Here’s one of the biggest knowledge gaps in advice

Alex Burke,  Senior Writer,  No More Practice Education

The recently-released State Street Global Advisors SPDR ETFs/ Investment Trends 2019 Managed Accounts Report reveals that one of the main barriers to advisers adopting managed accounts is a knowledge gap - both from planners and clients.

While the report, based on a survey of 722 advisers, reveals a significant take-up in managed accounts usage - 35% of respondents, up from 30% last year - 24% of current users and 38% of potential users said education was a "major hurdle" in broadening their usage.

Furthermore, a vast majority of respondents (82%) described their expertise with managed accounts as either basic or non-existent.

As a result of this, advisers are looking for additional educational material on client benefits, costs, tax advantages and basic functionality. One adviser who participated ran their own AFSL and said they require "independent research prior to recommending a new separately managed account (SMA)," adding that "very little research exists."

Part of the problem may be that managed accounts have traditionally been viewed primarily through the lens of direct equities investing, when in fact, as the report notes, managed accounts can "reduce a firm's compliance burden and provide proven benefits to clients such as access to the best fund managers at a competitive cost."

One respondent said the usage of managed accounts "[changed] the conversation entirely," allowing them to "demonstrate value" by focusing on "what matters most to the client, rather than individual portfolio holdings."

As Luke Fitzgerald, Mercer's Wealth Management Leader in the Pacific Market, explained in an interview with us last year, “a lot of these advisers aren’t using it as an investment solution, per se; but more a portfolio management solution.”

“They’re out there focusing on strategic advice,” he continued, “along with risk advice, estate planning, and managed accounts provide a more elegant solution when they can rotate in and out of managers and asset classes in line with the ebb and flow of markets across the totality of client base exposure.”

Contributing to the education piece mentioned above, we produced a series of panel discussions last year which address the key considerations for advisers looking to adopt managed accounts. You can view the full course here.


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here

Liked this article? Let us know

Want more of the latest in opinions, expert insights and training?

Subscribe to our free eNewsletter now

/ Related content

Are SMSFs in decline?

The latest ATO data suggests a once-booming sector may be slowing down.

What the ideal client needs to pay you

The numbers an adviser needs to service "mass Australia" simply don't ad....

Can we use machine learning to understand stock movements?

When designing a diversified portfolio, it sometimes helps not to look ....

Leave a comment /

Related content /

16 May, 2019

Alex Burke,Senior Writer,No More Practice Education

Are SMSFs in decline?

The latest ATO data suggests a once-booming sector may be slowing down.

Read now

16 May, 2019

Vanessa Stoykov,creator,No More Practice

What the ideal client needs to pay you

The numbers an adviser needs to service "mass Australia" simply don't add up.

Read now

15 May, 2019

Alex Burke,Senior writer,No More Practice Education

Can we use machine learning to understand stock movements?

When designing a diversified portfolio, it sometimes helps not to look at individual holdings in isolation.

Read now

WordPress Lightbox Plugin