Following the Royal Commission into the banking sector, investors are looking for transparency and responsibility when choosing where to put their money – with Managed Discretionary Accounts (MDAs) emerging as an increasingly preferred option.
‘‘People are now much more well informed with investments and want to know what’s going on with their money,’’ says Michael Walker, principal of Sydney-based investment management firm Walker Capital.
‘‘Investors are moving away from traditional and less transparent funds into MDA structures because they want to maintain ownership of their investments. They want transparency and real-time access to their accounts.’’
The Institute of Managed Account Professionals reports that in 2018 MDAs experienced year-on-year growth of 31 per cent, representing $14.85 billion, thereby increasing funds under management in MDAs in Australia to $62.43 billion.
When setting up Walker Capital three years ago, Walker says he aimed to create an investment company that is ‘‘transparent and secure’’ while simplifying the sign-up process with ‘‘digital onboarding’’ to streamline applications.
There is growing demand for investments into alternative asset classes as investors seek to diversify and de-risk their portfolios, he says.
‘‘In alternative assets like Forex and CFDs [contracts for difference], investors need to understand the MDA investment and what the risks are,’’ Walker says. ‘‘There is leverage in many of these investments and investors need to understand these risks against the potential rewards.’’