Consistency and timeliness Managed accounts add a level of consistency and reliability to the investment management process in ways that previously were not as easy or cost-effective. With managed accounts, clients know what to expect and are clear about the investment proposition. All clients are also treated equally, without regard to the size of their investment. For example, during a period of volatility – when advisers need to provide timely advice to all of their clients and may need to change all of their portfolio positions quickly – there would traditionally be a starting point. Some advisers might work through their wealthier, more valuable clients first, before addressing the needs of the broader client book. For an advice business that has hundreds of clients, this is not possible to achieve in a short period of time. However, with managed accounts, all clients are treated equally from an investment perspective, irrespective of their wealth. The advice firm can provide a consistent investment experience to each client. According to Vincent O’Neill, managed accounts enable Stanford Brown to implement investment committee determinations through to client portfolio positions quickly and consistently. 1 Driving superior client outcomes with managed accounts
Case study – managed accounts in times of volatility Periods of social, economic and financial volatility, such as the one experienced in 2020 with COVID-19, can be challenging for financial advisers and their clients. James Mantella, Netwealth’s Head of Managed Investments Products, says, for example, that the number of transactions processed by Netwealth increased exponentially at the beginning of the COVID-19 crisis. “During January/February 2020, we averaged around 2,000 trades a day. In March, we did over 42,000 in a single day,” says James.
Netwealth Managed Account daily trade volume (buy/sell) March/April 2020
45,000
7,000
ASX All Ordinaries daily open price
42,626
6,501.3
Sell trades
40,000
Buy trades
35,000
5,542.5
4,854.3
6,000 5,000
30,000
4,000
25,000 18,008
20,000 15,170
15,000
3,000 8,828
2,000
10,000 1,000
5,000 0
02/03 03/03 04/03 05/03 06/03 09/03 10/03 11/03 12/03 13/03 16/03 17/03 19/03 20/03 23/03 25/03 27/03 30/03 31/03 01/04 02/04 06/03 07/03 08/03 09/03 14/03 15/03
0
2020
Netwealth. Managed Accounts during volatility and beyond
07
