The CommSec Adviser Services Investment Advisory Team is a specialist provider of direct investment portfolio construction services, portfolio management, and research services to the intermediary market. Advisers who subscribe to our Dynamic Model Portfolios, or bespoke portfolio construction service will have access to a dedicated research team and a range of support services;
- Access to the full suite of Dynamic Australian Equity , ETF, Hybrid and Warrant Model Portfolios
- Bespoke portfolio review and construction service for clients requiring a more tailored solution than Model Portfolios
- Full research, basis of advice support and template SOA wording for all portfolios
- Customised monthly, or quarterly Model Portfolio reports, sector updates, stock commentary and associated analytics
- Ongoing phone and email support for advisers
Investment Philosophy & Process
Our research team employ a multi-layered fundamental investment strategy, which combines a top-down and bottom-up approach to asset selection.
Our top-down approach utilises a number of different economic and industry indicators in order to identify key macro, industry and sector trends. We then overlay these outputs with our bottom-up stock and company analysis. The team endeavours to construct a portfolio that provides a high quality exposure that is in-line with the chosen investment mandate, whilst being broadly benchmark aware. The guiding principal of our portfolio managers is to match up broader economic trends and nuances, with individual company strengths and opportunities.
Our research team does not employ a specific investment philosophy such as value, GARP or best of breed. We identify individual company strength and relative value through the implementation of traditional fundamental benchmarks such as ratio analysis, balance sheet measures and the underlying effectiveness of company management.
The combination of these strategies, provides an optimal portfolio construction framework which is subsequently tested through a proprietary risk management matrix. We do this to ensure an appropriate level of risk for the portfolio on an ongoing basis. This 'triangulation' of investment approaches eliminates individual biases and delivers consistency in the investment strategy. It also ensures that our portfolios consist of high quality stocks, and ensures a low degree of turnover for long term investors.
In order to achieve the highest quality outcomes, our research team has access to some of the largest and most renowned institutional tools and infrastructure available today, including Morningstar Direct, Bloomberg, Ibis, and CBA Institutional research. An experienced investment committee oversee the investment strategy, with independent members of the committee having an equal measure of authority and input. This committee is highly experienced and meet at both regular and ad hoc intervals, to ensure the investment strategy adapts to the regularly changing economic and investment environment.
The end result is a suite of portfolios suitable for a wide range of investors that are intended to outperform their given benchmarks over the medium to long term.
What are Dynamic Model Portfolios?
Dynamic Model Portfolios are indicative direct investment portfolios, tactically managed in line with a pre-defined investment strategy and mandate. Weightings within the portfolio are dynamic in nature, meaning that they evolve with the market and the underlying direction of each investment. This approach differs from many of the ‘static’ model portfolios used on platforms today.
Are Dynamic Model Portfolios available to Self-Managed Super Funds?
Absolutely – We have specialised in direct investment portfolio construction for many years, with over 70% of all portfolios being used under an SMSF structure. The new Dynamic Model Portfolios cater for investors across all risk profiles, and in different stages of their investment lifecycle.
How are trades against the Dynamic Model Portfolios placed?
You can either place the trades online yourself or insource to us, where you will take advantage of our state of the art trading technology, at no additional cost.
Can the Dynamic Model Portfolios be managed online?
Yes, you can manage the portfolios online. You will receive the same access to view trade history and run reports, as you would with a normal trading account.
How is the performance of the Dynamic Model Portfolios tracked?
We issue new institutional-quality portfolio reports in the first week of every month showing portfolio performance, attribution statistics as well as underlying stock, asset or portfolio commentary. In some cases these reports can be white labelled for Dealer Groups and sent to clients who are following the models each month.
How often are changes made to the Dynamic Model Portfolios?
Our aim is to keep portfolio turnover to a minimum. However, in today’s fast and sometimes volatile markets, it is imperative that the portfolios are managed strategically. There are predefined turnover guides for each portfolio, but turnover is not tied to a regular or predetermined rebalancing cycle. This approach provides us with the flexibility required to ensure stock and sector allocations are appropriate, and in-line with the portfolio parameters as well as underlying market conditions.
