Adviser Ratings leads launch of SMA Reporting Standard framework

The last five years have seen separately managed accounts (SMA) assets quadruple to $200 billion, with more than 100 active SMA managers now creating portfolios.

In response to this, the financial services industry has launched the SMA Reporting Standard (SMARS), led by the Adviser Ratings Group under a separate entity, with the aim of bringing “unity and clarity” to fee reporting across the sector.

The SMARS framework is designed to standardise RG97 fee reporting and nomenclature for SMAs while also addressing the historical inconsistencies and complexities in fee structures, enabling clearer comparison between products and fostering informed decision making among advisers and consumers.

The standard was developed with six primary goals:

• Uniform reporting standards: Establishing consistent fee reporting formats across platforms to simplify industry-wide comparisons.
• Enhanced transparency: Provide clear insights into fee structures, thereby building trust and confidence among consumers and advisers.
• Streamlined comparisons: Reducing the complexity involved in evaluating SMAs across different responsible entities.
• Improved trust and confidence: Eliminating confusion around fee discrepancies for identical portfolios.
• Increased fairness in reporting: Creating a level playing field by standardising reporting methods, thus minimising potential misinterpretations.
• Efficient integration: Ensuring the standard can be easily adopted by SMA managers with minimal additional data requirements.

Development and oversight of the SMARS will be spearheaded by an independent advisory committee, including Dr Jerry Parwada, Dr Michelle Cull, Tom Reddacliff, Angus Woods and Nick Topham.

Speaking for the committee, Parwada said: “The rapid growth of the managed accounts sector highlights the need for clear standards and strong collaboration between industry and research.

“The standard plays a critical role in ensuring transparency, efficiency and trust in this expanding market. By working closely with industry leaders, we can create a framework that not only supports innovation but also upholds the highest levels of investor confidence.”

According to the group, this initiative has received strong support from across the industry, including SMA managers, investment platforms and fund managers.

Additionally, 20 foundation partners from across the financial services sector will be playing a key role in supporting uniformity in SMAs by “championing consistent reporting practices and ensuring adoption across the sector”.

In addition to Adviser Ratings, the foundation partners include Encore Advisory Group, AMP North, Atlas Funds, Brad Matthews Investment Strategies, Drummond Capital Partners, Ethical Investments, HUB24, Insignia, InvestSense, MLC, Morningstar, Netwealth, Numerisk, ProductRex, Quilla Consulting, The SMSF Association, UNSW - Fintech AI Innovation Consortium, Western Sydney University, and Vanguard Australia.