Managed accounts could provide a suitable option for Generation X and Y investors, who often require more control over their investments, according to the new head of a leading fund manager.
Perpetual chief executive, Chris Ryan, said evidence across these age groups show that they struggle place their faith in the financial services sector and need a greater level of reassurance when making investment decisions.
“They don’t trust the system,” he told the audience at the recent re-launch of the Institute of Managed Account Providers (IMAP). “They want advice, they want to be given good advice, but then they want to participate in the outcomes – and that’s what managed accounts from a financial services point-of-view allow these people to do, and we’re seeing that around the world.
“[They are saying,] ‘I want advice, but I want to hold my adviser more responsible for the advice they are giving me’. I want to see clearly the outcomes of my portfolio and I want to be able to attribute that back to the advice the adviser is giving me.”
He said managed accounts provide the transparency that allows the client the control, and also allows the adviser to more clearly demonstrate their value-add because there are less layers inside the portfolio.
Commenting on the relationship between managed accounts and managed funds, Ryan said the two should be considered as complementary. “Managed funds are a big part of our business at Perpetual, it’s a big part of the Australian market, and they will continue to be strong,” he added.
“Good managed funds will survive, but I think average managed funds will find it tough in the next 10 years.”
The audience also heard from IMAP chairman Toby Potter, who said the decision to re-launch the institute was taken in order to meet industry demand.
“IMAP is intended to be a forum where advisory groups, individual advisers, platform providers, technology providers, investment managers, custodians can actually get together and start consider their responses to what has become a very significant new emerging force,” he said.
