The right fit

Perpetual kicks goals with Mainstream SMA

Category: Licensee Managed Account

Viridian Advisory took home the prestigious Licensee Managed Account category at the 2019 IMAP Managed Account Awards. Piers Bolger, Chief Investment Officer at Viridian, talks to Jayson Forrest about the firm’s approach to managed accounts.

 

Finalists

IMAP congratulates all the 2019 finalists in the Licensee Managed Account category.

  • Canaccord
  • Crystal Wealth
  • Prime Financial Group
  • Royston Capital
  • Stanford Brown
  • Viridian Advisory

With a team of almost 300 employees nationally, servicing over 10,000 clients, Viridian Advisory is a significant player in the managed accounts space. The advice business has an expansive service offering that includes wealth and retirement planning, cash-flow and income strategies, lending and borrowing, investment management and portfolio construction.

And although Viridian Advisory is only relatively new to the managed accounts space, having first started offering this investment solution to clients soon after the firm was established in 2015, the investment team has been managing managed account portfolios for close to a decade. So, it must be doing something right, with the Melbourne-based business taking out the prestigious 2019 IMAP Award for Licensee Managed Account.

It’s an achievement not lost on Viridian Advisory’s Chief Investment Officer, Piers Bolger, who says winning the award is “significant” for the advice business.

“Winning this award clearly validates all the hard work we have put into building the managed accounts business within Viridian Advisory over the last four years,” he says. 

“It also reflects the very strong professionally led investment team we have, our robust investment process, and the fact that, as a business, we are prepared to put the resources into our investment capabilities to deliver the best outcomes for our clients.”

He quietly adds that receiving the award is also external recognition from the industry that Viridian is one of the leaders in the marketplace in delivering a managed account solution for clients.

Today, Viridian Advisory offers 13 different managed account portfolios, comprising six multi-sector diversified portfolios, five sector-based portfolios that cover the main asset classes (Australian Equities, Global Equities, Property and Infrastructure, Diversified Fixed Interest, and Alternatives), and two direct Australian equities portfolios (large cap and small-mid cap).

Implementation

When Viridian Advisory was establishing its business, there was much internal discussion and research about what the firm’s broad investment offer would be. It ended with Viridian deciding to move into the managed account space, believing it provided the best solution for both advisers and clients.

“When we first set the business up, we were looking at how we wanted to run our investment strategy. We saw managed accounts as providing the right solution for our advisers and clients,” Piers says. “It provided our advisers with the ability to tap into an institutional grade investment framework, while allowing them to focus on the strategic side of providing advice to their clients.

“By separating the investment process from the advice process, it has enabled our investment professionals to concentrate on the investment strategy, which has enabled our advisers to focus on looking after their clients.”

Piers says managed accounts were an optimal fit for the business. He adds that one of the reasons why Viridian opted for a diversity of managed account portfolios is to enable advisers to tailor the investment offering to the individual needs of clients, while avoiding the unnecessary complexity that comes with running multiple types of portfolios.

Another important aspect for Viridian in going down the managed account path was the ability for the business to create scale, enabling it to more effectively negotiate fees with external managers.

“As a result of this scale, we’ve been able to pass any rebates or discounts that we’ve negotiated, directly back to the clients to reduce their investment costs,” Piers says.

Investment consistency

Viridian has a five person portfolio management team, which is responsible for making the investment decisions for the business. The portfolio management team includes an external independent representative from Ironbark Asset Management (Fund Services), which is the licensed Responsible Entity for Viridian’s managed account portfolios.

From an investment perspective, Viridian manages all the portfolios in-house but uses a number of market leading vendors, such as Bloomberg and FE Analytics, in regard to the provision of market data and other portfolio management tools, while the business turns to both HUB24 and BT Panorama as its two platforms for the administration of the portfolios.

And what underpins Viridian’s philosophy when it comes to investing? 

“Our core philosophy is built on seven key principles, which define the way we think about investing,” Piers says. “Those principles are the construct by which we look to deliver our investment solutions for clients. From there, it’s about understanding where we are in the market cycle and how we want to position portfolios to best manage those portfolio objectives.

“Firstly, to manage the objective of the strategy. Obviously, different portfolios have different strategies. And secondly, delivering that outcome in the best risk controlled manner possible.   

“As part of our core philosophy, if you get less wrong over time, generally speaking, you will be able to deliver a more consistent return. It’s all about how you manage risk. If you can reduce the downside, we believe you’ll be able to deliver a more consistent investment profile over time.”

Client proposition

So, how does Viridian’s managed account service fit in with the advice business’ client value proposition?

“Very neatly,” says Piers. “When we think about how we manage our client relationships and how we deliver advice to clients, the adviser is really there to provide that strategic advice. Given that our managed accounts are managed by a professional investment team that is fully resourced within the business, it enables the adviser to focus on the strategic and holistic advice they need to provide for clients. It also shows to the client that as a business, we have an array of resources focused on their needs. We think this provides a compelling offer.

“When you think about the value that managed accounts bring to the marketplace, they enable advisers to avoid doing multiple tasks, particularly as it relates to investment selection and documentation, and focus on what they do best – looking after their clients and building client relationships.”

And with well over 1,500 Viridian clients already investing in the SMA offering, Piers believes Viridian’s approach to managed accounts is working – both for advisers and clients.

“I believe because we are prepared to put the resources into managed accounts, it clearly differentiates us as an advice business, and perhaps was one of the reasons why we won the IMAP Award for Licensee Managed Account,” Piers says.

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