What is the investment philosophy and process?
For a copy of our comprehensive investment guide, contact the CommSec Adviser Service Investment Advisory team on (03) 9675 6854 (8:30am-5:30pm Monday to Friday).
How will I be notified of changes to the Dynamic Model Portfolios?
Along with the portfolio reports issued at the start of each month, you will receive daily market updates and stock or asset-specific market-sensitive announcements as they happen. If we change our view on a stock or asset within the portfolios, you will be notified immediately.
Statement of Advice (SOA) or Record of Advice (ROA) wording reflecting the basis of advice and reasons for the changes will be provided in these notifications to you. You can then implement the ROA at your convenience, and place trades once the authority from your client is in place.
What happens if I can’t make the suggested changes to the Dynamic Model Portfolios immediately?
We understand that the advice process can take time. Dynamic Model Portfolios, whilst being prescriptive in nature, are primarily designed to provide you with a system, or process to manage your clients’ direct investments.
If the client falls outside of the model portfolio for a short period, it will mean that the client could experience a tracking error; however given the nature of markets it is important to note that any tracking error will not always work against the client.
By providing SOA, or basis of advice guidance plus various trading tools and transaction calculators, we can help you ensure changes to portfolios are made in a timely manner - either in bulk, or at a client-by-client level.
Is there a cash component within the Dynamic Model Portfolios?
Yes, there will always be a cash component reflected in the model portfolios. In the Australian equity portfolios, the cash component will range between 2% and 10%, depending on the portfolio mandate. This is done to ensure corporate actions can be funded and rebalances and stock replacements can occur without the need to draw down additional cash.
In addition, linking the Commonwealth Bank Accelerator Cash Account means you also receive access to automatic dividend redirection for all distributions linked to the model. Share registries will be automatically notified when shares are traded.
Are the Dynamic Model Portfolios managed for tax optimisation?
Individual tax outcomes or capital account implications are not factored into the investment process, unless specifically outlined in the mandate of the portfolio.
What if my client has existing holdings and would like to transition into a Dynamic Model Portfolio?
Our CommSec Adviser Services Investment Advisory team can assist you in the process of transition by preparing a comprehensive transition report, with SOA template wording, transaction summary and associated independent research. The team can also construct a tailored or bespoke portfolio for clients who you think do not suit a model portfolio at an additional cost.
How much does the Dynamic Model Portfolios service cost?
To suit the changing needs of an advice business, you can now choose to subscribe to our Dynamic Model Portfolios on a per client basis. By choosing to subscribe, you open up the opportunity to deliver predictable, cost effective portfolio construction, research and management services to your client base.
Please contact your CommSec Adviser Services BDM or the Investment Advisory team for more information around our competitive pricing alternatives and rates.
How many Dynamic Model Portfolios does CommSec Adviser Services Investment Advisory issue?
At this stage, we issue a range of objective based Dynamic Model Portfolios:
- Hybrid Model Portfolio
- Instalment Warrant Model Portfolio
What does the Dynamic Model Portfolios service include?
- Access to all Dynamic Australian Equity and Instalment Warrant Model Portfolios
- Full research, basis of advice support and template SOA wording
- Customised monthly Model Portfolio reports with sector updates, stock or asset commentary and associated analysis
- Daily CommSec Adviser Services Investment Advisory newsletter or morning bulletin
- Ad hoc market sensitive company and RBA announcements
- Premium access to the CommSec Adviser Services Trading Platform (live pricing) including multi-stock and multi-client trading
- Phone, email and research support from the Investment Advisory team
- Full trade execution capability including bulk or algorithmic trading
How do I get started?
To get started, you first need to ensure you are registered with the CommSec Adviser Services Platform. You can do this by contacting your CommSec Adviser Services BDM, or calling the CommSec Adviser Services Investment Advisory team on (03) 9675 6854 (8:30am-5:30pm Monday to Friday).
This information is only for AFSL Advisers. As this information is not advice and has been prepared without taking into account your client’s objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your client’s circumstances