Tricom Investment Management has signed a deal with listed portfolio administration provider APA Financial Services to create a separately managed account (SMA).
The first stage of the wholesale investment vehicle is expected to be released in December through a joint venture between the two companies.
Ralton Asset Management is one of a number of boutique managers reportedly interested in the product and will be the first to manage it.
Pharos Financial Group negotiated the deal between the two companies after Tricom went looking for providers to jointly develop an SMA.
The SMA is targeted at portfolio managers and non-institutionally aligned financial planning groups.
Dealers would pay a fee to badge it as their own product but outsource the reporting requirements.
The new product is packaged to suit high-net-worth individuals with portfolios of over $1 million who seek good tax planning, APA managing director Paul Malcolm said.
“One of the issues the space has had in the market has been low traction,” Tricom associate director Graham Parkes said.
Parkes said this is due to non-consolidated reporting by other manufacturers and fund managers being unwilling to hand their products over to an SMA operator.
To drive business, APA will not charge additional fees to clients who include the SMA holdings in APA’s portfolio service and will offer consolidated reporting.
It follows Tricom’s launch of a model portfolio platform for trading on the Australian Securities Exchange 12 months ago.
Listed SMA provider Praemium bought a stock market data system in May for $5 million to boost sales of its V-wrap software to stockbrokers and dealer groups who white label the product.
APA is a Perth-based group with 46 staff that supplies services to 17 boutique dealers and other financial services groups.
SMAs are a way of managing retail investments that can avoid tax liabilities of using traditional managed funds, but take up has been slower than expected.
