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Compliance issues fast-tracking use of managed accounts

New research has found that the proportion of financial planners who recommend managed accounts has doubled in the last five years.

In Investment Trends’ annual Managed Accounts report, the number of planners who now recommend managed accounts has jumped from 22 to 44 per cent, while a further 26 per cent are considering or are intending to start.

The firm’s head of research, Irene Guiamatsia, said the uptake comes on the back of the impact of the COVID-19 pandemic and growing compliance issues.

“Uptake of managed accounts had steadily crept up since 2012, and COVID-19 acted as an accelerant,” Ms Guiamatsia said.

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“Managed accounts are fast becoming a mainstream solution for Australian financial advisers.

“Compliance is the top challenge faced by financial advisers in the day-to-day running of their business, with direct implications for profit margins.

“The ability of managed accounts to alleviate these issues has certainly contributed to their rising adoption.”

Managed account users were predominantly positive about their experiences despite market volatility and business disruptions throughout 2020, with most advisers rating transaction speed/quality as‘good or very good (88 per cent).

“The positive impact of managed accounts on advisers and their clients during COVID-19 is possibly the most powerful testament to the role they can play as a backbone for advice businesses big and small,” Ms Guiamatsia said.

Compliance issues fast-tracking use of managed accounts
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