Boutique managers target SMSFs
Industry commentators have tried to outline an approach by which the boutique funds industry can avoid being sidelined by the rise in self-managed super funds (SMSFs) and the independent investor market.
Pengana Capital portfolio manager Steve Black said affected asset managers must come up with innovative structures that allow for the flexibility and tax advantages that can be found in the managed account structures popular among independent investors.
While that would increase administrative costs, fund managers should investigate using technology to lower those costs, he said.
Technology was already improving systems to help fund managers come up with structures that weren't too expensive or onerous for investors, Black said.
At the same time, Bennelong chief executive Jarrod Brown urged fund managers to focus more on increasing their market presence and branding if they hoped to capture the attention of the SMSF and independent investor market.
Reaching the self-directed investor is very difficult, he said.
"We receive self-managed super fund investors every day, but it's almost impossible to work out how they found out about you," he said.
Current statistics suggest that allocations to managed funds by SMSFs are relatively low, Brown warned.
Fund managers have to work hard to get captured in league tables and win awards for publicity, he said.
Bennelong didn't have a huge marketing budget to plaster its brand out in public, as most of its budget revolved around the assumption that the majority of the company's flows would be through an intermediary, he said.
But Bennelong watches the SMSF space very closely, he added.
The funds in Five Ocean Asset Management can be bought directly by the investor, according to Ross Youngman, chief executive of the global fund manager.
International investment was still difficult for investors because of currency issues and tax benefits, he said.
There is still very much a place for those kinds of managed funds in SMSFs, he said.
Chief executive of research firm RFi Alan Shields warned recently that the rise in SMSFs could cause problems for private wealth managers if they fail to act because they risk being dis-intermediated by accountants and planners looking to increase their status to that of trusted adviser.
There was still a place for fund managers under the SMSF structure, Shields said. SMSF investors need to realise that SMSFs can't do a better job or get better returns than a fund manager, he said.
Fund managers must examine the high net worth landscape in more detail and work out which investor needs are best aligned with the core competencies of their business, he said.
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