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    Managed Discretionary Accounts – A Definition

    With so many investment options in today’s market place, there is little wonder that there are high levels of competition when it comes to investor’s capital

     Financial adviser showing terms of contract on tablet

    With shares, bonds, commodities, foreign exchange, property, mixed-use funds, property development funds, exchange traded funds and hedge funds as just a few of the options available, there is little doubt the market can seem cluttered with options.

    Managed Discretionary Accounts as a financial product or asset class are different. They are different in the way of their flexibility, accountability and structure mean they are unique in the investment world.

    What is a Managed Discretionary Account?

    According to the Australian Securities & Investment Commission’s Regulatory Guide 179 on Managed Discretionary Accounts, “an MDA means a facility, other than a registered managed investment scheme (registered scheme) or an interest in a registered scheme, with the following features:

    (a)  a person (MDA client) makes contributions;

    (b)  the client portfolio assets are managed on an individual basis by another person (MDA provider) at the MDA provider’s discretion, subject to any agreed limitation; and

    (c)  the client and the MDA provider intend that the MDA provider will use the client portfolio assets to generate a financial return or other benefit for the client”[1].

    In short, as an investor, you are placing your money into an account and signing over the rights to buy, sell, trade & apply for financial instruments that fit within your agreed strategy. The account manager, who is a licenced and qualified expert, with many years’ experience is then charged with the daily management of your portfolio, while you continue on with your day-to-day life.

    Where Managed Discretionary Accounts differ to Exchange Traded Fundsor Hedge Funds – or any fund for that matter – is that in the case of a Managed Discretionary Account your funds are not pooled with others to realise economies of scale in the trading activities or position, it is purely your money, doing what you want it to do.

    This requires a higher level of capital – usually starting at $250,000 as a minimum account set-up with some managers start from $500,000 - so we are not talking about mum & dad investor market here, but high net worth individuals.

    With these usually large portfolios of investments, investors have the ability to take money out at any time, review your portfolio through an online portal and focus on the trades being made, all the while being able to take a ‘passive position’ on an actively traded portfolio.

    MDA’s are ideal for expatriates, busy business people or individuals looking to actively trade on the market, but simply don’t have the time to manage such a large portfolio.

    There are also benefits with Managed Discretionary Accounts, as the account manager has the direction to trade, without constant contact, approvals or paperwork with the investor, meaning time difference (due to geographic location or availability) is no longer a factor, and the account manager can take opportunities as they come. 

    By definition, Managed Discretionary Accounts are a very useful tool to create a hedging position or seek to drive profits when in the hands of an expert Managed Discretionary Account manager. As always, there are risks when investing in financial products and services, and for more information it is paramount you speak with a Managed Discretionary Accounts expert or independent advisor before making a decision to invest.


    We welcome you to give our team a call to discuss your investment goals and objectives.

    You can call Walker Capital Australia on +61 2 8076 2210, and we’ll see how we can help you achieve your investment goals.

    Want to read more great information on Managed Discretionary Accounts? Check out our Managed Discretionary Accounts article: Managed Discretionary Accounts