IMAP Submission on the Managed Account Data Collection Proposal from The Australian Treasury

The Australian Treasury released a consultation paper on 23 September 2026 titled “Enhanced data collection for managed investment schemes”, and inviting submissions

Treasury's aim is to address data gaps and improve regulatory visibility across Australia’s $3 trillion managed investment scheme (MIS) sector. 

Below is the full submission by IMAP (Institute of Managed Account Professionals to Treasury.

This Submission includes 3 major recommendations at the end of the submission letter.

You can read the Treasury Consultation paper here (33 pages PDF format)

IMAP Submission Letter to Treasury

The Treasury
Langton Crescent
PARKES ACT 2600

Dear Sir/Madam

About IMAP

IMAP is the professional association for managed account professionals in Australia, including managed account providers, portfolio managers and advisers that use managed accounts. 

Introduction

This submission addresses the data collection proposals for both SMAs and MDAs. Many SMAs are registered Managed Investment Schemes and all MDAs offered to retail investors are by definition “Unregistered Managed Investment Schemes”.

The rationale for this Treasury proposal to collect additional data as cited in the Executive Summary is;

“ASIC’s visibility is largely reliant on annual financial reporting, which is retrospective in nature and does not provide sufficiently timely information to support proactive, risk‑based supervision or early intervention. This paper proposes more data at MIS registration, and a recurrent quarterly data collection for registered MISs, to establish ongoing regulatory visibility of developments across the sector and help identify emerging risks earlier. “^[1]

The issue that is understood to have precipitated the proposal are the Shield and First Guardian failures and consequential investor losses.

These losses appear to have stemmed from:

• Management of the schemes in ways that diverged from the Product Disclosure Statements
• Investing in related party schemes which lacked documentation or normal protections
• Excessive commissions or payments to lead generators
• Transfer of assets offshore.

Would increased data collection have had a significant chance of detecting or preventing these failures?, and

Are other courses of action available to ASIC more likely to be effective such as the requirement for trustees and platform operators to be stringent in their approval processes, or advice licensees more stringent in their advice generation?

^[1] Excerpts repeated from the Treasury proposal are shown in the this submission in italics

By IMAP

MDAs have been operated since the release of the initial Class Order in 2002, while SMAs developed more recently.

In the intervening 25 years, whilst the pool of managed account assets has grown to $315bn, there has been almost no evidence of consumer loss or adverse investor outcomes.

When such losses are measured by complaints to AFCA, managed accounts as a category are almost completely without identifiable complaint, and the investor experience of managed accounts has been on balance very positive.

This experience is unlike unitised managed investment schemes where adviser directed portfolios are used with:

• a process dependent on each individual adviser’s application of an APL (Approved Product List),
• a lack of expertise compared to professional portfolio managers,
• an absence of benchmarks or portfolio metrics, and
• a review process typically restricted to once or twice annually.

Can data collection enable ASIC to identify and address specific risks and if so, which? Below we identify some potential risks which might arise following investment advice to invest in a managed account.

• High risk lead generation (cited in ASIC 2026-27 Corporate Plan)
• Poor investment selection
• Poor return performance post investment
• Recommendation of a portfolio that is inappropriate for the true risk profile of the investor
• Investment in ineligible funds e.g. IM products by retail investors
• Inappropriate use of related party products
• Breach of PDS terms / MDA Investment Program
• Excessive fees
• Operational error
• Overtrading of listed securities where the Provider derives benefit from the trading
• Fraud within a product

Would a high volume of data provided by SMA and MDA Providers assist ASIC in identifying and addressing these before they result in investor losses that result from causes other than normal investment market returns?

Below we consider the extent to which data collection as proposed might identify and prevent these risks.

Can data collection enable ASIC to identify and address specific risks and if so, which?

Below we identify some potential risks which might arise following investment advice to invest in a managed account.

• High risk lead generation (cited in ASIC 2026-27 Corporate Plan)
• Poor investment selection
• Poor return performance post investment
• Recommendation of a portfolio that is inappropriate for the true risk profile of the investor
• Investment in ineligible funds e.g. IM products by retail investors
• Inappropriate use of related party products
• Breach of PDS terms / MDA Investment Program
• Excessive fees
• Operational error
• Overtrading of listed securities where the Provider derives benefit from the trading
• Fraud within a product

Would a high volume of data provided by SMA and MDA Providers assist ASIC in identifying and addressing these before they result in investor losses that result from causes other than normal investment market returns?

The extent to which data collection as proposed might identify and prevent these risks are considered below.

IMAP is concerned that the enormous volume of data which is proposed, and the frequency of collection are both:

• onerous on the data providers and,
• unlikely to be effective in identifying or addressing most of the risk issues listed above which might lead to investor losses other than those which are directly related to investment markets.

In an appendix to this submission, we provide an approximate calculation of the data required to meet the requirements set out on p19 of the Consultation Paper.

It appears to be in excess of 1.1 bn records per year.

In our responses below we do not distinguish between Managed Accounts operated as registered MIS (SMAs) and Managed Discretionary Accounts (MDAs), except where we specifically identify issues relating to one type rather than the other.

