Managed accounts provider replaces Praemium
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.
Frequently Asked Questions about this Article…
InvestSMART is transitioning to PMAs to make investing easier to understand for clients. They found that having client money held in a custodian's name was confusing, so they moved to a system where money is held in the client's own name at the broker.
The fee for InvestSMART's new PMA solution has decreased from 77 basis points to 55 basis points. This fee includes management, rebalancing, brokerage, tax reporting, and performance reporting.
The investment managers for InvestSMART's PMA solution are Nathan Bell and Evan Lucas. They handle management and rebalancing as part of the service.
Under the previous SMA solution, InvestSMART charged 77 basis points, with 40 basis points going to Praemium and 37 basis points to InvestSMART.
The new PMA solution offers clients the benefit of having their money held in their own name at the broker, which simplifies the investment process and reduces confusion. It also includes comprehensive services like management, rebalancing, brokerage, tax reporting, and performance reporting.
InvestSMART began transitioning new clients to the PMA solution starting from November 1, 2018, with the complete transition expected to take a few months.
InvestSMART is an ASX-listed company with a market cap of about $22 million. Its board is chaired by Paul Clitheroe, the founding director of ipac.
InvestSMART expects new inflows of client money following the transition to the PMA solution, as it aims to provide a clearer and more client-friendly investment experience.
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