JBWere flags more SMAs on more platforms

Majority of potential users want access to international equity SMAs.


By Julie May

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National Australia Bank (NAB)-owned business JBWere has revealed it is only months away from launching its first international equities separately managed account (SMA) model portfolio, which will take its suite of offerings from seven to eight.

Speaking at a media briefing yesterday, group chief investment officer James Wright and investment services executive director Andrew Tracy said research undertaken with Investment Trends showed almost 70 per cent of potential SMA users wanted access to an international equity SMA.

The pair acknowledged that JBWere was also in talks with other platform providers about increasing the distribution of its SMA model portfolios.

Wright said JBWere was in discussions with Mason Stevens and BT Financial Group, which this year added managed account portfolio capabilities to its Panorama platform, while existing JBWere offerings were currently only available via Macquarie, MLC, OneVue and Praemium platforms.

Tracy said that securing a position for products such as SMA model portfolios on platforms was a more time-consuming exercise than getting on approved product lists, and adviser demand was a key factor in how quickly this could be achieved.

Both executives said the SMA sector was on the cusp of being a very strong growth market as it provided greater efficiencies for advisers and improved compliance for dealer groups, and at the same time enabled clients to access professional investment management but with the transparency and low cost of direct investments.

Wright highlighted that investor SMA use had rapidly risen to the highest level on record, with 20 per cent of planners now using SMAs as part of a client investment portfolio, with 23 per cent looking to start using them in the next two years.

“The prime drivers of this growth are education, combined with substantial administrative pressures advisers face post the Future of Financial Advice reforms,” Wright said, adding 48 per cent of planners were not interested in further direct share investing owing to the administrative workload.

“Stock selection, portfolio rebalancing, administration and after-market support are outsourced to the manager of the SMA, as well as responsibility for handling of corporate actions.

“This means there is no need to provide clients with individual statements of advice every time the composition of the portfolio changes.”

Looking ahead, JBWere identified the two key barriers to further SMA growth would be education and availability.

“The addition of SMAs to more of the major dealer group platforms should drive a surge in investor take-up,” Wright said, adding 11 platforms now provided access to SMAs, up from seven in 2014.

Meanwhile, NAB announced last month that three SMAs added to its MLC Wrap and MLC Navigator platforms had reported a combined intake of more than $7 million since their launch in May.

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