Managed accounts – a post-FOFA revenue-driver
The significant emergence of managed accounts can be attributed in large part to the impacts of the Future of Financial Advice (FOFA) regime particularly on the revenue streams of the licensees, according to Institute of Managed Accounts Professionals chief executive, Toby Potter.
Addressing Money Management’s Fintech Platforms and Wraps Conference on the Gold Coast, Potter pointed to the manner in which the FOFA rules around things such as volume rebates destroying licensee revenue streams had been a driver for the rise of managed accounts.
“Managed accounts have helped recreate a revenue stream for licensees,” he said.
“What we’re seeing is managed accounts becoming a key way for licensees to provide services and a key way to the way in which they [licensees] are being reinvented,” Potter said.
The IMAP chairman acknowledged that he had been an advocate of managed accounts for most of the past two decades but said it had only been in the last three or four years that the growth he had always predicted had actually come about.
He said it was a measure of the importance of managed accounts in the current environment that when BT Financial Group had developed its major new Panorama platform, one of its main early inclusions had been managed accounts.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
