netwealth attracts 100 accounts with SMA


By Julie May

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Since netwealth launched its managed account service less than two months ago, scores of accounts have been opened for clients, with a handful of advisers also opening personal accounts to test out the product offering, which was, for many, still a relatively new concept.

Speaking to financialobserver yesterday, the group’s joint managing director, Matt Heine, revealed 100 accounts had been opened and that was tracking to expectations.

“As is the case when you’re launching any new product, education is a key component and we’re really finding that is a major factor in the roll out of managed accounts,” he said, adding the business was spending time with advisers, licensees and in-house research teams to explain the concept, the structure and the reasons behind the selection of underlying managers.

Heine said netwealth had been looking to offer a managed account service for many years, with the decision to go live with what was specifically a separately managed account (SMA) offering, something the business had been working on for about 24 months.

“We launched in April with access to four managers and 10 models, and expect to launch new options over the next three to four weeks,” he said.

Currently, the netwealth SMA gave access to managers including UBS, Ralton Asset Management and Bennelong Funds Management, with Ibbotson Associates overseeing a range of netwealth options.

“We’re talking to a long list of model managers at present which include a range of well-known brands, and have a number of private labels we hope to have completed by July,” Heine said.

He previously indicated, as part of a wider managed accounts service play, and separate to the netwealth managed account offering, that the group would roll out a private label service to licensees looking to offer their own model portfolios where they had in-house investment expertise.

“We’re talking to around 15 groups and we expect four will be live by 1 July,” he said, adding Lonsec was an important part of netwealth’s due diligence process.

Because netwealth was the responsible entity, its approval criteria were very stringent, so the private label offering would only be available to select groups.

Meanwhile, at a business partners update in Sydney last week, Heine said the managed account service had been a huge build and one of the group’s biggest product launches since it started.

He said the group initially looked at managed accounts seven years ago, but there had never been a compelling reason to put the resources into launching something until two years ago when it noted a groundswell of support on the back of things such as the Future of Financial Advice reforms.

“In the meantime, we’re looking to launch a number of global models early in the third quarter,” he said.

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