Specialist financial services companies and larger banks are looking to grow their separate managed account (SMA) businesses over the next two years, Lonsec said.
Lonsec conducted new research into SMA platforms as it saw an increasing interest from investors.
"In essence, usage of SMAs will likely grow thanks to both greater demand from advisory groups and other investors and to new and competitive solutions that are delivered by banks and other companies that are strategically committed to SMAs," Lonsec's general manager Michael Elsworth said.
Lonsec also found SMA operators work differently in communicating with model portfolio managers, advisers and investors.
"This new research defines the language and key concepts underlying SMAs in Australia and we expect the research to grow and become a sector in its own right over coming years," Elsworth said.
Lonsec gave ‘approved' ratings to each of the five SMA platforms it reviewed, which make up over $2 billion in assets under management and over half of the total SMA market (defined as funds tracking model portfolio).
