Tailor MDAs for every client: adviser
Managed discretionary accounts (MDAs) should be customised for individual clients, both to manage diverse expectations and meet new regulatory guidelines, an adviser says.
Given the complexity of managing the accounts, advisers may need to outsource parts of the process, Crystal Wealth Partners director John McIlroy added.
"You need to think about the different parts. There is an operator who contracts with the client to provide the service, and perhaps also a custodian if assets are held on behalf of clients," he said.
"Then, there is the advisory capacity - who's providing the advice directly to the client - and in some cases there may be a fourth element which is the investment manager element if you were buying in some investment expertise."
He said advisers wishing to look after MDAs should decide early whether they plan to outsource administration, as this will affect the licensing structure.
McIllroy's advice follows the release of an Australian Securities and Investments Commission (ASIC) consultation paper earlier this year that argued for more detailed upfront disclosure from MDA providers.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
