Managed Accounts expanding service network


by Lelde Smitts

Transcription of Finance News Network Interview with Managed Accounts Limited (ASX:MGP) CEO, David Heather

Lelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from Managed Accounts (ASX:MGP) is its CEO, David Heather. David welcome to FNN.

David Heather: Good to be here.

Lelde Smits: Managed Accounts is about to debut on the Australian Securities Exchange. What services does the Company offer?

David Heather: Managed Accounts is a specialist managed accounts provider. So rather than take a generic solution to the advisory market like a lot of other providers in the space, we build bespoke solutions for individual groups, customised to their particular needs. So it may be that they need specific types of assets included in portfolios that they want to run themselves. Or it might be that they want to outsource to specialist managers that they want to choose themselves. It might be that they want to run their own fee structure, or their own branding through the structure. So very much a customized look and feel for each advisory group, who wants to use our service.

Lelde Smits: Now the Company claims to be one of the largest MDA service providers in Australia. What is the value of your funds under management?

David Heather: Look at December we had $900 million under management. Now since December, we’re now three months into the New Year, the growth has continued. So we’ve got a little bit of work to do to get to our June target, but we’re certainly on track to deliver that.

Lelde Smits: And David, could you give us an example of how the companies work with licensees and customers adds value?

David Heather: Look from an adding value perspective from a licensee point of view, Managed Accounts certainly reduced the administration burden that every licensee has, in managing client portfolios. In addition to that, the ability of the client to actually be moved into different assets, without a need to get records of advice. Certainly also improves the compliance efficiency of a business and de-risk the business, to be honest, from a compliance angle. 

From a client perspective, certainly a client can get better portfolio outcomes through a managed account, purely by virtue of the fact that the client’s portfolio can be acted upon by an investment manager, without the client needing to be getting involved. And that’s an important piece of the puzzle when we’re talking about investment management. But in addition to that, reduced paperwork those types of things, are also great benefits for the client.

Lelde Smits: Moving to SMSFs, what role does the Company play in the rapidly growing self-managed Superannuation Fund environment?

David Heather: Look a lot of our licensees are focused on servicing high net worth clients and also self-managed clients, as a result of that high net worth focus. So about 70 per cent of our in-clients are self-managed funds. So to that end, we’re obviously facilitating a better portfolio outcome for those self-managed funds, through their adviser. In addition to that we have a range of different features in our solution, which are very much customised to benefit self-managed funds. And in addition to that, we have a range of features in our solution that enable the licensees to gain benefits from managing self-managed funds. Be it simplified administration through data feeds, be it annual audit reports, which reduce costs to the client.

Lelde Smits: Finally David, as Managed Accounts progresses toward listing, what are your plans for growth as a publicly traded company?

David Heather: Well there’re probably three areas that we focus on in this area. First of all there’re a number of clients that we have actually using our service, when I say clients – advisory groups. Secondly is the funds under management and the third is the profitability of the business, of course. So if we talk about the number of groups that are coming on to use our service, we’ve currently got 21 licensees. But we’re aiming to grow that to 26 by the end of June and certainly that continues to grow into the 2015 year. And at this point in time we’re on track to deliver the 26, which is great.

In terms of funds under management, I mentioned previously that we had some growth since December. Certainly that’s on track to deliver our target this year of about $1.05 billion. And certainly going into 2015, our target’s increased to about $1.5 billion. But I think the number of the groups we’ve had coming on in more recent times, are going to be certainly underpinning that $1.5 billion number. In terms of the third thing profitability, we’re certainly on track to deliver the profitability we’re targeting this year. And also that will fit into next year.

Lelde Smits: David Heather, thank you for the introduction to Managed Accounts.

David Heather: Thank you again for your time.