Managed accounts are currently the flavour of the month.  In T&C’s recent travels around the wealth management industry we have heard Managed Accounts described as anything from “the experience clients have to have”, to “a universal panacea for advisers looking to replace the ill-gotten gains of pre-FoFA rebates”.

We have also observed that Managed Account service providers use a multitude of expressions to describe what they offer – it’s a veritable dog’s breakfast of labelling out there.

“You say MDA, I say SMA”, “I say IMA, you say UMA”, let’s call the whole thing off!

The simple fact is that Managed Accounts, stripped bare of all the jargon, initiated strategically, and carefully worked-through for all stakeholders, starting with the client’s best interests, are a viable way of creating value for both professional advice practices and for supportive dealer groups.

It’s a pity that the various competing service providers can’t park their differences for a day or two, lock themselves in a dark room, and emerge only once they have crafted a common nomenclature accompanied by a simple, illustrative diagram of how Managed Accounts fit within the regulatory world of Registered MIS, Unregistered MIS, IDPS and Super.

T&C have identified “6 Big Musts” when considering Managed Accounts:

  1. Decide first and foremost what business you want to be in and the client experience that delivers
  2. Decide what parts of the value chain you want to be in/should be in/can be in
  3. Determine and model the revenue/cost trade off and ensure you and your clients are better off in the medium to longer term (you may be taking one step back to take three steps forward and there will be legacy business issues)
  4. Determine and fully understand your risk appetite and profile
  5. Decide up-front how you will apportion any efficiency gain (among all stakeholders including the client and the practice)
  6. Ensure it’s scalable, industrial strength and sustainable.


What follows from the “6 Big Musts” is our “Six Big Questions” any professional planning practice must ask itself before deploying Managed Accounts or changing Managed Account service providers.

Those “Six Big Questions” can be summarised as follows:



  1. How can Managed Accounts fit
    my way of doing business?

• Target market

  • Socio-economic
  • Behavioural
  • Client experience
  • Discretionary v. non-discretionary

• My current business model (advice, portfolio management, portfolio administration, stock selection)

  1. What do I have in place for
    portfolio administration
    (and what’s not in place)?

• Current platform arrangements including grandfathering)
• Platform centric or off platform
• Migration capability/scope
• Scope to take on different administration tasks
• Outsourcing v insourcing
  1. What do I have in place for
    portfolio management
    (and what’s not in place)?

• Portfolio management capability
• Stock selection capability
• Adviser v. house view approach
• Scope to use existing managers
• Outsourcing v insourcing
  1. What am I authorised to do?

• Ease of accreditation/authorisation
• Licence arrangements/dealer services
• Capital adequacy
  1. What and how do I charge?

• Advice
• Portfolio management
• Stock selection
• Portfolio administration
• Bundled/segregated pricing
  1. What cost/resourcing structure
    is in place/not in place?

• Actual efficiency gain/loss

  • Revenue
  • Costs

• Is revenue gain offset by cost gain?
• Apportionment of any efficiency gain


Asking the questions up front and testing likely outcomes against the “must-do’s”, with a strategic and carefully considered approach, gives you half a chance of turning a dog’s breakfast into a meal fit to be served to your valued clients.