Advice benefits from Individualisation of managed accounts

The evolution and individualisation of separately managed accounts (SMAs) will help financial advisers to better compete with the private markets offerings of industry funds, according to a high-level panel at an Institute of Managed Accounts Professionals (IMAP) conference.

The panel comprised of Ironbark Investment Solutions chief executive, Alex Donald, Centric Wealth chief executive, Kieran Canavan and Evidentia chief executive, Michael Wright, pointed to recent mergers and acquisitions as being indicative of the managed accounts sector, particularly around the outsource CIO (OCIO) model.

The panel reflected on the recent Generation Development Group (GDG) acquisition of specialist managed accounts business, Evidentia Group, with the company’s new chief executive, Michael Wright describing the transaction as representing good value and “a function of earnings”.

The GDG acquisition of Evidentia sees the Evidentia Group and Lonsec Investment Solutions businesses merge under the Evidentia brand and offering tailored SMA and off the shelf SMA and Managed Discretionary Accounts (MDAs).

Wright’s sentiments were backed by Canavan who pointed to other OCIO businesses being brought overseas suggesting that the valuation was appropriate.

Wright said that the capabilities of Evidentia and its approach in terms of being able to deliver tailored SMAs would effectively put advice firms and advisers “back in charge”, particularly with respect to tailoring for high net worths (HNWs).

He referenced the individualisation of options with respect of tax and private markets.

Canavan said that, currently, the average adviser could not compete with industry funds because they could not provide ready access to private markets.

This was something that could be addressed by providing private markets access via Managed Discretionary Accounts (MDAs).

Moderating the panel, IMAP chair, Toby Potter, noted that the latest IMAP/Milliman census had calculated funds under management in the managed accounts sector as standing at $232.7 billion.

He also referenced forecasts suggesting that the sector could reach around $470 billion by 2030, with tailored SMAs being the fastest-growing segment.