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ASIC Managed Accounts Project - IMAP Regulatory Group update

The IMAP Regulatory Group was formed in September 2018. A key reason for the formation of the group was to ensure that the broad managed account community was well represented in issues that specifically affect providing and advising on managed accounts.


In ASIC’s Corporate Plan 2018 - 2022, ASIC announced it is initiating a new project on Managed Accounts.

ASIC have noticed the significant growth and expect this to continue and that Managed Accounts will be part of mainstream financial services.

The project commences with a research and engagement phase; the scope of the project will be broad and encompass platforms, managed account issuers and advisers including SMAs, MDAs and IDPS.
They have commissioned a research survey of advisers along with a benchmarking study into managed account functionality of major platforms.

Several platforms with managed accounts will be asked to provide information relating to the types of structure, fees, risks and conflicts of interest and how these are managed and other relevant matters.
Next year another group comprising advice AFSLs and advisers will be approached by ASIC to gain insight into the development of advice relating managed accounts with a similarly broad sweep of items reviewed. ASIC will also ask for client files that illustrate live examples.

ASIC have 3 objectives in the initiative;

 

  1. This surveillance may identify actual harms or concerns - in which case ASIC will take action.
     
  2. It will enable them to raise awareness of potential harms or concerns.
  3. It will provide the basis of a high level review of the regulatory framework for all types of Managed Accounts including an industry consultation process.
     
  4. IMAP will liaise closely with ASIC during the project to ensure we support their efforts to gain a clear understanding of the operations, risks and benefits of managed accounts and continue to represent the interests of managed account professionals.

The IMAP Regulatory Group

Since establishment, the Regulatory Group has been working through a number of other issues that affect IMAP subscribers.

MDA documentation
Over the course of the previous 12 months we had flagged problematic drafting in the MDA Legislative Instrument and RG179 resulting in duplicated disclosures and difficulties in ensuring that disclosures are “clear, concise & effective”.
Along with a number of MDA Providers, IMAP Regulatory Group held consultation in person at ASIC Sydney offices in October and discussed these problems and some the resulting workarounds required.
A review of documentation by ASIC will be included in the larger Managed Accounts project (see above).

Royal Commission
The Royal Commission Interim Report was published in early October and flagged a substantial number of potential policy considerations. There were no specific references to any type of managed account but report proposed a large number of questions with relevance to SMAs, MDAs and other types.

IMAP, through the Regulatory Group wrote a response focusing on those questions that affect managed account professionals, particularly the management of Conflicts of Interest, Vertical Integration and the need for structural industry change. As we now wait for the publication of the Final Report on Feb 1 the Regulatory Group has been discussing the likely impacts for Managed Accounts in Australia. For a copy of the IMAP submission click here.

Other Matters
RG97 (Disclosing Fees and Costs). A consultation paper will be issued in January which will have an impact on all investment products, including managed account providers of all types.
Timetable for NTA requriements for MDA providers will now be set back given the timetable of the surveillance project.
 
If anyone has any questions please contact IMAP or members of the Regulatory Group individually:

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Mark Oliver - Macquarie
Jesse Vermiglio - Holley Nethercote
Claire Wivell Plater - The Fold
Bala Shastri - Praemium
Stewart Chandler - AFSL Compliance

IMAP coordinates a Managed Account Submission to Royal Commission - PDF Download available

 

The Royal Commission Interim Report raised questions which caused many observers and members of the public to question the fundamental integrity of an industry that ought to be characterised by adherence to fiduciary standards. In drafting a response on behalf of the Managed Accounts community, IMAP wanted to illustrate by reference to five of the “particular issues” that managed accounts are services that:

  • are likely to improve client outcomes
  • lead to a more efficient and sustainable advice profession, the benefits of which are demonstrably passed on to clients in lower costs and better service,
  • support the separation of roles which encourages specialisation and professionalisation.

Click here to download the IMAP submission in PDF format

Please send your comments or inquiries to

Toby Potter, Chair

P: 0414 443 236
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Spring 2018 Perspectives

The latest edition of IMAPs quarterly magazine "Perspectives" is now available in PDF format for you to download.

Click here to download the Spring 2018 edition in PDF format, or click on the cover image below to view in a webpage

 

 

Please send your comments or inquiries to:

Toby Potter, Chair

P: 0414 443 236
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Jane McIlroy, National Marketing & Events Manager
P: 0411 420 180

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Find out more about Managed Accounts at the FPA Congress in Sydney from 21 – 23 November 2018.

IMAP's Managed Accounts Central is a great "no pressure" way for advisers and dealer principals to find out more about implementing and operating Managed Account services. 

Please support us supporting the FPA by coming and talking with our managed account service providers.

You can view the latest offerings and discuss challenges, opportunities and learnings from implementing and growing managed accounts as part of the adviser solution mix. Please do come and find out more at the large display area in the exhibitor's arena.

