Dealer groups warm to Merrill’s SMAs
Merrill Lynch Investment Managers (MLIM) yesterday launched its first separately managed account (SMA) offering in Australia, the Merrill Lynch Customised Portfolio Service, and several dealer groups have been quick to express interest.
Dealer groups Epic Adviser Solutions, Lonsdale Financial Group, Tolhurst Noall, DJ Carmichael and PKF Financial Services have already signed agreements with MLIM and are looking to white label the offering.
Lonsdale Financial Group chief executive officer Mario Modica said many advisers in his group used equity model portfolios and the new product would provide a ready-made solution for investors’ direct equity allocations.
MLIM managing director and co-chief information officer Maurice O’Shannassy said advisers could access the service via the web, where they could establish individual accounts for clients that blended together professionally managed models.
O’Shannassy said the service was structured as a managed investment scheme, which meant there were no additional licensing requirements for advisers wishing to offer direct equities to their clients through the service.
He said the SMAs also offered tax advantages compared with managed funds and allowed clients to retain beneficial ownership of their shares.
O’Shannassy said the fees charged by the Customised Portfolio Service were “extremely transparent all the way down to the advisers”.
He said the product charged no account fees, or fees for set-up, transactions or safekeeping. The dealer group and model provider determined what fees they would charge and research fees were directed to the broker by the model provider or dealer group.
“The adviser fee would be negotiated between the adviser and the investor. There’s no hidden in-built fee there. The adviser would sit down with their client and decide whether it’s fee-for-service or dial-up or any other way,” O’Shannassy said.
Merrill Lynch and Aegis Equities Research model portfolios are already available through the service and the software systems are provided by Premium Portfolio Services.
Recommended for you
A relevant provider has received a written direction from the Financial Services and Credit Panel after a superannuation rollover resulted in tax bill of over $200,000 for a client.
Estimates for the calendar year 2024 put the advice industry on track for a loss in adviser numbers as exits offset gains from new entrants.
Adviser Ratings shares five ways that financial advice changed in 2024 with an optimistic outlook for 2025, thanks to the Delivering Better Financial Outcomes legislation.
National advice firm Invest Blue has announced several acquisitions, including the purchase of an estate planning and wealth protection business Lambert Group.
