ACBC unveils CIO, braces for SMA expansion

08-Jun-2017

By Daniel Paperny

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Australian Corporate Bond Company (ACBC) has promoted Ian Martin to the newly-created position of chief investment officer as the company positions itself for further growth and product innovation.

Martin was a co-founder and currently an executive director of the business, which launched its flagship exchange-traded bond (XTB) products to market two years ago.

The announcement was a response to rising market demand for tailored fixed income model portfolios and separately managed account solutions, with Martin tasked with enhancing ACBC’s market penetration among dealer groups, platforms and asset consultants, as well as institutional clients.

Currently, ACBC has seven model portfolios for advisers and individual investors based on SMAs and managed discretionary accounts (MDA).

Speaking to financialobserver, ACBC co-founder and chief executive Richard Murphy said the company was looking to expand its product range, with another SMA offering set to be launched later this month.

“Technology has enabled new ways to do portfolios of funds and we see SMAs as an increasing part of the solution for advisers and their clients,” Murphy said.

“We’re obviously moving from putting out XTBs and letting advisers and brokers choose them based on individual bonds to putting out our own model portfolios based on SMAs and MDAs … so it made perfect sense to introduce the role of CIO for our business.”

He noted that while SMAs were not a new development for the industry, their growing momentum among industry participants was being spurred on by advancements in platform technology, which had significantly reduced the compliance burdens and pressures for advisers, as well as reduced the “back-office pressures” for vehicles such as listed securities.

“SMAs have been around for a long time … but the thing that’s really kicked them along was the FOFA (Future of Financial Advice) legislation, which stopped payments going to advisers from product manufacturers and fund managers,” he said.

“Now there’s the ability to do SMAs on platforms, they can in fact be owned by the distributor themselves, which means … they’ve effectively cut out the fund manager altogether … and it effectively replaces the revenue lost to product manufacturers under FOFA.

“Demand for SMAs has been growing among advisers … it’s that growing need for fixed income that has the characteristics that we’re looking for [with our offerings] … listed security SMAs make abundant sense from everybody’s point of view and that’s why our SMAs are very interesting to advisers as well.”

The comments followed an announcement by ACBC in March that it had partnered with Praemium to launch a pure fixed income SMA.

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