Global asset manager Russell Investments has launched a range of multi-asset managed accounts centred on a core of Australian equities and matched to four risk profiles typically used by advisers with clients.
The new managed accounts will be made up of three components – direct Australian shares, unconstrained multi-asset strategies and exchange-traded funds (ETF) – and will use dynamic asset allocation and active management alongside passive management and factor investing to provide diversification at a lower cost.
The four portfolios will include a conservative option focused on income generation and low volatility and 30 per cent growth, a diversified option with a mix of income and growth assets focused on 50 per cent growth and medium volatility, a balanced option focused on 70 per cent growth, and a growth option with higher volatility and 90 per cent growth.
Each option will cost 0.65 per cent a year and has been developed in response to adviser and investor preferences for more transparent, actively managed, lower-priced investment solutions.
Russell Investments Australia managing director Jodie Hampshire said the advisers currently had to choose between highly active managed accounts with a premium pricing structure or low-cost passive managed accounts.
“This next-generation multi-asset managed account fills a key gap for Australian advisers providing a dynamic core at a cost-effective price,” Hampshire said.
“Dynamism is important in today’s investment environment. However, it isn’t about tactically adjusting on a regular basis, but instead it’s about having a rigorous process in place to identify risks and opportunities, coupled with the capabilities to respond rapidly to new information and act on it in a timely fashion.
“While our managed portfolio solutions are designed around specific investment outcomes, the real value of an adviser lies in helping investors achieve their financial goals – not tracking or beating a benchmark.”
The comments were made as the manager also released the findings of its second annual “Value of an Adviser Report”, which found good financial advice can contribute at least 4.4 per cent a year to the value of a client portfolio.
Hampshire said the report looked holistically at the work carried out by advisers on behalf of clients and that work around annual rebalancing, preventing behavioural mistakes, planning and additional wealth management services, and tax-smart investing led to the value identified in the report.
“Over the past 20 years, we’ve worked with top advisers around the world including the US, Canada, UK and Australia. This report reinforces the value of advisers, which goes beyond investment-only advice and is derived from both the technical and emotional guidance they provide. For this reason, we believe advisers have never been more valuable in Australia,” Hampshire said.
“The overwhelming majority of clients in Australia do benefit from quality advice. Our report offers a memorable and repeatable framework to assist advisers in clearly and confidently demonstrating the value they deliver to clients.”
