Investments, Portfolio Construction

BT reports strong SMSF managed account appetite

Around one-quarter of all managed accounts opened on the BT Panorama platform are through SMSFs, while funds under administration (FUA) on BT’s broader Panorama managed accounts solution have jumped 250 per cent year on year.

BT product development national manager Russell Brinckley said 20 per cent to 25 per cent of managed accounts were opened through SMSFs, while there are nearly 2000 SMSF accounts currently on Panorama under managed accounts.

“Predominantly most of their portfolios are listed Australian securities and a mix between large-cap Australian equities and listed property investment, but we’re seeing a growing trend of SMSFs using diversified portfolios,” Brinckley told selfmanagedsuper.

BT said 27.2 per cent of total FUA across all managed accounts was SMSF clients’ funds as at 30 September.

Brinckley said BT research showed the appeal of managed accounts for SMSFs is mainly due to access to direct equities, through which they can be exposed to franking credit benefits.

“But what they’re using a managed account for primarily is access to the professional investment management,” he said.

“So they don’t have to select the stocks themselves, which a lot of them do like and they can still do that on Panorama. But for their core equity portfolio they’re selecting a professional SMA (separately managed account) to give them the Australian equity exposure.”

He said while managed accounts were available largely to wholesale high net worth SMSF investors, the availability of managed accounts to SMSF investors with smaller balances has resulted in increased demand.

“With the advent of them being more readily available on platforms instead of stand-alone solutions, it means the mass affluent or the more normal balanced, advised, average portfolio balance-sized clients are able to access managed accounts platforms now like Panorama,” he said.

According to the Investment Trends “Managed Accounts Report” released in February, 71 per cent of all advisers currently use managed accounts for their clients, with plans to increase this over the next three years.

Advisers said their clients value managed accounts for their transparency (64 per cent), diversification (59 per cent), direct ownership of shares (49 per cent), access to professional managers (49 per cent) and cost effectiveness (47 per cent).

In the past 12 months, BT has launched seven licensee SMA arrangements, contributing $241 million in new flows.

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