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SMA reporting standard reaches ‘starting point’ consensus

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12 December 2025 by Simon Hoyle, Professional Planner

Article link: https://www.professionalplanner.com.au/2025/12/sma-reporting-standard-reaches-starting-point-consensus/

The need for a standardised reporting framework for separately managed accounts (SMAs) is urgent and can’t being delayed by demanding that it be perfect from day one, or it risks opening the door to allow the regulator to dictate the issue to industry, industry leaders have agreed.

The 2025 Professional Planner Researcher Forum workshopped a minimum “starter” SMA reporting dataset that could materially improve adviser and client outcomes by improving transparency and accountability of all players in the managed accounts chain.

Table discussions made it clear that achieving even a bare minimum reporting framework will require considerable co-operation and goodwill between industry participants, with pockets of clear resistance still in evidence.

In particular, fund managers remain unwilling to disclose portfolio holdings, claiming they represent intellectual property. Even so, the forum heard that the development of uniform standards is both necessary and inevitable, and that the lack of standardised performance and look-through data for SMAs often leaves clients with no meaningful performance context for their advisers’ recommendations.

As a result, transparency, comparability and adviser accountability are all weakened, and advisers may be unable to demonstrate they’ve met their best interest duty or to benchmark SMA outcomes against alternatives that might be available.

Proposed minimum “starter” dataset
1. Product identifier (including manager, product name, whether off-the-shelf or private label).
2. Assets under management (AUM) (history/flows on a monthly basis).
3. Time-weighted returns (net of declared fees, with method documented; appropriate time period 1m, 3m, 1y, 3y, 5y, since inception; and value of $10,000 invested over time.
4. Fees (platform fee, manager fee, transaction/implementation costs, performance fee (if any), other fees).
5. Holdings disclosure (Top 10 exposures, plus cash percentage, plus asset allocation).
6. Stated benchmark (explicit definition plus construction rules).
7. Flag for tailored/custom elements (yes/no; short description if yes).

Product identifier

The discussion – involving eight tables of delegates made up of research professionals, asset consultants and fund managers – argued the “off-the-shelf versus private label” distinction should be removed. Additional precision could be added by adopting APIR codes and a short description of a product’s objective. A deeper concern was not the identifier itself, but whether making product-level information publicly accessible improves outcomes at all. One group argued it did not.

Assets under management

Time-weighted returns

The forum heard that advisers cannot meet their best interest duties to clients, nor conduct proper comparisons, without credible, net-of-fee return data, but there were strong and disparate opinions on what should be included. Short-term data points such as one-month or three-month returns were widely labelled as unhelpful, and in some cases as “silly”. A focus on longer-term periods and cumulative dollar outcomes gained greater support, and there was wide concern over “implementation dispersion”, with participants describing “astronomical” variations between the same SMA implemented across different platforms, driven by execution conventions, unitisation rules, fractional share limitations and the realities of trading listed instruments. Without clarity on which performance number is being reported, advisers and clients may be left trying to make comparisons on meaningless metrics.

Fees

Broadly accepted as essential but nevertheless accompanied by complaints about the variety and complexity of platform arrangements. Participants noted that implementation and transaction costs vary widely, making standardisation extremely difficult. Still, there was broad consensus that improved visibility of fees is central to informed decision-making.

Holdings disclosure

The most contentious data point was holdings disclosure. Many tables rejected the idea outright on intellectual-property grounds. Top ten holdings, asset allocations and cash positions are considered – mostly by fund managers – to be commercially sensitive intellectual property. Disclosure of portfolio holdings was described as “nice to know but not important”, with claims that advisers gain little from the information relative to the competitive value it can destroy. Only one of the eight tables supported including portfolio holdings in the starter set.

Benchmarks

The workshop heard that benchmarks alone cannot solve the performance comparison problem. Several tables warned that SMAs can nominate benchmarks that do not reflect their risk positions, and some use cash-plus yardsticks that can make outperforming a benchmark appear easier than it is. Any meaningful benchmark must sit alongside standardised strategic asset allocation (SAA) and a clear breakdown of growth versus defensive exposures. Without that foundation, participants said, the benchmark tells advisers little.

Flag for tailored/custom elements

Custom or tailored-portfolio flags attracted minimal discussion, suggesting they’re a fringe issue in the required data. Several tables made no comment at all on this issue; one opposed public disclosure of any such details on principle; and another table simply accepted the item along with most of the list.

The discussions revealed there is appetite among researchers and asset consultants for greater SMA transparency and reporting consistency to address the challenges advisers face in demonstrating best-interest compliance when key SMA data is inconsistent, incomplete or non-comparable.

But it was also clear that practical issues remain around implementation dispersion, risk classification and benchmark accuracy, presenting significant structural hurdles that must be cleared before any standard might emerge.

But anything – even starting with the single issue of standardised fee disclosure – is better than nothing, and better to get started now than to wait for unanimous agreement on all issues.

The objective should be to release a workable starter data set and refine it over time.

As one speaker put it, “Don’t let complexity stop a simple solution getting up and running.”

Others that advisers are demanding a more robust basis for making meaningful SMA comparisons, that trustees are becoming more serious about product menu oversight, and that data requirements are likely to tighten regardless of industry sentiment, likely driven by regulation.

This was the real rallying cry from the session. It’s far better that the industry develops its own standards, however imperfect they may be to begin with, than be saddled with cumbersome and potentially unworkable requirements imposed by regulators.

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