A managed account is a professionally managed model portfolio of investments. It provides investors many of the benefits of direct ownership, while having the advantages of a professional investment manager who actively reviews and rebalances the portfolio based on the strategy and investment decisions of the chosen portfolio manager. A managed account may comprise direct equities, exchange-traded funds (ETFs) and managed funds, generally combined in a diversified portfolio.
There are two ways to access managed accounts: MDAs and SMAs.
An MDA service (Managed Discretionary Account) allows you to own a model portfolio with a pre-determined investment objective through your adviser. Your adviser does not need to obtain instructions from you for each transactional change, provided they keep within the investment objectives in the service agreement – saving you time by delegating portfolio management to your adviser.
An SMA product (Separately Managed Account) is a portfolio or model offered as a product with a product disclosure statement (PDS). Its structure provides more flexibility to customise portfolios tailored to investors' specific goals and objectives. An MDA service is managed by your adviser in conjunction with an investment professional; an SMA product is managed solely by a professional portfolio manager. Under both, the discretion to make changes to a portfolio resides with the investment professional, not the investor.
The fact sheet sets out five key benefits of a managed account: responsiveness to market changes through dynamic asset allocation, professional investment managers dedicated to your objectives, transparency to track your balance and holdings at any time, retained ownership of the underlying assets for tax efficiency, and cost efficiency through aggregate purchasing power.
Download the fact sheet below for the full comparison between managed accounts and a discretionary model.
Download the Understanding Your Managed Account Fact Sheet (PDF)