In today's fragmented SMA landscape, product manufacturers, fund managers, and investment consultants face a significant challenge: standing out in a market where inconsistent reporting makes true differentiation difficult. The launch of the SMA Reporting Standard (SMARS) offers vendors a compliance framework and a strategic opportunity to gain competitive advantage in Australia's rapidly expanding $200 billion SMA market.
The SMA market has quadrupled to approximately $200 billion in recent years, with $1 in every $2 now modeled in SMAs on portfolio construction tools like ProductRex. This explosive growth presents tremendous opportunities for vendors who can position themselves effectively. However, the current lack of standardisation creates significant barriers.
"At the moment, there is no standard set of disclosures for fee and asset allocation for SMAs in Australia," explains Nick Topham, Founder of ProductRex, a key figure behind the SMARS initiative. "Quite commonly, we see problems like SMAs that are identical, holding the same assets, being reported differently between different platforms."
For product manufacturers, this inconsistency creates several business challenges:
SMARS addresses these challenges by standardising several key areas:
For vendors, this standardisation offers compelling business advantages:
When advisers can easily compare SMAs across platforms, truly competitive offerings can stand out based on their merits rather than being obscured by reporting inconsistencies. Products with genuine competitive advantages in performance, fees, or investment approach become more visible when comparisons are standardised.
Vendors spend significant resources managing disparate reporting requirements across platforms. SMARS reduces this burden by establishing a single reporting framework, potentially reducing operational costs and streamlining your multi-platform distribution strategy.
Preliminary analysis of the 2025 Australian Financial Advice Landscape Report reveals that managed accounts have consolidated their traction with advisers and continue to replace the use of managed funds (-4%), model portfolios (-2%) and direct investments (-3%) by advisers. Early adopters of SMARS can leverage this as a competitive advantage, positioning themselves as adviser-friendly providers committed to transparency and efficiency. And as advisers continue looking for efficiencies in their practices, they increasingly demand standardised reporting.
In an era of heightened regulatory scrutiny, proactive participation in industry-led standards demonstrates your commitment to transparency and best practices.
As Nick Topham notes, "ASIC has repeatedly said they would prefer self-regulation by the industry before they have to step in and create their own standard." By voluntarily adopting SMARS, you position your organisation favourably in the eyes of both regulators and advisers.
Understanding adviser expectations is crucial for vendors. The Landscape Report shows that:
These trends create a clear business case for SMARS adoption. Products that facilitate adviser efficiency and transparency will increasingly win market share as the industry evolves.
Participation in the standard is straightforward and free for SMA managers, platforms, and product manufacturers. The process involves:
This simple process delivers significant business benefits, potentially accelerating distribution while reducing operational complexities.
Early adopters of SMARS will enjoy several competitive advantages:
These advantages create a compelling case for immediate action rather than waiting for the standard to become universally adopted.
While SMARS offers clear benefits, vendors should consider several implementation factors:
Despite these considerations, the relatively straightforward nature of SMARS implementation means most vendors can achieve compliance with minimal disruption to existing operations.
The growth in managed accounts appears set to continue, with SMAs replacing managed funds, direct investments, and model portfolios. This growth makes standardisation increasingly important. For product manufacturers, this creates opportunities and imperatives - those who adapt quickly to the standardised environment will likely capture greater market share.
As more advisers incorporate SMAs into their investment strategies, being an early SMARS adopter positions your organisation as a forward-thinking industry leader aligned with adviser needs and client best interests.
The SMA Reporting Standard represents a significant opportunity for product manufacturers, fund managers, and investment consultants in the Australian market. Addressing inconsistencies in reporting promises to enhance product visibility, streamline operations, accelerate adviser adoption, and demonstrate regulatory commitment.
As the $200 billion SMA market continues to evolve, standardisation through initiatives like SMARS will be crucial in determining which providers thrive in this competitive landscape. For vendors serious about maximising their market position, early adoption of SMARS represents a strategic opportunity to align with adviser expectations while gaining a competitive advantage.
What can your organisation do today to leverage SMARS?
By taking these steps today, you position your organisation for success in tomorrow's increasingly standardised SMA landscape, turning what could be seen as merely a compliance exercise into a genuine competitive advantage.