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Managed accounts provider replaces Praemium

A managed accounts provider is replacing its Praemium-powered separately managed accounts (SMA) with a new solution, lowering fees.
By · 2 Nov 2018
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2 Nov 2018 · 2 min read
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The following article discusses the launch of InvestSMART's PMAs. Writte  by Kanika Sood, it appeared in the Financial Stardard on 2, November 2018. 

InvestSMART is transitioning about $100 million of client money from its Praemium SMAs to a new professionally managed accounts (PMA) solution.

The fee has dropped from 77bps to 55bps with the change.

InvestSMART head of funds management Alastair Davidson said the move was driven by a need to make investing easier to understand for its clients.

"Implementing an SMA with Praemium proved we could raise money as an issuer," Davison said. "But we think having their money held in a custodian's name was confusing them."

In the SMA solution the client money was held at a custodian and added to the admin costs. In the newer professionally managed accounts solution, the money is held in client's own name at the broker.

The new 55bps fee for the professionally managed solution includes management and rebalancing from the company's investment managers Nathan Bell and Evan Lucas, brokerage, tax reporting and performance reporting.

Davidson says the ASX-listed company expects new inflows after the changes. The outgoing Praemium solution had been in place since July 2015.

Of the 77bps that InvestSMART charged its SMA clients under the old model, 40bps was Praemium's fee while 37bps was InvestSMART's.

Starting yesterday, InvestSMART is putting new clients in the PMA solution but the complete transition will take a few months.

InvestSMART is an ASX-listed company with a market cap of about $22 million. Its board is chaired by ipac founding director Paul Clitheroe.

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