MTs gear up for separate accounts

Some ofAustralia’s largest master trust providers are preparing to push the envelope of retail managed fund and share market investing with the addition of separately managed account services to their product line-up.

The push is being headed by Sealcorp, which has announced it will offer separately managed accounts through its flagship Asgard master trust from August this year.

But Asgard is likely to be closely followed by the Norwich Union owned Navigator, which is assessing its options with a view to possibly launching a similar service in the later half of this year.

And the AXA owned Summit master trust will also move headlong into the separately managed account field, although its plans are at a slightly more embryonic stage.

The group has assembled a small project team to assess whether to develop separately managed accounts itself, import the capability from its offshore parent, or team up with a software provider to build a suitable product before a possible launch date early next year.

The growing interest in se0parately managed accounts is being fuelled by the burgeoning popularity of the products in the United States, where consulting group Cerulli Associates has predicted the financial services industry is about to embark on a period of separate account product proliferation.

The move by Australia’s master trusts into offering this type of product will likely see separately managed accounts become a viable alternative for a much broader cross section of high-net-worth investors.

To this point, separately managed accounts, which are essentially a customised investment portfolio owned by the investor and managed by a portfolio manager, have been offered mostly through banks and broking houses for the benefit of only the very wealthy.

The general manager of marketing and retail products at AXA Australia, Richard Shermon, says master trust providers will leverage off their technology platforms to ultimately make separately managed accounts viable for investors with as little as $500,000.

“This is the type of thing that platform providers are good at doing and as the platforms develop, individually managed accounts look like they will be the next trend,” he says.

The Asgard separately managed account service, announced as part of a planned revamp of Asgard earlier this year, will offer access to share portfolios as well as managed funds.