveraged has connectivity or a means to access reporting with the MA provider.
Investors can borrow to establish an MA, or borrow against an existing MA and to fund further investment into that MA - or alternatively, into other investments. The MA could be established with a one-off loan, or incrementally. A margin loan can be helpful for investors to achieve their goals – particularly given that the vehicle may have an initial minimum investment.
Managed accounts are a good example of a win-win financial product, in that they offer clients greater investment control, transparency and flexibility compared to managed funds. They offer investors access to professional asset allocation and portfolio management, in an individualised structure that always reflects their own tax situation.
To find out more about managed accounts as collateral for a margin loan with Leveraged, or to discuss how we can work with you and your clients, please contact your Relationship Manager or call us on 1300 307 807.
1IMAP / Milliman Latest Managed Account FUM Census as at 31 December 2017
Issued by Leveraged Equities Limited (ABN 26 051 629 282 AFSL 360118) as Lender and as a subsidiary of Bendigo and Adelaide Bank Limited (ABN 11 068 049 178 AFSL 237879). This information is correct as at 26.02.18 and is for general information purposes only. It is intended for AFS Licence Holders or authorised representatives of AFS Licence Holders only. It is not to be distributed or provided to any other person.