Managed accounts drive stockbroker transition

By Aleks Vickovich
 — 1 minute read

The rise of managed accounts has handed stockbrokers a lifeline as emerging technology aids the shift from transactional to strategic advice, says Praemium.

Speaking to InvestorDaily, Praemium head of distribution Martin Morris said equity trading professionals are increasingly seeing the technology underpinning managed accounts as an enabler of survival and business growth.

“Technology is allowing stockbrokers to outsource without losing the customisation that is key to their relationship with their clients,” Mr Morris said. “It is allowing them to move into strategic advice. The transaction side of their business is dead, they are just losing revenue on that front, so they need to move into advice, and managed accounts is an enabler of that and to help them show value and replace the revenue they have lost.”


Many stockbrokers are hesitant to incorporate managed funds into their client portfolios and advice process, Mr Morris said, but added that managed accounts can allow them to continue to add value as a stock-picker and equities adviser.

While stockbrokers may be poised to reap the advantages of the managed accounts environment, traditional institutionally-owned investment platforms are struggling with the new environment, Mr Morris alleged.

“The institutions may introduce ‘managed accounts’ as an opportunity, but they still control the process and it still sits on old technology,” he said

“I think the new environment is going to be difficult for them – they have been set up as businesses for the world of tied distribution.”


Managed accounts drive stockbroker transition
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