According to a white paper, titled The cross-generational appeal of managed portfolios, Hub24’s managing director, Andrew Alcock, said the benefits of managed portfolios include those associated with direct asset ownership and transparency, which appeal to newer generations.
“Managed portfolios are becoming increasingly popular with a cross section of investors, from younger Gen X and Gen Y investors who would normally lack the confidence to select particular stocks themselves, through to more sophisticated Baby Boomer investors,” Mr Alcock said.
“Younger Gen X and Gen Y investors are typically time-poor and tech-savvy. They are looking for more transparent alternatives to managed funds that enable greater engagement with individual securities, but with more professional insight than if they were to select and invest in equities themselves.
“The broad appeal has meant these younger investors, who typically have a smaller pool of funds to invest than an older investor, are accessing managed portfolios as a logical way to start their investment journey.”
Mr Alcock added that managed portfolios are known for having greater flexibility, cost reduction, transparency and better control of tax outcomes, in addition to the comfort that a professional manager is making investment decisions on a client’s behalf.
Further, they offer lower administrative costs as well as a reduced compliance burden for advisers, he said, and can be monitored on a day-to-day basis.
“Managed portfolios are a great fit for [SMSFs], with SMSF trustees typically look for greater control, choice and transparency of assets. Managed portfolios combine attractive features of both direct investment and traditional managed funds,” Mr Alcock said.
