Macquarie rolls out DIY wrap

ASX superannuation funds trustee capital gains

28 August 2001
| By Jason Spits |

Macquarie Portfolio Services has rolled out the latest development of its wrap account which it claims will negate the need for many do-it-yourself (DIY) superannuation funds.

The Macquarie Super and Pension Manager (MSPM), will be offered under the Macquarie Wrap through financial advisers and was developed in response to adviser requests for functions not present in superannuation and pension products currently available on the market.

At the same time, the research found that DIY super was popular because it provided hands on control for clients as well as access to direct shares, and that retail and managed super funds were too costly.

As as result, Macquarie Portfolio Services division director Neil Roderick says the group launched the MSPM to offer the same services as DIY funds but as a cheaper alternative.

The fund will allow clients to transfer existing holdings without having to liquidate them into cash and then repurchase them under the service.

This will be achieved by the creation of a Macquarie Super Cash account into which clients will place their assets. After the wrap account has been created for the client and the funds cleared, advisers can then transfer these funds into the managed funds or securities investments.

Macquarie Investment Management Limited (MIML) division director David Shirlow says since the fund has a super and pension component, when clients roll over their lump sum they can avoid realising capital gains as the funds remain within the wrap account.

The MSPM will offer access to 160 wholesale funds and direct equities. The trustee of the fund, MIML, has placed some restrictions on the level of direct equity holdings to minimise risk for investors. These levels are set as a maximum of 20 per cent of the portfolio value in a single stock in the ASX 100 and 10 per cent in a stock within the ASX 101 — 200.

The cap also restricts investment in other ASX listed stocks to 20 per cent with a five per cent limit in any single stock. Exposure to a single market sector is limited to 50 per cent.

Roderick says the product is available only through advisers as the group feels the complexity involved in adequately using MSPM would be best handled with professional advice. Minimum entry is $20,000 in the accumulation phase and $50,000 at pension stage.

The Macquarie Wrap was originally launched in October 1999 and is now in use by 102 dealer groups with nearly $2 billion in funds under advice at the start of this month.

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