When ASIC released the update in the Class order in September 2016, it gave advisers who had been using the No Action letter, a two year transition period to move to an alternative approach to providing their services to advisers.
For many advisers, 24 months would seem like plenty of time to transition, but half of that time has now been used up and it’s only now that many advisers are seriously considering their preferred course of action.
The choices available to them are varied and below are the questions that advisers and licensees should ask themselves when assessing the options. Of course, some options require organisational expertise, which may not currently be available to every adviser or licensee.
Managed Account Options
- Dealer models on your preferred platform – Can your portfolio models be duplicated by your preferred platform’s SMA program in a licensee specific program?
- MDA Provider – Do you have the organisational competence to be authorised as an MDA Provider? Can your preferred platform support the operation of an MDA with your models
- Platform SMAs – Do you want to increase your APL with a number of SMAs on your preferred platform? Can you construct models of these?
- New Platform – Would a new platform that provides the managed account service you want, be better for your business?
- Dealer MDA Models – If your licensee adopts an MDA approach, are the models they offer consistent with the advice approach you want for your clients?
Improved Advice Service Options
- ROA Automation – What are the automation features of your approved platforms? Do they offer sufficient automation of the ROA process?
- New Licensee – For advisers, whose choice of managed account service is controlled by their licensee, should they change to a licensee whose investment choice better suits their advice model?
- Standard Advice – Can you or your advisers revert to an ‘advice only/ROA’ service model? This might include SMAs.
- Wholesale – Does your client base support a ‘wholesale only’ approach?
- MDA Adviser – Can you partner with a specialist MDA Provider to offer your models and advice on their service?
- Third Party SMA RE – Is there an external RE for an SMA program on your preferred platform? What would this require of you?