Advisers jump on managed portfolios trend

Yasmine Raso

Senior Journalist, Financial Newswire

29 November 2022

Managed portfolios have seen rapid adoption by advisers in recent months due to their ability to deliver better outcomes for clients and long-term, cost-effective and value-driving benefits, according to a new HUB24 case study.

This comes as Investment Trends’ latest Managed Accounts Report for 2022 revealed 53 per cent of advisers are now using managed portfolio solutions for their clients.

Head of Managed Portfolio at HUB24, Brett Mennie, said managed portfolios can only grow advice businesses by helping advisers gain access to portfolio management solutions and provide a cost-effective “scalable, efficient client value proposition”.

“For some time now, evidenced through the HUB24 Platform Alpha series whitepapers, we’ve known that innovative managed portfolio functionality such as tax optimisation capabilities combined with great advice can deliver real value for clients,” he said.

“The implementation efficiencies gained from the use of managed portfolios also has a significant impact on a clients’ portfolio value over time.

“Advisers are telling us that while there are many benefits to using managed portfolio in the first year, over time in the longer term, they’re seeing even greater outcomes for them and their clients.”

HUB24’s research showed that just under 60 per cent of advisers that had used managed portfolios for four years or more recognised the benefits of providing clients with the ability to see the underlying shares in their managed portfolios, and 55 per cent saw the solution as more cost-effective.

“The use of managed portfolios allowed us to embed our philosophy more efficiently, give us huge traction with clients and enabled us to heavily grow the business,” Ford + Scott Financial Planning Director, Tim Scott, said.

“We’re about to expand from four advisers to nine, and that’s on the back of the operational efficiencies that managed portfolios have created for us.

“We had a heavy direct equity exposure in our client portfolios and the volume of ROAs needed to achieve a portfolio change was quite burdensome. Having a structure in place that creates efficiency but also transparency and communication has led to a huge amount of trust and client engagement.”

Just over 40 per cent of advisers who had used managed portfolios for four years or more also said they recognised the benefits of clients directly owning individual securities.