Australia Managed Account Structures and Platform Models

A practice does not choose a managed account structure in isolation. The platform it runs on, custodial, non-custodial, platform-based or standalone, determines which of the five structures in the Australia managed accounts market it can actually deliver to a client, because each platform model carries a different capability for holding assets, executing trades and reporting beneficial ownership.

A custodial platform holds legal title to underlying assets on the client's behalf under a custody arrangement, simplifying settlement and reporting but constraining the range of direct assets a practice can hold outside the platform's own approved menu.

A non-custodial or platform-based model instead registers assets directly in the client's name at the broker or registry level, giving a practice more flexibility to hold direct securities but requiring more sophisticated administration and reconciliation capability from the provider.

This ordering matters practically: a practice evaluating a managed account offering should confirm what platform model underpins it before assessing which account structures the provider advertises, since a provider may list all five structures on its marketing material while its actual platform architecture only cleanly supports two or three of them at scale.

This is also why platform switching remains relatively rare even when a practice becomes dissatisfied with elements of its current provider: the operational cost of re-platforming an entire client book, including re-establishing every account structure and re-confirming every client mandate, is high enough that practices generally prefer to work within their existing platform's constraints rather than absorb a full migration.

Managed Discretionary Accounts and Separately Managed Accounts

Managed discretionary accounts operate under a documented discretionary authority that lets a licensed adviser or investment manager trade the portfolio without seeking the client's consent for each transaction, provided trading stays within the mandate's agreed parameters. This structure suits clients who want professional management without the friction of approving each trade, but it places the compliance burden squarely on the licensee, whose responsible manager must actively monitor that trading stays within the documented mandate at all times.

Separately managed accounts typically implement a model portfolio that the client has pre-agreed to follow, with changes made at the model level rather than through individual discretionary trading, and the client retains beneficial ownership of the underlying securities throughout. Because the client has already consented to the model itself, ongoing changes that stay within the model's stated strategy do not require fresh per-client consent, which is part of why separately managed accounts have scaled faster than fully bespoke discretionary arrangements.

The practical distinction that matters to a licensee is authorisation: running a managed discretionary account requires the responsible manager to hold specific MDA authorisation, while a separately managed account structure can often be delivered under a narrower Australian Financial Services Licence authorisation, since the client has already consented to the model rather than delegating open-ended discretion. This authorisation gap is a genuine commercial consideration for a newly self-licensed practice deciding which structure to build its offer around first.

Client reporting also differs meaningfully between the two: a managed discretionary account typically generates a transaction-level report showing every trade the discretionary manager executed, while a separately managed account report more commonly shows performance and holdings at the model level, since the client has already agreed to the model itself rather than needing to review each individual trade against a documented discretionary authority.

Individually Managed Accounts, Model Portfolios and Unified Managed Accounts

Individually managed accounts sit between fully bespoke portfolio construction and a standardised model, letting an adviser customise a base model for an individual client's tax position, ethical exclusions or existing holdings without building a separate portfolio from scratch. A unified managed account extends this further, consolidating multiple strategies and sleeves, potentially across several asset classes, into a single reporting structure so a client sees one account rather than several. Which of these structures fits depends heavily on the investment strategy menu a platform can implement at the sleeve level, since a unified structure is only genuinely useful if the platform can blend multiple distinct strategies within one account rather than forcing the client to hold several separate accounts anyway.

Model portfolios themselves are the simplest structure, a single pre-built allocation a client follows without further individual customisation, and remain the highest-volume structure by account count even though separately managed accounts and unified managed accounts often carry more funds under management per account among high-net-worth clients, since a smaller number of larger accounts can outweigh a much larger number of smaller model-portfolio accounts on total assets.

The tax-parcel-level customisation individually managed accounts allow is often the deciding factor for higher-balance clients transferring existing holdings into a managed account, since a standard model portfolio typically cannot accommodate a client's pre-existing capital gains position without triggering an unwanted realisation event on transition.

Custodial and Non-Custodial Platform Models

Custodial platforms bundle administration, custody and reporting into one integrated service, which is why the large national wealth platforms built their managed account capability on a custodial foundation first. The tradeoff is that a client's direct asset holding outside the platform's approved product list becomes harder to incorporate, which matters for practices running discretionary investment management authorisation where the mandate calls for genuine security-level flexibility rather than a constrained menu.

Non-custodial models instead register assets directly at the client level, more commonly favoured by independent managed account specialists and private wealth firms whose clients hold significant direct equity or fixed income positions that a custodial platform's approved list would not accommodate cleanly.

A growing number of providers now offer both models on one underlying platform, letting a practice choose custodial delivery for its simpler retail client base while running its higher-balance clients through a non-custodial arrangement on the same technology stack, avoiding the operational cost of running two entirely separate platform relationships.

Neither model is inherently superior; the right choice depends on the client base a practice actually serves. A practice built around retail clients with straightforward diversified mandates is well served by a custodial platform's simplicity, while a practice with a significant direct-share or direct-bond client base will find a non-custodial arrangement better matches how those clients already think about their holdings.

Platform-Based Delivery and Standalone Managed Account Providers

Platform-based delivery bundles the managed account capability with a broader wealth platform offering superannuation, insurance and cash management alongside investment administration, which suits practices wanting one commercial relationship and one client statement covering everything a client holds.

Standalone managed account providers instead specialise purely in the managed account layer, integrating with whichever custody, platform or superannuation provider a practice already uses, an approach that tends to appeal to larger or more sophisticated practices willing to manage multiple vendor relationships in exchange for deeper managed account-specific capability than a generalist platform typically offers.

The commercial tradeoff between the two is largely one of consolidation versus depth: a smaller practice usually values the single-vendor simplicity platform-based delivery provides, while a larger practice with an existing custody relationship it does not want to disturb tends to prefer bolting a standalone managed account capability onto that existing arrangement rather than migrating everything to a new bundled platform.

Managed Account Structures and Business Models Compared

Taken together, structure and platform model form a two-dimensional decision a practice makes once, then largely lives with: the structure determines what the client experiences and what compliance obligation the licensee carries, while the platform model determines what is operationally possible to deliver in the first place.

A practice reviewing its managed account offer for the first time typically starts from the platform question, since changing platform is a much larger undertaking than adjusting which structures it offers on an existing platform, and most providers can add a second or third structure to an existing platform relationship without a full re-platforming exercise.

Providers themselves increasingly market their offering around this two-dimensional framework directly, describing both the platform model underneath and the structures available on top, rather than leading purely with structure names, since sophisticated buyers now routinely ask about the underlying platform architecture before comparing structure options.

This report treats the structure and platform dimensions separately precisely because conflating them, as some earlier market commentary has done, obscures the real decision sequence a practice actually follows when building or changing its managed account offer.