How managed accounts create more strategic client conversations

Smart practice

Wednesday 09 August 2017

Build a stronger, more productive relationship with your clients

Managed accounts offer many benefits to a financial advice practice, including efficiencies and scalability. But where managed accounts really add value is how they fundamentally change the conversation, lifting it up from trading and stock stories to a more strategic focus where clients are highly engaged – and advisers are able to play to their strengths.

Trade approvals kept the conversation about administration

In the days before managed accounts, the process to make changes to a client’s portfolio was slow, cumbersome and required hours of back office administration. The process not only involved mountains of paperwork, it also meant that the vast majority of advisers’ interactions with clients were around tedious paperwork issues. Clients could be forgiven for wondering what they were paying ‘an expert’ for, if they kept being bothered with micro decisions.

The conversation can reflect on whether the portfolio as a whole is delivering the desired outcomes.

More subtle, but equally as problematic, the focus on stock selection and trade execution decisions kept the client conversation at the wrong level. The focus was always on “How are our investments performing?” not the more strategic, and ultimately more helpful, “How are we tracking against our goals?”

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Managed accounts allow a more strategic focus

With managed account solutions, depending on whether you buy, partner or build, the investment process is either performed in-house or outsourced to fund managers or research houses, and the rebalancing is performed by the platform. Regardless, advisers no longer have to spend time on fund or stock selection, enabling them to be more proactive and have much more compelling conversations with clients.

How to make managed accounts work in your financial advice practice

Managed accounts are a good solution for busy clients who want to set their investment objective and not be contacted for every change. Your conversations with them can now focus on up-coming trends, new ideas and achieving their goals, rather than explaining every individual trade or timing decision. It’s a different discussion and a different relationship.

Various elements of managed accounts support this more strategic conversation:

  • Transparency – Together, you and your client can view the assets that form their portfolio. You can see performance and valuations, review dividends and associated franking credits for shares, managed fund distributions and see all investment trades and any fees and costs. The conversation can reflect on whether the portfolio as a whole is delivering the desired outcomes.
  • Portability – Managed accounts give your clients flexibility. Assets may not need to be realised if they’re moved. So, clients can take the portfolio with them, transfer assets in, or switch between portfolios easily. It’s simply the investor’s individual tax position that determines the tax outcome of their investment.

Managed accounts have an investment discretionary structure that removes the hassle associated with having to approve individual trades. Having signed up to their objective, your clients can sit back with the confidence that their investments will be managed professionally to meet their goals.

This positions you, the adviser, as a specialist, with more time to provide in-depth investment advice and have more strategic conversations with your clients. You’ll be able to help them make well-informed financial decisions, creating a path to reach financial success and security in the future.

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