SMA product available for AFS advisers
Australian Financial Services Group (AFS) has decided to add a separately managed account (SMA) to the range of recommended products its advisers can offer their clients.
AFS Group chief executive Peter Daly said the independent dealer group got the idea to make a SMA available to its advisers after recognising how successful these types of products have been overseas.
“I personally think SMAs are an emerging market. The exciting part is that here in Australia we are able to provide this service at a far, far lower cost and fee structure than what they can offer overseas,” Daly said.
AFS has appointed Merrill Lynch Investment Managers to be the responsible entity for the product after conducting a rigorous tender process that involved five other fund managers.
Daly said AFS chose to partner with Merrill Lynch because of the strength of the manager’s brand, both domestically and worldwide, and its ability to provide an Australia-wide service that was compatible with the dealer group’s own domestic geographical diversity.
“It also came down to Merrill Lynch’s ability to meet out requirements, to tailor [the product] to what we were looking for. I don’t want to provide a solution that somebody else can go and duplicate overnight. Our key is to always seek a point of differentiation,” he added.
The SMA product will offer access to equity investments covering a variety of asset classes including international shares, unlisted securities, and domestic and global fixed interest.
Daly believes it will give clients an opportunity to manage their equity investments in a more tax-efficient and active way, with the advantage of having the direct support of a professional manager.
“The exciting thing about SMAs is that they are no longer just applicable to high-net-worth individuals. Now you can participate in a SMA with perhaps a transaction as low as $20,000, but the clients we’re targeting are those with anywhere between $100,000 and $500,000 to invest,” Daly explained.
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.