Here is the link to the FPA Congress home page

IMAP's Managed Account Central expo is supported by:

Elston Asset Management
Financial Express
J B Were
Macquarie Investment
Mason Stevens
Philo Capital Advisers
Praemium
Watershed

 

 

IMAP / Milliman Latest Managed Account FUM Census as at 30 June 2018

 Steady Growth in Managed Account Funds - IMAP Releases Latest FUM Census

IMAP (The Institute of Managed Account Professionals Ltd) in conjunction with Milliman has released the latest data in its 6 monthly Managed Accounts FUM Census series. 

As at 30 June 2018, FUM in Managed Accounts stood at $62.43 bn.

This balance represents a six month increase of $5.389bn (or 9%) on the 31 December 2017 FUM total of $57.05 bn.

For the 12 months “year on year” period this represents an annual growth rate of 31% or $14.85 bn in FUM.

The growth in FUM results split between types of managed accounts is as follows:
  

Managed

Account Category

30 Jun 2018

($ billions)

31 Dec 2017

($ billions)

Incr / Decr $

($ billions)  Dec 2017 to Jun 2018

Incr / Decr %

Dec 2017 to Jun 2018

30 Jun 2017

($ billions)

SMA / MIS 

$20.55

$17.04

$3.51

21%

$13.90

MDA services

$27.34

$25.47

$1.87

7%

$23.37

Other services

$14.54

$14.54

$0.00

0%

$10.70

Total

$62.43

$57.05

$5.38

9%

$47.97

 

Toby Potter Chair of IMAP said “Over half of the increase is the result of organic growth.  We estimate that $2.99 bn of the increase is due to inflows of new funds from existing participants growing their Managed Accounts business, compared with $3.37 bn in previous 6 month period.

The total growth for the past 12 months from new funds inflow is $6.36 bn for 2017/2018 (this excludes the market growth)."

Wade Matterson, Milliman’s Practice Leader – Australia, estimates 45% or $2.4 bn of the increase can be attributed to steady growth in investment markets with the value of the ASX / S&P 200 Accumulation Index increasing by 4.23% over the 6 month period.

“This compares with a 8.37% or $4 bn market growth factor in the previous 6 months and reflects the total market conditions over that time period” says Matterson.

To compare the growth rate of managed accounts with other financial services in the retail market, IMAP compared it with the Master fund data over the same period (provided to IMAP courtesy of Strategic Insight www.strategic-i.com.au).

Strategic Insight’s statistics from their Masterfunds, Platforms and Wraps Survey at 31 March 2018 show Masterfunds with $809.3bn of FUM from annual net inflows of $20.6bn in the previous 12 months.

The 6 month net flows to 31 March 2018 were $6.5bn.  The Strategic Insight statistics to 30 June 2018 for comparative purposes are expected to be published shortly.

“Forty three companies participated in the latest Managed Accounts FUM Census ranging from the very large (major platforms and banks) and MDA Providers to individual licensees who largely operate their service internally,” said Potter.

 

IMAP wishes to expressly thank all census contributors - a number of whom are listed below (by permission):

- Accordius

- AMP

- BT Panorama

- Cameron Harrison Private

- Colonial First State

- EC Pohl & Co 

- Elston

- Implemented Portfolios

- IOOF

- Macquarie

- Mainstream Group

- Mason Stevens

- Marcus Today

- NAB

- Netwealth

- Praemium

- Ralton Asset Management / Copia Partners

 

 

CLICK HERE TO DOWNLOAD PDF VERSION;

IMAP Contacts

Toby Potter, Chair

(P) 0414 443 236
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Jane McIlroy, National Marketing & Events Manager
(P) 0411420180
(E)  
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Millimans Contacts

Wade Matterson, Practice Leader

(P) 0410 443 630

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Winter 2018 Perspectives

The latest edition of IMAPs quarterly magazine "Perspectives" is now available in PDF format for you to download

Click here to download the Winter 2018 edition.  

winter2018cover

Please send your comments or inquiries to:

Toby Potter, Chair

P: 0414 443 236
E: This email address is being protected from spambots. You need JavaScript enabled to view it.


Jane McIlroy, National Marketing & Events Manager
P: 0411 420 180

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Autumn 2018 Perspectives

The latest edition of IMAPs quarterly magazine "Perspectives" is available in PDF format for you to download

Click here to download the Autumn 2018 edition.  

 

 

Please send your comments or inquiries to:

Toby Potter, Chair

P: 0414 443 236
E: This email address is being protected from spambots. You need JavaScript enabled to view it.


