Grow your business with JBWere SMA. Adviser presentation September 2015

Transcription

1 Grow your business with JBWere SMA Adviser presentation September 2015

2 Investment planning landscape - what is driving the growth in SMAs? Consumer Behaviour Increasing need for transparency around holdings and tax Competitive pricing Growth in SMSFs 30% of assets held in listed shares, 26% in cash and TDs, 8% in unlisted trusts (ATO, as at June 14) Adviser Business Management FOFA Increasing the value of the business and value per staff member Minimising costs Increasing productivity / scalability Barriers to using direct equities - 1) compliance risk 2) lack of time to constantly monitor 3) lack of expertise 2 Adviser Business Models Moving to an outsource investment model (in full or in part) but retain control of client s overall investment strategy Retaining client contact and relationships in a new opt-in / opt-out world Seeking to maximise rainmaker ability to grow the business

3 What is an SMA? (Separately Managed Account) Managed Funds SMAs Direct Equities 3 An alternative to managed funds and direct shares Is a financial product, available via a PDS Is a managed investment scheme, similar to a managed fund Enables access to a range of professionally constructed and managed model portfolios of listed investments Day-to-day investment decisions delegated to a professional investment manager in accordance with chosen model portfolio All investors hold the same investments in the same weightings as the model portfolio and any deviations are corrected by regular portfolio rebalancing. Trades are executed simultaneously for all clients unlike a traditional model portfolio The customer (or trustee) is the owner of the underlying securities, not units in a unit trust Advisers can blend several SMA model portfolio options to meet individual client needs

4 What are the key features of an SMA? Feature Managed Funds Direct Equities SMAs Professional management N/A Multi-manager N/A (yes for multi-strategy) Accessible via wrap platforms Management fee Pooled investments/ unitised Brokerage costs Typically lower Brokerage is additional but cheap Means no inherited capital gains Unit prices (visibility of share price) Individual investor accounts Individual cost base for calculation of CGT Dividends, franking credits and realised gains/ losses flow directly to investor Transparency Beneficial ownership of assets retained by investor 4 Ability to transfer shares in/out Ability to make decisions on corporate actions

5 How does an SMA work? Investor Platform Cash account Managed fund Direct equities JBWere SMA Model Portfolios manages JBWere Investment Strategy Group (JBWere ISG) In specie transfers Your clients can transfer their direct equities into the JBWere SMA Model Portfolio and retain beneficial ownership. CGT is not triggered for in specie transfers into an SMA for stocks held % in that model 5 Individual portfolio of securities Professional investment management Quality research and insights is the core of the JBWere SMA offering. The team of JBWere Investment Strategy Group experts access a wide range of research views and then provide their own proprietary overlay and investment solutions. The team also uses a variety of company and industry databases and insights from company management meetings to enhance the portfolio construction process and ensure competitive returns. The JBWere SMA model portfolios adhere to a rigorous and disciplined compliance and governance process to deliver on the model portfolio s objectives.

6 Investing in SMAs, benefits for your clients Individual accounts Beneficial ownership of the securities held within the SMA model portfolio Receive the dividends and tax credits (also know as franking or imputation credits) Professional investment management Centralised, professional stock selection and portfolio construction Efficient, centralised management of trades (no leakage) and corporate actions decisions Tax advantages No inherited capital gains tax (unlike managed funds SMAs are not bought and sold in units) Individual cost base established the day the securities in the SMA are bought Transparency Complete transparency into underlying securities and the individual cost bases All portfolio activity available online transactions, corporate actions and dividends received Cost effective JBWere SMA Management fees of 0.40% to 0.60% pa (incl GST) may be less than a comparable managed fund MER Reduced brokerage costs through consolidated trades Flexibility / portability Entry -Transfer securities into an SMA and pay no CGT on stocks held in the model at the same weight Transfer between model portfolios in an SMA Exit the SMA to another sponsor without a CGT event 6

7 Investing in SMAs, benefits for your business Scalable direct equities business Meet the growing demands of your clients for equities solutions A simple, easy and transparent service to manage the direct equity holdings in your clients investment portfolios. Compliance management No ongoing SoA or RoA s required for SMA model changes initial advice only An SMA is a registered management investment scheme Professional investment management Access the expertise of the JBWere Investment Strategy Group JBWere SMA portfolios adhere to a rigorous and disciplined process to deliver on the portfolio s objectives. Enhance your service offering Broaden your offering with a scalable direct equities solution Access JBWere SMA marketing support and research insights Improve profitability Planners time is freed up to concentrate on the client relationship development and new business Lower costs and improved office revenue opportunities admin/settlements/para planning Practice efficiency Outsourcing the stock selection, compliance, admin, reporting and after market support/queries Outsource the buy/sell execution and rebalancing Reduce pressure on back office and settlements staff 7

