The Growth of Managed Discretionary Accounts (MDAs)

In a world of market volatility not seen in a long time, the ability to transact on a client’s portfolio is becoming more crucial every day. The difference between one day and one week could cost your client thousands of dollars in losses, potentially leading to a more fragile relationship between yourself and your client.

Rather than simply another product, MDAs provide a solution that underpins the businesses of all market participants:

  • MDAs provide an integrated investment administration, investment management and advice Service which removes duplicated layers of cost for clients
  • MDAs eliminate the need for ongoing changes to client portfolios to be agreed with each client, promoting better outcomes for clients and significantly improved efficiencies for advisers (Note; the dealer/investment manager can still continue to notify clients prior to making any change to a clients portfolio, however, we have seen that clients eventually view the advantages of the discretion and the ability to move in and out of stocks quickly so as to alleviate any negative portfolio performance/outcome)
  • MDAs enable Fund Managers to deliver solutions to clients at sharper pricing without compromising portfolio outcomes
  • MDAs provide an ideal solution for HNW and SMSFs with the majority of investors in some MDA offers being SMSFs
  • MDAs allow for direct equity solutions, with a lower raw cost and transparency of their investments and an ability to control their own tax position
  • The technology used has been specifically designed to cater for direct investments as well as unitized structures and have sophisticated portfolio modeling capability
  • An MDA can have different fees for different clients delivering a “pure” fee-for-service approach