Industry conflicted over IMA's

Published in Money Management, December 2010 by Milana Pokrajac

Individually managed accounts (IMA) are just an investment process for some industry members, but others believe they could surpass the popularity of managed funds in 10 years.

The latter view was supported by the co-founder of a boutique investment firm Wealth Within, Dale Gillham, who predicted an increasing number of people in the financial services industry would slowly shift to non-unitised options.

“Clients want more transparency and more control, so they don’t get as much with managed funds,” said Gillham. “Therefore, the move is towards these individually managed accounts,” he added.

Gillham’s comments came after Wealth Within signed up its first dealer group to white label its IMA service, with another deal on the horizon.

However, Asgard head Craig Lawrenson said individually managed accounts were merely an investment management process, and that they complemented, rather than rivalled, managed funds.

“The concept of IMA is the fact that you individually managing it; it’s bespoke … which is why it tends to be a high-net-worth proposition,” Lawrenson said.

“I guess SMAs [separately managed accounts], you can argue, are an alternative to a managed fund, because you are outsourcing to a third party manager and it could be manager X,” he added.

Gillham agreed IMAs could complement managed funds, but added they also had the potential to take money out of the sector.

“We’re talking about both things because IMAs give people beneficial ownership of the share, so does the SMA, whereas a managed fund doesn’t,” he said.

Gillham said investors would drive the change, rather than financial advisers.

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