8 Adviser business models - benefits in implementing an SMA solution? Adviser business models: Managed Funds investment based business model Direct Equities investment based business model Risk (insurance) focussed business model Core Business Model Direct Equities 8 Core Business Model Managed Funds or Risk Focus SMA outsource solution Ability to satisfy clients who want ownership of direct equities, SMSFs. Access to professionally managed portfolios that have full transparency at the stock level and generally lower costs Enhance overall service offering with little effort SMA outsource solution Inefficiencies faced by self-directed equity investing Time spent on research, decision making, monitoring and compliance Lack of portfolio uniformity across majority of clients or client segments Inability to execute changes across all clients at the same time Implementation done by the platform across your entire client base saving you time, cost and errors in doing it yourself

9 JBWere/Investment Trends SMA Report key findings In 2015 JBWere partnered with research firm Investment Trends to produce the JBWere / Investment Trends SMA Report. The report surveyed over 650 advisers on their experience and usage of SMAs versus investing directly in shares. 20% of financial advisers now using SMAs for client investments, while a further 23% planned to start using SMAs in future. 48% of advisers said the work involved in monitoring individual stocks discourages them from investing directly in shares further 51% said they believed SMAs were more appropriate for their SMSF clients than investing directly in equities. What is driving advisers to recommend SMAs to their clients? - (46%) SMAs allow clients to see the underlying shares in the portfolio - (45%) SMA s are less of an administrative burden than investing directly in shares - (42%) SMAs are an efficient way to access professional funds management Current SMA users predict that 24% of their funds under advice will be allocated to SMAs by 2018, compared to 13% currently. 9

10 10 JBWere/Investment Trends SMA Report SMAs are the best of both worlds

11 Adviser Business case studies Direct shares to SMA s 11 Wayne Lear, Shield Wealth (Madison Financial Group) The challenge $150m FUM direct equities book Struggling with back office settlements and compliance/corporate action volumes The business hit "capacity constraints" and effectively closed its doors to new clients The opportunity JBWere introduced Shield Wealth to the SMA concept as a way of freeing up office resources to focus on growing the business not running the business Client book was segmented and it was recommended that the bottom 60% of the client book should be transitioned into a more efficient and scalable JBWere SMA solution The solution Bottom 60% of the portfolio in specie transfer into the JBWere SMA Income Portfolio New client funds invested directly into JBWere Income or Growth depending on clients investment objectives Wayne outsourced the investment management to JBWere SMA and his clients are now receiving a detailed monthly performance report that exceeded what he was able to provide on a quarterly basis Wayne was now able to focus on the top end of his client base where most of his revenue and referrals come from. He has also now re-opened his business for new clients JBWere SMA team work with Wayne to assisting him with biannual client presentations that include both a market update and performance update on the JBWere SMA portfolios Wayne is JBWere's largest IFA user of the JBWere SMA Income and Listed Fixed Income Portfolios

12 Adviser Business case studies Direct Shares & Managed Funds to SMA 12 Vikas Modgil - KnowledgebankIQ (KBIQ) Aligned Dealer Group The challenge Vikas joined KBIQ and purchased a book of clients from a retiring advisor who was an active user of concentrated direct equities and managed funds for domestic equities, Listed hybrids for Fixed Income and managed funds for International Equities, Small Cap Domestic Needed support in managing the direct share portion of his clients portfolio. JBWere were able to assist him via the JBWere Intermediary Desk services who assist planners with all their direct share needs including execution, research, IPO s and Individual portfolio reviews with SOA s The opportunity Vikas learnt about the JBWere suite of SMA s and proceeded to use the SMA's to provide his clients with professional management of their direct share portfolios allowing him to focus on client relationships and growing his business To offset the higher cost of JBWere SMA's (MER'S range 0.40% to 0.60%) Vikas reviewed his clients external managed fund exposures and found that his clients were paying 1.1% for a professional unit trusts manager whose performance was sub the JBWere Income SMA. By moving these unit trust investments into JBWere SMA he has reduced the cost to the client and improved returns assisting Vikas to demonstrate the value to his client and justify his planner fees in the post FOFA world. The solution Vikas moved his clients into the lower cost better performing JBWere SMA and saved those clients 55 to 70 bps in cost Vikas now runs a scalable SMA business and relies on JBWere to manage and maintain the direct share portfolios for his clients

13 Why JBWere SMA? 175 year history, grounded in equities expertise The JBWere Investment Strategy Group is core to the JBWere SMA offering through the provision of quality research, significant market knowledge, experience, consistency and insight. Local strength, global reach JBWere is an Australian firm owned in partnership with NAB and Goldman Sachs providing organisational strength, significant depth of global investment and economic experience, capital security, strong governance, systems and platforms. Performance accountability We believe in a disciplined, process-driven approach to investment that will lead to consistent, predictable and value added returns over the long term. Proactive reporting and support Market leading monthly performance reporting and marketing support to enable proactive engagement with your clients. 13

14 Investment Process for JBWere SMA Equity portfolios The level of stock universe may vary in each portfolio depends on the individual portfolio and mandate. 1 ASX Investment Universe Initial screening of ASX - Market cap -Liquidity - Third party analyst coverage 2 ISG Investment Universe (~300 securities) - Quantitative and qualitative ranking filters applied 3 In-depth research (~60 stocks) - Financial modeling - Stock selection: valuation, investment thesis - Analyst conviction 14 4 Portfolios (~15-25 stocks) Portfolio Construction - Mandate fit - Ranking, risk and liquidity

