Separately Managed Accounts – The most secure investment structure
Is financial crime as old as time itself? Perhaps not quite, but from dishonest weights and measures in trade, to Alan Bond, Storm Financial, and more recently Mayfair 101 and REMI Capital, it’s pretty old, pretty common and obviously something investors need to be wary of. This article will explore how Nucleus Wealth protects your investment (from itself and potential bad actors)?
Your investment with Nucleus Wealth is under the most secure structure.
Nucleus Wealth provides your investments through the market-leading investment structure of Separately Managed Accounts (SMAs). These can be set up in a variety of account types: Individual, Joint, Trust, Personal Super & SMSF. Which are managed by our platform administrator, Praemium.
What makes SMAs so secure?
Your assets are held in your own name with major global custodians JPMorgan (international securities), HSBC (Australian securities), and ANZ (AUD Cash). Nucleus Wealth serves as the model manager, instructing Praemium to make trades and manage your portfolio for you. This means Nucleus Wealth does not have any access to the funds of your separately managed account, or the ability to instruct the movement of those funds anywhere other than your bank account. The withdrawal process is also highly secure.
Are the assets safe with Custodians?
Yes. Client assets held with custodians are legally protected.
A custodian bank is a financial institution that holds clients’ securities (shares, bonds, etc.) for safekeeping. Custodians hold client assets in segregated accounts (this legally separates client assets from the custodian’s own – meaning the custodian doesn’t have access to use your assets).
The only exception where a client’s assets are integrated with custodian accounts is with Australian dollar cash. Authorised deposit-taking institutions (ADIs) or banks lend your money out and there is risk in that, however, Australian banks are some of the most well-capitalised and stable banks in the world. It is very very unlikely that anything would happen to the cash portion of your investments.
What if something happens to Nucleus Wealth?
Nucleus Wealth was founded in 2017, and has been consistently growing funds under management since then – the company is growing strongly. In the event that our fortunes change, we don’t hold any of your securities or cash. The only thing that will be affected is that Nucleus Wealth won’t be able to continue to manage your portfolio through Praemim’s SMA platform. In this event, you simply need to inform Praemium that you would like to appoint a new model manager to manage your portfolio. Alternatively, you can instruct Praemium to liquidate the securities or return the assets to your nominated account.
