MDA Structure
This section on Managed Discretionary Account (MDA) structure helps you familiarise with the regulatory framework through which we provide our service to you. MDA service is a type of discretionary investment management. We manage the wealth of our clients through this structure. The financial advice that we provide is part of the MDA service that we provide.
MDA service as digital advice
QuietGrowth provides its service through the MDA structure to enable clients to delegate the investment management and trading discretion for exchange traded funds and other securities to QuietGrowth. This means QuietGrowth will invest in financial products on your behalf without prior reference to you for each transaction (such as buy trade and sell trade).
The 'general financial advice' and 'personal financial advice' that we provide — as part of our MDA service — are in the form of digital advice.
MDA Contract
A client must enter into an MDA Contract with QuietGrowth prior to accessing our MDA service. As part of the onboarding process for MDA service, QuietGrowth takes into account your objectives, financial situation and needs. Then a 'Statement of Advice and MDA Contract' is generated for the client, and she needs to sign the document digitally. This document includes:
- Statement of Advice (SOA);
- Investment Program;
- Client Agreement;
- Link to Product Disclosure Statement (PDS), if any, of each investment product such as an ETF that forms part of the client's QuietGrowth Model Portfolios; and
- MDA Application.
Refer to the format of the Client Agreement of MDA Contract.
Advantages of MDA
An important advantage of the MDA structure is that the client can delegate the investment management and trading discretion for securities to QuietGrowth.
Another important advantage of investing through an MDA is that it allows us to hold your securities under your own unique Holder Identification Number (HIN). A new HIN under your name is created for you at the time of account creation. Because your securities are held in the 'individual HIN' structure, you are the legal owner as well as the beneficial owner of the security holdings.
Comparison with other structures
A Managed Discretionary Account is a subset of managed accounts. Your QuietGrowth account is a Managed Discretionary Account. So, it is also a managed account.
Also, your QuietGrowth account is not a Separately Managed Account (SMA). Both SMAs and MDAs are the two major types of managed accounts. However, we believe we can provide you with a better investment management service through the MDA structure.
Moreover, your QuietGrowth account is not a managed fund. We believe the MDA structure has key advantages over the managed fund structure. For example, in an MDA with 'individual HIN', you will have beneficial ownership of the securities in the portfolio instead of owning units in the managed fund.
QuietGrowth is an online discretionary investment manager (ODIM). This is because of the MDA structure through which we serve the clients.
Multiple Portfolios and MDA Contract
You as a QuietGrowth client can invest in more than one portfolio, each having a different risk tolerance, and a different investment goal. Given this flexibility, it should be noted that all your QuietGrowth portfolios in your QuietGrowth account constitute one single Managed Discretionary Account (MDA) in your name.