Jane McIlroy, National Marketing & Events Manager
P: 0411 420 180

E: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

IMAP / Milliman Latest Managed Account FUM Census as at 31 December 2017

 

Managed Account Funds Continue to Grow Substantially 

IMAP (The Institute of Managed Account Professionals Ltd) in conjunction with Milliman a (global actuarial firm) has released the latest data in its 6 monthly Managed Accounts FUM Census series. 

As at 31 December 2017, FUM in Managed Accounts stood at $57.05 bn.

This balance represents a six month increase of $9.08 bn (or 18.9%) on the 30 June 2017 FUM total of $47.97 bn.

For the 12 months “year on year” period this represents an annual growth rate of 45% or $17.87 bn in FUM.
 

The split between types of managed accounts follows:

Managed

Account Category

31 Dec 2017

($ billions)

30 June 2017

($ billions)

Incr / Decr $

($ billions) Jun to Dec 2017

Incr / Decr %

($ billions)
Jun to Dec 2017

31 Dec 2016

($ billions)

SMA / MIS 

$17.04

$13.90

$3.14

22.59%

$12.36

MDA services

$25.47

$23.37

$2.10

8.09%

$16.72

Other services

$14.54

$10.70

$3.84

35.88%

$10.10

Total

$57.05

$47.97

$9.08

18.93%

$39.17

 

Toby Potter Chair of IMAP said “$1.7 billion of this increase has come from companies who have beenadded to the census, but the over half of the increase is organic growth as advisers increasingly view Managed Account services as their preferred service model for a certain client segment.”

Wade Matterson, Milliman’s Practice Leader – Australia, estimates 41% or $4 bn of the increase can be attributed to very buoyant investment markets with the value of the ASX / S&P 200 Accumulation Index increasing by 8.37% over the 6 months period. “This compares with a 1% or $0.39bn market growth factor in the previous 6 months” says Matterson

Mr. Potter says “We estimate that $3.37 bn of the increase is due to inflows of new funds from existing participants growing their Managed Accounts business, compared with $4.4bn in previous 6 months period. Totalled for the past 12 months gives a figure of $7.88 bn new funds inflow for 2017”

To compare the growth rate of managed accounts with other financial services in the retail market, IMAP compared it with the Master fund data over the same period (provided to IMAP courtesy of Strategic Insight).

Strategic Insight’s statistics shown a net inflow of funds in their Masterfunds, Platforms and Wraps Survey of 2.78% or $21.31 bn of FUM to $ 821.4 bn for the period June 2017 – December 2017 compared to managed accounts $7.77bn. “It’s directly relevant to compare managed accounts with the Platforms and Wraps Study as these are both principally vehicles by which advisers implement their recommendations” said Potter. “There is of course a very high degree of crossover – managed accounts operated on platforms - but it shows that in a market generally characterised by low growth, Managed Accounts are the most vibrant area.”

“Forty two companies participated in the latest Managed Accounts FUM Census ranging from the very large (major platforms and banks) and MDA Providers to individual licensees who largely operate their service internally,” said Potter.

 

IMAP wishes to expressly thank all census contributors - a number of whom are listed below (by permission):

- Accordius

- AMP

- BT Panorama

- Cameron Harrison Private

- Colonial First State

- EC Pohl & Co 

- Elston

- Implemented Portfolios

- IOOF

- Macquarie

- Mason Stevens

- NAB

- Netwealth

- Praemium

- Ralton Asset Management / Copia Partners

 

CLICK HERE TO DOWNLOAD PDF VERSION;

IMAP Contacts

Toby Potter, Chair

(P) 0414 443 236
(E) This email address is being protected from spambots. You need JavaScript enabled to view it.


Jane McIlroy, National Marketing & Events Manager
(P) 0411420180
(E)  
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

IMAP Managed Account Solutions Handbook 2018

Download IMAPs "Managed Account Solutions for advisers and their practices".  

For a free copy click here.

Managed Accounts give advisers the opportunity to manage clients' portfolios themselves or through using carefully selected investment managers. They are an infinitely more efficient and scalable way for advisers to build and support a wide number of portfolios.

The Handbook features:

Understanding the Managed Accounts Choices

Why Advisers are adopting Managed Accounts

Benefits for Licensees

How Managed Accounts Achieve better client outcomes

Combining Managed Accounts

Fees and Charges

The Importance of an effective communications plan

Migrating to a Managed Account program

Nov 2017 FPA Congress and IMAP's Managed Account Central Expo

IMAP is again participating in the FPA CONGRESS being held this year in Hobart, TAS on 22 - 24 November 2017 with the "Managed Accounts Central Expo"

Managed Accounts Central brings together a group  of important participants in the managed account industry to provide a great opportunity for financial advisers, dealer groups and other stakeholders to talk with service providers, view the latest offerings and discuss challenges, opportunities and learnings from implementing and growing managed accounts as part of the adviser solution mix.

Contact us

Email
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Address
Level 2, 22 Pitt Street Sydney NSW 2000