The corporate regulator released yesterday an updated regulatory guidance on its relief for MDAs. This includes a number of modifications, such as additional disclosure for custodial, fee and termination arrangements.
Adam Seccombe, Implemented Portfolios chief of product, marketing and distribution, said the decision to revoke the limited MDA no-action letter provisions will have broad benefits on the sector.
“The removal of no action letters will drive greater professionalism as discretionary managed account providers will need to comply with higher hurdles of technical proficiency to deliver managed portfolio services to retail investors in Australia,” he said.
Meanwhile, IMAP chair Toby Potter said the new guide is “easy to read” and will encourage more advisers to take up MDAs.
“ASIC has recognised that managed accounts are operated in many ways and the new regulatory guide recognises this in allowing multiple modes of operating,” he said.
IMAP also welcomed the termination of limited MDAs.
“ASIC indicated that it will give some consideration to the experience gained in operating a limited MDA service for those who apply to be fully fledged MDA providers,” Mr Potter said.
“The approach to adviser’s best interests obligations, which ASIC developed in the FOFA legislation, comes out very clearly in this new document.”