1. Should there be recurrent data collection for registered MISs? If not supportive of a recurrent data collection, is there an alternative way that ASIC could access timely, regular and reliable data on MISs to support a risk-based approach to oversight and enforcement?

IMAP is supportive of regular data collection that leads to a better informed market and to better decision making by investment professionals.

For this reason, IMAP believes that it should be mandatory for both registered MIS and unregistered MIS operated as pooled structures such as unit trusts to report on their holdings as is the case in other jurisdictions.

Managed accounts are transparent structures where each investment is held directly by or on behalf of the client, and in the case of MDAs, pooling is prohibited.

However, the proposal in this consultation paper to collect substantial amounts of data from managed account providers and to a level of detail that does not seem relevant or appropriate for the type of risk which data collection might reasonably be expected to inform a regulator.

Treasury have asked for feedback on the frequency of data collection 

6. How often should recurrent data be collected? Is the proposed quarterly collection appropriate?

The proposed quarterly reporting calendar and the volume of data which is proposed in the discussion section of the paper would be onerous.

MDA Providers are required to provide an annual statement to investors by 30 September which lists the fees paid and the other costs.

This reporting obligation is set out in RG179.192 as follows:

However, you must inform the client about the total management costs and any other fees and costs associated with your MDA service over the relevant reporting period, calculated on the same basis as required for disclosure in the FSG. This means you must take into account all the fees and costs for your service, and any fees and costs for the regulated platform will be an interposed vehicle through which you invest client portfolio assets.

RG179.192

Evidence from 1 MDA Provider shows that this is an extremely onerous process and is estimated to require the equivalent of 1 FTE for up to 4 weeks across two separate organisations during the 3 month window for its provision.

Repeating this four times / year would impose substantial cost which would inevitably be borne by the investors.

In the absence of any current  evidence of "investor harm", this would be an instance of regulation deadweight and a drag on industry productivity.

Further, once the data exists, it seems probable that it will generate further enquiry that will be an additional distraction the core activities of advice, portfolio management and portfolio administration. 

In question 7 below we comment on the range of data which is proposed to be collected

We identify a range of potential risks and offer some observations on whether the proposed data collection is optimum for identifying “emerging”, or for that matter, “emerged” risks.

Clearly there are currently adequate regulatory provisions in place to monitor and control each of these risks.

8. Is it possible for the RE of a MIS to report on the source of investor funds, that is have funds come from an investor directly, a SMSF, a superannuation fund or wealth platform or via a wealth manager?

IMap's view is that it is possible for a reporting entity to identify the investor type e.g. individual, joint, SMSF, retail superannuation, as a result of their account opening requirements.

However, this does not provide any data on the “source of funds” beyond that which is obtained as part of the AML / CTF process.

As the AML/CTF process is comprehensive, further data collection is duplicative or intrusive (to clients) and unlikely to produce useful insights.

9. What are the barriers to this proposal, and what is industry’s capacity to adapt its data reporting to changing government requirements, recognising this capacity will vary across the sector?

Amongst the data provision issues are:

• Data volume – It is estimated that there are currently over 3,000 separate SMA models offered across IDPS and Super platforms.
  
  Many represent an identical underlying model but are separate legal products.
  
  Given there are 250 AFS licensees authorised to issue MDAs, this number is likely to be matched by the number of MDA models. As the proposal calls for data to be provided at the portfolio level, we estimate that there may be 1.25m separate portfolios.
  For an estimate of the data collection volume see the example below.
  
  
• Access to data – many MDAs are run on regulated platform – a category specifically allowed under the MDA Instrument.
  The data is therefore held on platform. Data extraction tools and capability from platforms vary widely. MDA Providers would be largely dependent on the platforms for provision and accuracy of data for ASIC reporting
  
  
• Asset data standardisation –  We note that there is a diversity of categorisation schemes already in play, and to a lesser extent, different views on asset categorisation even when stakeholders are using the same classification scheme. See examples below.
  
  It would clearly be impossible for ASIC to issue a standard asset class scheme for every investment which might be held in a managed account and even if this was possible (one platform alone offers over 7,000 investment options in its wholesale IDPS menu) the capacity of managed account providers to store a new asset class against every asset in addition to those which it already holds would be enormously costly.

• Cost to obtain and provide data – while difficult to estimate, assuming an FTE per MDA Provider to provide the volume of data proposed, at a cost of say $150,000 per FTE, this would impose costs on MDA investors of ~$37.5m or 6 basis points when spread across the $60bn in MDA FUM.
  
  This would be an increase of 50% in the cost of the MDA provision for some providers.
  
  It is hard to estimate the cost of data collation on SMA providers but a cost of 2-3bp is conceivable or an increase of 50% in the cost of Responsible Entity services.

IMAP has for 7 years managed an annual Managed Account Awards program. This has highlighted to us the diversity of offerings.

For the most part this reflects SMA products and MDA services that have been developed to address specific advice requirements and the specific ways in which advice firms choose to create, deliver and price their service.

