Personalisation

An important feature of managed accounts is that they can be personalised and tailored to an investor’s individual goals, needs, risk profile and account balance.

According to Russel Investments Tanya Hoshek, clients are now used to the personalisation of many everyday transactions, via online providers such as Netflix and Amazon.

“They are also increasingly demanding more personalised investment solutions,” she says.

“Advisers need to be able to provide this personalisation in an efficient and scalable way. That’s where managed accounts really come in.

For example there might be some clients who have strong environmental, social and governance (ESG) beliefs. For them it is possible to add or remove specific assets in their managed account to help them achieve their goals.

Netwealth’s James Mantella agrees.

“Clients might not want to invest in a certain strategy or a certain type of investment,” he says.

“There’s also the scenario, which happens quite frequently, where you might have a director of a listed company who cannot trade in the stock of their own company. With a managed account, we can exclude certain holdings to ensure they’re meeting their obligations as a director.”

It is important to note that personalisation options differ between technology platforms and some are more feature richer than others. Also, by overlaying client specific personalisation rules to the managed account, its portfolio construction as designed and implemented by the investment management is being changed, which may lead to additional costs and inefficiency.