Managed Accounts are rapidly becoming the investment structure of choice for many Australian financial advisers and their clients.
When you consider the benefits for both advisers and their clients, it’s no surprise the Australian managed accounts market grew 20% in 2017 to reach $50 billion.
Despite the benefits, there is still some confusion around what they are and how advisers can explain the benefits to clients. We have a range of guides and documents to help advisers transition clients to managed accounts.
When you establish a managed account with a model manager (such as Zenith), you effectively establish a managed investment scheme that operates like any other managed fund, under Australian Corporations Law.
And like a fund, a Responsible Entity (RE) is appointed to oversee the investments of the Scheme. That’s typically a platform such as Netwealth or BTPanorama.
Within the managed account sits your familiar investment portfolio, a collection of funds, equities, SMA’s or ETFs. The portfolio can in fact be the same as before, but what changes is the way it is managed.
The model manager who helped you establish the managed account is now responsible for all the portfolio changes (within pre-determined limits) and reporting these to you.
The gamechanger is that any portfolio tweak is made instantly across your entire managed account client book. No delay between clients, no SOA, no signed paperwork, just efficient execution.
And that gives you more time to talk strategy and plan with your clients.
Industry regulators such as ASIC and platforms are demanding greater transparency and compliance rigour.
Investors are demanding more transparency in reporting and seeking investment excellence.
Advice practices are seeking efficiencies and time savings where possible.
Improvements in technology and administration systems.
| Elite Blends | Customised | |
|---|---|---|
| Pre set portfolios |  |  |
| Bespoke portfolios | | |
| Current platforms | Netwealth, BT, Panorama | Client choice |
| Online research | | |
| Monthly reports | | |
| Instant email alerts | | |
| Investment Committee Report | | |
| Client Quarterly Update Report | | |
| Manager fee rebates | Platform specific | |
Elite Blends are Zenith’s best ideas portfolios in a platform-ready format.
There are five Elite Blends portfolios that are based on the same configuration as Zenith’s paper-based model portfolios, which have an eight-year track record of performance.
Elite Blends are suited to advice practices seeking a simple, ready-made solution to launch their managed account capability.
What makes Elite Blends so simple is their existing portfolio structure, placement on major platforms (Netwealth and BT Panorama), track record of performance (based on model portfolio equivalent), comprehensive report pack and the time saved by not requiring a formal consulting process.
| Risk Profile | CusInvestment Objective (% with franking) | Investment horizon (min years) | Estimated volatility - standard deviation (%pa) | Maximum exposure (%) to growth assets |
|---|---|---|---|---|
| Defensive | Cash plus 1.75 - 2.50 | 3 | 3-5 | 20 |
| Moderate | Cash plus 2.50 - 3.25 | 5 | 4-6 | 40 |
| Balanced | Cash plus 3.25 - 4.00 | 6 | 6-8 | 60 |
| Growth | Cash plus 4.00 - 4.75 | 7 | 8-10 | 80 |
| High Growth | Cash plus 4.75 - 5.50 | Over 7 | 10-12 | 100 |
Zenith offers customised managed accounts for a growing number of advice practices requiring a solution that best meets their individual needs.
A customised solution involves building bespoke portfolios that can be diversified or sector specific, covering a range of risk profiles – all designed to meet your specific objectives and preferences
Establishing a customised managed account will generally require a detailed consulting program to ensure the solution is built correctly and gets the right result: that includes working with you to define your needs (and for your clients), objectives and portfolio preferences.
The consulting service that accompanies a customised program also includes an institutional-grade relationship with a Zenith Consultant and our most comprehensive reporting pack available.
Returns: Excellent risk-adjusted performance of Elite Blend model portfolios
Reporting: Comprehensive reporting package for adviser, management and client
Research: Research team and investment consulting under one roof provides edge
Ratings: Quality of Research Voted “Research House of the Year” 20141, 20151, 20161 & 20172
Resources: Large and experienced consulting team that understands adviser practice
Reliability: We’ve worked with platforms setting up RE and managed accounts, providing a simple pathway
Award issuers: 1 Money Management Rate the Raters; 2 Peter Lee Associates
Zenith’s best ideas portfolios, powered by our research expertise to deliver maximum performance with lowest risk possible.
More infoFor 15 years we have been partnering with advice practices to build robust investment capabilities that help clients achieve their goals. We are excited to be offering our expertise through the new frontier of managed accounts.
David Wright
Managing Partner, Zenith Investment Partners
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