For example, the variances among managed accounts in fee structure can include (but are not limited to):

• Bundling advice and portfolio management fees
• Waiving or reducing brokerage or other transaction costs for clients who pay portfolio management fees
• Bundling Responsible Entity costs and portfolio management fees
• Waiving portfolio management fees where the portfolio consists of related party product including ETFs
• Tiered pricing for large accounts or family group pricing

Standardising fee or cost data by ASIC in a way which allowed meaningful comparison among managed accounts is likely to create substantial data management issues.

Another instance of variation among managed account programs would be the quite valid variety of portfolio objectives against which these are managed.

A partial list of these includes:

• Market linked composite benchmarks
• Specific market benchmarks
• Absolute return objectives
• CPI + x%
• RBA / cash + x%
• Benchmarks expressed in a currency other than AUD

Those managed accounts which are registered managed investment schemes (SMAs) generally operate in a similar way to unit trusts with a standard model which may be varied based on client preferences to substitute or exclude assets. Reporting model level performance and asset holdings is therefore relevant.

However, each MDA portfolio is legally a unique contractual arrangement between the MDA Provider and the investor.

Our requirements relating to the investment program are designed to promote client protection while providing flexibility. For example, the program could be very detailed and identify financial products or classes of financial product in which you would invest, or it may contain a broad investment strategy or an identified goal that allows broad discretion to make investments to achieve an agreed outcome

RG179.134

It is precisely this flexibility which is one of the attractive characteristics of the MDA structure. This means that, while a model may be a starting point for the construction of a specific investor portfolio, the end point is potentially rendered unique as a result of issues such as

• Investor cash flows
• Existing legacy holdings
• Investor’s tax structures
• Assets held outside the MDA

Without providing a full data set down to holdings for every portfolio, it would be difficult for many and impossible for some MDA Providers to provide representative data.

11. What would be appropriate data fields for agencies to collect at a portfolio level for managed accounts?

Until the specific risks that might concern ASIC are clearer it is not possible to provide a detailed response to this question. However, an initial basic data collection exercise which obtained

• Program total FUM
• Number of standard models
• Related party product inclusion in portfolios
• Parties involved in provision of services to the managed account program and their roles

Although Managed Discretionary Accounts are technically defined by ASIC interpretation in the Legislative Instrument as unregistered managed investment schemes, the proposals in this section are clearly intended to relate to wholesale funds.

It should be clearly stated that these proposals do not relate to MDAs.

Summary and Recommendations

In the absence of instances of client detriment over a period extending back to 2002 when the first version of managed accounts were specified by the release of the MDA Class Order, extensive and costly data collection is likely to lead to increased investor cost and diminished industry productivity for little obvious benefit.

Recommendation 1

Data collection is limited to the minimum necessary to establish the scope of the managed account market, FUM and new business for each participant

Recommendation 2

As risks are already addressed through existing regulatory action, ASIC relies on these tools rather than onerous and costly large scale data collection to endeavour to identify behaviour which results in adverse client outcomes

Recommendation 3

MDAs are not included other than in market size data collection because of the individual legal arrangements which each MDA contract represents and the requirement that each is accompanied by personal advice.

We welcome further engagement on this issue and recommend that MDAs be excluded from inclusion.

Asset Data Standardisation Examples

MXT.ASX: Metrics Master Income Trust (MXT) is a registered managed investment scheme listed on the ASX. The responsible entity is The Trust Company (RE Services) Limited (ACN 003 278 831; AFSL 235 150) and the fund is managed by Metrics Credit Partners Pty.

This could quite legitimately be classified in different managed account asset class classifications as

• Australian listed investment
• Australian fixed interest
• Private Credit
• Defensive Alternative

RIO.ASX: Rio Tinto Limited (RIO) is engaged in minerals and metals exploration, development, production, and processing. The portfolio of assets is condensed into four product groups: Iron Ore, Aluminium, Copper, and Minerals.

This could quite legitimately be classified in different managed account asset class classifications as;

• Australian listed investment
• Resource stocks
• Equity income stocks
• UK listed investment
• US Listed stocks (ADR)
• Global equity
• Commodities

Data Volume Calculation Examples

Based on the outline on p19 of the Consultation Paper, there would probably be 350 reporting entities assuming the data is collected only from Responsible Entities and MDA Providers.

Based on $315bn in managed account FUM as at June 2026, with an assumed average portfolio size of $250,000 and 20 holdings per portfolio, this would mean reporting every quarter by reporting entities including

• 26m portfolios with probably up to 25 records per portfolio to account for
  • identifying details – name, account number, adviser, licensee, platform etc
  • benchmark and model
  • fees identified by fee type – establishment, portfolio management fee, interposed entity fees, brokerage etc
  • performance - month, quarter, 3 month, 6 month etc
• 25,000,000 individual holdings records with perhaps 10 related records including;
  • Exposure – dollar and units
  • Weight in the portfolio
  • Asset classification
  • Domicile
  • Asset nature – direct /indirect

In aggregate this would mean that providers would collectively be responsible for generation and validation of 280 million records per quarter, or 1.1bn records per year, a number expected to grow by 20 % per year.

Contact Details

Institute of Managed Account Professionals Ltd

Toby Potter – IMAP Chair

+61 414 443 236

toby.potter@imap.asn.au