Lonsec makes strategic IMA planner offer
Research and ratings house, Lonsec is offering to acquire in-house managed portfolios from advice licensees in a move it says is aimed helping planners take advantage of best practice governance principles.
The company is making the offer in the context of helping planners better meet their obligations in a post-Royal Commission environment and would be in the business of acquiring the investment management rights from existing managed account providers, enabling them to focus on the provision of advice without conflict.
Commenting on the move, Lonsec chief executive, Charlie Haynes said the Royal Commission may have stopped short of a ban on vertically integrated or conflicted financial advice, but advisers knew they needed to start moving quickly in this direction to meet community expectations.”
He said that while it was becoming increasingly unpalatable for licensees or advisers to charge portfolio management fees for in-house managed accounts, advisers were also cognisant of regulatory developments.
The Lonsec statement said an “empowered ASIC” was investigating how platform providers ensured the integrity of managed accounts constructed by advice licensees who might lack the expertise or resources to act as specialist investment managers.
It claimed that for many advisers, the question was how best to manage conflicts, either by outsourcing the portfolio construction process or introducing a greater degree of independence in their investment decisions.
“Lonsec is proposing to acquire the investment management rights from existing managed account providers, enabling them to focus on the provision of advice without conflict,” it said. “Licensees have the flexibility to retain their existing branding, investment mandate and platform, or transition to Lonsec’s own professionally managed portfolios incorporating best ideas and insights from Australia’s leading investment product research house.”
“An outsourced managed account solution is becoming increasingly popular, not just in order to reduce conflicts but to allow advisers to focus on their clients’ needs and aspirations while leaving the investment process to specialised portfolio managers,” said Mr Haynes.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
