When setting out to establish a managed account solution for your business, you need to be aware that there are different flavours or business models that managed accounts can support.

These range from basic off-the-shelf managed account models, where the managed account is something similar to a managed fund investment solution but with greater client transparency and businesses efficiencies, all the way through to a private label managed account solution. In this instance, the managed account can provide a number of innovations to your business, from business model innovation through to improved operating processes and enhancements to your supply-chain arrangements. 

Below we explore a number of the different flavours of managed accounts offered by Netwealth.

Off-the-shelf managed account

Netwealth has constructed a range of carefully selected single asset class and diversified managed accounts for advisers to use with their clients. The key elements of this solution are:

• Managed accounts are available to all clients within super (Super Accelerator) and investment wrap (Wealth Accelerator) accounts – so they can be used for super, SMSF and non-super monies
• A hand-selected choice of leading investment managers and investment strategy options ranging from ASX20 index, ASX 200 shares, small and mid-cap shares, Australian listed debt, diversified dynamic portfolios, Australian equities with a focus on yield and international equities
• Clients can experience the full benefits of ownership of the underlying asset holdings, tax advantages over managed funds and the cost benefits of trade netting.

Pros

• Enhanced value proposition for clients via improved transparency.
• Increased efficiency to your advice practice.
• Superior risk management over adviser directed portfolio management.
• No additional regulatory or compliance administration for your business (as the managed accounts are constructed under the Netwealth license).
• Can be accessed without additional cost to your business.
• No investment expertise to develop or outsourced investment managers to employ.

Cons compared to a private label solution

• No ability to utilise your own investment expertise or outsource to preferred investment managers.
• No opportunity to move up the value chain and generate investment manufacturing margin.
• Limited ability to leverage your own brand as part of the managed account value proposition.

Private label managed account

Netwealth’s private label managed account solution offers your business a fully branded investment solution. The key elements of the solution are:

• Netwealth uses the Responsible Entity (RE) authorisation on its AFSL
• As RE, Netwealth will effectively outsource the development of managed account investment models to your business, you can then construct and manage a suite of managed account model portfolios (or work with an asset consultant to achieve this if you like)
• The managed account model portfolios would then be available as investment options within the private label managed account for your advisers using the Netwealth platform
• As RE, Netwealth will conduct full due diligence on the investment manager (including any consultants) and perform all other regulatory requirements associated with offering a managed investment scheme.

 Pros compared to an 'off-the-shelf' solution

• You control the investment products offer (with agreed RE mandates).
• You are able to generate investment manufacturing margin for the construction and ongoing investment management of the managed account models.
• Managed accounts will be delivered through your own branded platform experience.

Cons compared to an 'off-the-shelf' solution

• Additional business costs associated with the implementation and ongoing management of the managed account investment models.
• Longer implementation cycle due to a higher due diligence requirement by the RE.