The appeal of SMAs are growing because of their ability to connect specialist investment managers and financial planners in a “much tougher market” than several years ago, Andrew Varlamos, commercial director of Praemium told InvestorDaily.
Mr Varlamos also said he believes SMA platforms will become more mainstream, despite being regarded as “relatively peripheral boutique offerings” to date, as Praemium gets closer to $1 billion in funds under administration.
His comments come in light of Praemium announcing the addition of nine new model portfolios to its SMA investment administration platform, the Customised Portfolio Service, adding to the approximately 100 existing models on the platform.
The popularity of SMAs are growing in the stockbroking space because they are a means by which brokers can target market segments that they may otherwise not be able to reach through the traditional broking model, according to Mr Varlamos.
“[The] investment management expertise of the broker can be distributed using a platform to a whole market of financial planners around the country,” said Mr Varlamos. “So it’s an intermediated solution.”
Mr Varlamos added advisers using the SMA platform value the “diversity and openness of the investment menu” without having to deal with administration and compliance concerns.
