InvestSMART to offer Australian-first capped fees

The following article appeared in Advisor Voice on 13 November, 2018 and discusses the launch of InvestSMARTs capped fee model.

Using the InvestSMART’s recently launched Professionally Managed Account (PMA) platform, investors will pay no more than $451 per annum, regardless of the amount they invest.

Fees start at just $99 per annum for clients with lower balances of $10,000 to $18,000, capped at $451 for those who invest over $82,000, excluding brokerage costs and indirect costs.1 Investors can also benefit from low brokerage costs of $5.50 or 0.11% (whichever is greater) on buys and sells.

Commenting on the unique pricing structure, InvestSMART CEO Ron Hodge said: “We know from our discussions with financial advisers that servicing a broad range of clients in a cost-effective way is an ongoing challenge for the industry.

“This platform can assist advisers in delivering personalised service and value for money to all, from lower balance clients through to the more sophisticated.”

Personalised portfolios

Advisers can combine the underlying model portfolios in any proportion they choose, creating a portfolio that is tailored to their clients’ individual investment objectives.

“We are getting a lot of interest from advisers who would like to use the platform to run their own portfolios for their clients. InvestSMART PMAs cater for all types of financial advice businesses, allowing advisers to outsource investment management or take a more hands-on approach.”

Under InvestSMART’s PMA model, investors hold their shares directly, with an individual holder identification number (HIN) providing full transparency over the underlying assets. This differs from the traditional Separately Managed Account (SMA) model, where shares are held by a custodian.

“The HIN-enabled model is not only cheaper and less complicated but also offers real-time transparency, making it easier for advisers to keep track of their clients’ holdings,” Mr Hodge said.

In addition to the capped pricing, InvestSMART’s PMA platform gives advisers complete visibility over their clients’ portfolios. Through the PMA platform, advisers have the ability to generate reports and tax statements and can easily track transactions within the portfolio. They can also offer their clients 24×7 access to their portfolio with their own login.

“With improvements in technology bringing down fees across the board, we will continue to look for new ways to help advisers lower the costs of investing for their clients,” Mr Hodge said.