A Separately Managed Account or SMA is a portfolio of investments in which the investor has direct ownership of the investments within the portfolio. The investor however, delegates authority to a professional adviser regarding the decisions involved in buying and selling securities.
A SMA combines the beneficial features of investing directly in the stock market and investing through managed funds, because the investor owns the stocks directly, but the expertise and research resources of a professional adviser are applied to the investment process and share selection.
With a SMA, you may be able to achieve your investing objectives at a lower ongoing cost compared to other investment alternatives.
Consortium Private Wealth will match you and your needs with the right assets, whether they be shares, listed property trusts or cash & fixed interest. Through our thorough research process we choose the best investments available for you.
Separately managed account in our view is a portfolio of professionally managed investments held directly by the investor or their preferred entity.
Investors can have full transparency and can see exactly what assets are invested within their portfolio, our clients enjoy knowing where their money is invested and why. There are significant advantages in terms of tax planning because of the direct ownership, our advisors can manage capital gains and offset any future capital gains against future capital losses.
When using unlisted managed funds the investor has no control over the managers transactions and how these actions may affect their tax outcomes.
As stated above, the investor owns the assets directly in their own name or preferred entity. This also reduces potential company risk. For example, during the global financial crisis we saw some advisory businesses fail due to complex custodial ownership structures where investors lost direct ownership over their assets and for some these assets were sold as part of the advisory businesses debt obligations.
The benefit of direct ownership of your assets cannot be understated.
Different ways to invest in shares
Media headlines focus more on share market drops than rises, but wherever there is a weakness there is usually an opportunity lying in wait. High quality companies are available at excellent value if you know where to look, but if you’re not sure how to take advantage of these opportunities, we’ve outlined a way you can invest into the share market.
Separately Managed Accounts (or SMAs) offer direct share ownership with the expertise of an investment manager. An SMA is a customised share portfolio managed by the SMA provider in accordance with one or more specific investment models. These are similar to a managed fund with the difference being that because you own the underlying shares you control when and how much you invest. You also manage your own tax situation.
You can start with an investment of $5,000. Brokerage is kept to a minimum and as you are making regular investments into your account, you benefit from dollar cost averaging (investing small amounts regularly into the market, thereby reducing the average cost price of your shares).
Share investment can be confusing and time-consuming. If you’re not sure which option is best for you, we can help you determine an appropriate strategy for your circumstances.