BNY Mellon has rolled out SPECTRUM, the name of what it says is Asia’s first separately managed accounts business to give clients the blend of hands-on control and big-brand support not previously available in the region.

BNY Mellon has rolled out SPECTRUM, the name of what it says is Asia’s first separately managed accounts business to give clients the blend of hands-on control and big-brand support that has not previously been a feature of the region’s market.

The US firm has partnered with nine investment advisors to offer more than 20 investment strategies; it says the move gives high net worth individuals access to strategies and services that have been exclusive to institutional investors able to put in at least $100 million or more.

The venture is an attempt to fill a significant gap in the Asia-Pacific market place and tap into the experience BNY Mellon has acquired in other markets, AJ Harper, president and chief executive for BNY Mellon Managed Investments, the firm’s Asia-Pacific SMA business, told this publication in a recent telephone call.

“It is a global strategic initiative that brings together the expertise of BNY Mellon’s $1.5 trillion investment management business and the capabilities of its $27 trillion investment services business to build a managed account business specifically tailored for Asian investors,” he said.

The model involves open architecture menu of investment advisors; the SMAs are distributed to clients via private banks, advisors and other intermediaries. In the US, the bank, a top player in third-party managed accounts, has nearly $370 billion in assets under administration.

Separately managed accounts
SMAs are transparent, run by third parties and give clients clarity about their investments, he said. They also give clients control and options. In the past, institutions such as pension funds, were the only investors with access to the level of customization that SMAs offer, and minimum investments had to be in the region of $100 million. The retail investor could not get access to such channels in Asia before, he continued. In the past, Asian investors typically had two choices: having to accept a proprietary discretionary model with little freedom for the client, or, an off-the-shelf retail fund, Harper said.

In Asia, discretionary portfolios account for only about 6 per cent of all assets, highlighting the hands-on culture of the region, while the figure is around 40 per cent in the US and 20 per cent in Europe, Harper said.

Many entrepreneurs in the Asian market who make up much of the HNW segment want to keep a measure of control, he said, which suits the SMA model. “If you are a self-made entrepreneur your degree of trust might be limited when it comes to handing assets on,” said Harper.

“We believe it is a major breakthrough for Asian wealth management because individual investors will be able to do this with strategies managed by some of the world’s top investment advisors,” he said.

Advisors
The select investment advisers for SPECTRUM include: BlackRock Investment Management; BNY Mellon Asset Management Japan; Capital International; CenterSquare Investment Management; Henderson Global Investors; Lazard Asset Management; Mellon Capital Management Corporation; The Boston Company Asset Management, and UOB Asset Management.

The strategies on SPECTRUM provide a range of Asian, global and thematic investment portfolios; all strategies are available in an investor’s currency of choice and investors can customise any strategy by excluding a certain security, sector or country. SPECTRUM is open to individual investors at $1 million.