Private accounts arrive in Australia
Macquarie Bank has introduced an individually managed account service into the Australian market, based on the popular United States wrap model.
Called Macquarie Private Portfolio Management, the service is targeted at high net worth individuals, businesses and trustees with more than $500,000 to invest. It essentially offers a tailored personal investment management service for individual investors, and differs from a managed fund in that the investor holds the entire share rather than just units.
Macquarie Financial Services Division director Martin Crabb says the group has had eyes on the US market for about four years, and conducted research with the help of a management consultant firm (with a broking background) in Florida.
The US market of individually managed accounts has grown to a massive $660 billion as of last year from $163 billion just four years earlier, according to the US Money Management Institute.
"This is the fastest growing area in the US, but system and regulatory changes have made the service possible in Australia only in the last few years," Crabb says.
He says the service requires technology that is able to process large amounts of data, and it has only been in the last three to four years that technology in Australia has strengthened to take on such a management process.
With its personal approach, the portfolio manager tailors the investing style to the investor's individual needs such as asset allocation, tax structure, customisation and the best time to buy, hold and sell shares.
Macquarie has already signed up several investors to the service. Crabb says the Portfolio division currently has $100 million under administration and expects to grow quickly.
"It is having the best of both worlds, the best of managed funds and the best of owning shares and putting them both together," Crabb says.
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