15 JBWere s suite of SMA Portfolios Asset class Portfolio name Inceptio n Date Description MER JBWere Income May 2008 Provides higher tax effective income by investing in a portfolio of Australian shares that delivers high dividend yields and high levels of franking. 0.55% JBWere Growth May 2008 Provides high quality capital growth by investing in Australian shares that have the potential to deliver superior returns over the medium to long term. 0.55% Australian Equities JBWere Leaders Jun 2009 Provides exposure to a broad selection of Australian blue-chip companies across various sectors and industries with a focus on income and franking credits. 0.40% JBWere Industrials Nov 2002 Provides exposure to quality Australian companies (excluding A-REITs and Resources) that have strong and sustainable dividends. The portfolio focuses on after tax returns through its low turnover and high proportion of franking credits. 0.40% JBWere Small Companies Oct 2002 Provides exposure to quality emerging companies in Australia that have the potential for significant growth. 0.45% Fixed Income JBWere Listed Fixed Income July 2010 Multi Strategy JBWere Multi Strategy May Provides a fixed income asset allocation representing a store of value while exhibiting a relatively low level of volatility and providing a steady and secure income stream. Provides long term capital growth by investing in a broad selection of investments listed on the ASX, across a range of asset classes. The investment universe includes large cap stocks, small-mid cap stocks, listed corporate bonds, listed hybrid securities, A-REITs, LICs, ETFs and ETCs. 0.55% 0.60%

16 Platforms featuring JBWere SMAs Asset class JBWere SMA Portfolio MLC Wrap/ NAvigator Macquarie Wrap Praemium OneVue Mason Stevens JBWere Income JBWere Growth Australian Equities JBWere Leaders JBWere Industrials JBWere Small Companies Fixed Income JBWere Listed Fixed Income Multi Strategy JBWere Multi Strategy 16

17 NAB Group suite of SMAs - a complete asset allocation capability Antares Property SMA Index Income Growth Core Antares Blue Chip Top 20 JBWere Income JBWere Growth JBWere Leaders JBWere Listed Fixed Income JBWere Industrials Antares Dividend Builder JBWere Small Companies Antares Core Opportunities Redpoint Industrials JBWere Multi Strategy 17

18 About JBWere Established in 1840, JBWere is a leading Australian private wealth manager who provides bespoke wealth and investment advice to Australia s most successful families, companies and non-profit organisations. Quality research is at the core of JBWere s business. The JBWere Investment Strategy Group (ISG) undertakes in-house research across a diversified suite of asset classes including Australian Equities, International Equities, Australian and International Fixed Income, Cash and Alternative Investments. Supporting the team s research is a wide range of views including those from National Australia Bank (NAB), Goldman Sachs Australia and external industry research. The breadth of market views and in-house expertise, coupled with JBWere s Charter of Investment Independence enables the portfolio managers to confidently navigate changing market conditions and deliver an objective outcome. The JBWere ISG adheres to a well-defined portfolio construction methodology with extensive risk management tools. The team s proven track record is a result of our consistent strategy of investing in high-conviction portfolios. The JBWere ISG pick the best blue chip stocks and better-quality bonds and hybrids and invest for the long term. JBWere is owned in partnership with NAB and Goldman Sachs; more specifically 80.1% owned by NAB and 19.9% owned by Goldman Sachs Australia Pty Limited. This unique partnership provides organisational strength, significant depth of global investment and economic experience, capital security, strong governance, systems and asset platforms. 18

19 For more information contact your NAB Wealth Representative or contact JBWere SMA

20 Important information This document comprises general advice only. In preparing it, JBWere Ltd (JBWere) did not take into account the investment objectives, financial situation or particular needs ( financial circumstances ) of any particular person. Accordingly, before acting on any advice contained in this document, you should assess whether the advice is appropriate in light of your own financial circumstances or contact your adviser. JBWere and its respective related entities distributing this document and each of their respective directors, officers and agents ( JBWere Group ) believe that the information contained in this document is correct and that any estimates, opinions, conclusions or recommendations contained in this document are reasonably held or made as at the time of compilation. However, no warranty is made as to the accuracy or reliability of any estimates, opinions, conclusions, recommendations (which may change without notice) or other information contained in this document and, to the maximum extent permitted by law, the JBWere Group disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from this document. The JBWere SMA Model Portfolios can be accessed through a Separately Managed Account (SMA) via a range of platforms. The information in this brochure does not take into account any investor s personal objectives, financial situation or needs and so investors should consider its appropriateness having regard to these factors before acting on it JBWere Ltd ABN , AFSL All rights reserved. No part of this document may be reproduced without the permission of the JBWere Group. JBWere Ltd is 80.1% owned by National Australia Bank Limited and 19.9% owned by Goldman Sachs Australia Pty Ltd. This communication is being furnished to you solely for your information and may not be copied or redistributed to any other person. This information may not be redistributed in the United States or to U.S.