Why they are taking off
Simply.... Managed Discretionary Accounts (MDAs) offer investor’s greater transparency and adviser’s an efficient way of creating scale.
Positioned between traditional broker accounts and managed funds, MDAs offer investors higher levels of transparency and a wide variety of direct equity strategies to suit different investment needs. From an adviser’s perspective, they also enable scale, providing an extremely efficient way of offering clients exposure, not just to direct equities, but to a variety of strategies that allow clients to protect and take advantage of volatility.
However it’s not just the ability to increase scale, greater transparency and speed of execution of MDAs that is leading to the rise in MDA use by advisers. Since the GFC advisers have seen a significant increase in the level of compliance, it has become equally as important for advisers to demonstrate, not just to clients, that they can effectively manage risk and protect capital in crashing markets as well as make returns in rising markets, not just by moving to cash but through a variety of different strategies that can perform in a variety of market conditions.
The perception is that MDA’s are complex and only for sophisticated investors, when in reality a MDA is just a legal structure that is managed and transacts like a managed fund but has all the transparency, and benefits of a traditional broker account, while having the added benefit of professional management with an overlay of advice.
HarbourSide Capital provides tailored MDA solutions for Financial Planners. For further information on how MDA's could assist your practice email; firstname.lastname@example.org or contact +61 2 9432 7850.
Harbourside Capital Pty Ltd (ACN: 166 765 537) an Authorised Representative (AR No. 448907) of HLK Group Pty Ltd (ACN: 161 284 500) which holds an Australian Financial Services Licence (AFSL no. 435746). Any information or advice contained on this marketing material is general in nature only and does not constitute personal or investment advice. All securities and financial products or instruments transactions involve risks.