The popularity of managed accounts does not mean advisers are unquestioningly optimistic about them with many worried about their value proposition for clients and the possibility that the market is not yet ready for all types of investors.
The recent Census conducted by the Institute of Managed Account Professionals (IMAP) with Milliman found funds under management (FUM) in managed accounts in Australia stood at $79.29 billion, as at the end of 2019. This represented an increase of $7.9 billion compared to the first half of the year. According to IMAP’s chair, Toby Potter, the increase proved investors’ confidence in their financial advisers had grown.
“Advisers are investing more clients’ money in assets through managed accounts. They provide efficiency for advisers and they really allow clients to get that multi-asset or multi-managed portfolio in a pretty convenient package that is already rebalanced periodically,” AMP’s head of platform development, Shaune Egan, said.
According to A Guide to Managed Portfolios published last year by AMP’s MyNorth Managed Portfolios and IMAP, the growth in managed accounts was expected to accelerate over the next three years as managed portfolios addressed key business challenges such as practice efficiency, optimising client outcomes, service differentiation and reducing operational risk.
However, managed accounts, despite all the benefits they offer, were still not suitable for...