Australia's Managed Accounts Sector Boosted By ASIC Ruling - Trade Body

Tom Burroughes

14 August 2014

A recent ruling by Australia’s financial regulator will boost development of managed accounts in the country, the trustee can be treated as a wholesale client. The regulator’s move means an SMSF trustee is wholesale client if a certificate is available from a qualifying accountant that the trustee has net assets of A$2.5 million ($2.3 million) or income of over A$250,000 for two years.

Toby Potter, Chairman of IMAP said “The general tests include an income test - A$250,000 for the past two years- or a net assets test, A$2.5 million (not including superannuation). Many trustees will meet one of these tests, enabling them to be classified as wholesale clients. They can therefore be offered a wholesale MDA service,” Toby Potter, chairman of IMAP, said.

“This will substantially reduce the compliance burden for advisors who have previously hesitated about offering MDA’s. The result is likely to be a significant improvement to the quality of portfolio management offered to this type of investor.” said Potter.

A number of large financial institutions in Australia provide managed accounts…….such as Macquarie, ANZ and Westpac.

Managed accounts, a personalised portfolio service, typically allow clients to delegate day-to-day investment decisions to investment professionals.