Transitioning to Managed Accounts

By Jayson Forrest - Managing Editor  - IMAP Perspectives

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Deciding to transition to a managed accounts program is the easy bit. However, for advice businesses that are not fully prepared, there can be challenges in implementing this investment solution. John Burton (Lonsec) explores the six critical factors that underscore a successful rollout of managed accounts.

Speaking at the 2022 IMAP Advice in Action conference, John Burton - Lonsec Head of Sales - believes there are specific challenges confronting advisers when rolling out managed accounts that may prevent their full implementation within an advice business.

In Lonsec’s experience, there are four key areas that prevent full implementation of managed accounts:

  • both the business and advisers not being fully committed to the program;
  • poor planning by the business in rolling out a managed accounts plan/strategy;
  • an unclear value proposition and investment philosophy, as part of a business making adjustments for managed accounts; and
  • poor execution of the managed accounts offering.

“Instead, what is required by a business when implementing managed accounts is a clear strategy and plan, a high level of commitment to managed accounts, and the ability to make the necessary adjustments to the business,” says John.

John Burton - Head of Sales, Lonsec
John Burton - Lonsec
Lonsec

What is required by a business when implementing managed accounts is a clear strategy and plan, a high level of commitment to managed accounts, and the ability to make the necessary adjustments to the business

John Burton

I also believe that for any successful connected client experience, advisers need to regularly engage with their clients to create memorable meetings. By showing the client how they are progressing with their financial situation, it not only creates trust, understanding and certainty, but it provides a truly connected client experience

John Burton

A connected client experience

According to Lonsec, there are six critical factors that underscores a successful rollout of a managed accounts offering. They are:

1. The managed accounts program must form part of an advice firm’s business plan, as well as in the objectives and key results for staff.

2. A business needs to review the value of its advice.

3. Choose an investment manager that supports and complements an advice firm’s investment beliefs.

4. Ensure there is clear positioning and client engagement around managed accounts.

5. A business must consider the change management implications of a managed accounts program for its team.

6. A business needs to properly understand the financial implications and business outcomes of implementing a managed accounts strategy.

“To overcome many of the challenges and roadblocks that prevent advice businesses from fully transitioning to managed accounts, they must provide a connected client experience, which is the key to success.” says John. “This means connecting the four most important parts of the managed accounts equation: your value and advice proposition; your investment solutions and philosophy; your service proposition; and client engagement.”

John says a connected client experience means:

  1. A business must clearly articulate their ideal client and the value of their advice to clients;
  2. A business must ensure their back-office is efficient and easy to do business with;
  3. A business must be able to clearly articulate its investment philosophy and how that proposition delivers the required risk/return outcomes; and
  4. A business must align its pricing to the value it is providing clients, and not to an administration service or investments.

“I also believe that for any successful connected client experience, advisers need to regularly engage with their clients to create memorable meetings,” says John. “By showing the client how they are progressing with their financial situation, it not only creates trust, understanding and certainty, but it provides a truly connected client experience.”

About

John Burton is Head of Sales at Lonsec.

John spoke on a session titled - ‘Selection and implementation of managed account programs - transitioning to managed accounts’ - at the 2022 IMAP Advice in Action Conference.

 


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