Managed accounts approach $200bn with strong H2 gains
Data from the Institute of Managed Account Professionals (IMAP) has seen funds under management (FUM) in managed accounts approach $200 billion.
The organisation’s FUM census, which collects data from 46 organisations ranging from large platforms to individual licensees, said FUM in the six months to 31 December rose from $161 billion to $194 billion, a rise of 20.4 per cent. This was attributed to growth from strong inflows of $15 billion and positive market gains.
The half-yearly gains of $33 billion compare to gains of $17.2 billion in the first six months of the year.
However, most of this can be attributed to market performance as inflows rose by a smaller volume from $11 billion to $15 billion.
Breaking it down by product type, separately managed accounts (SMAs) and managed investment schemes (MIS) had $108.8 billion, managed discretionary accounts (MDAs) had $61.6 billion, and other services accounted for $24.3 billion.
On an annual basis, the sector had grown FUM by $50.3 billion since 31 December 2022.
Toby Potter, chair of IMAP, said: “The widespread adoption of managed accounts by licensees, their advisers and by their clients is creating efficiencies in advice practices, and benefitting from professional portfolio management and the ability to manage diversified portfolios more effectively.
“The platform providers’ expansive use of SMAs as a vehicle to service the adviser/licensee market help drive FUM growth. Managed discretionary accounts (MDAs) are continuing to grow too helped by the tailoring, efficient implementation and operation of MDA programs.”
Victor Huang, practice leader at Milliman Australia, added: “The investment markets have recorded improved growth in the second half of 2023 with a 7.6 per cent increase in the value of the ASX/S&P 200 Accumulation Index, giving an annual growth rate of 12.1 per cent in 2023.
“The subsiding inflation data, receding recession risk, along with the tech sector growth, were key drivers for the strong equity performance and provides a positive platform for growth in 2024. Concerns around service inflation remaining elevated and geopolitical uncertainty around the US election continue to be potential headwinds.”
Money Management previously covered how there has been a 50 per cent rise in advisers’ usage of managed accounts, with 54 per cent of advisers surveyed by Adviser Ratings reporting that they use the vehicles for all or a portion of their clients.
This is up from 36 per cent in 2019, and Adviser Ratings attributed this to their personalisation options, compliance benefits and efficiency gains.
AUTHOR
Laura Dew
Recommended for you
At the halfway point of the year, consolidation pressures continue to drive financial services M&A with three areas identified as targets for asset and wealth managers, according to PwC’s mid-year outlook.
With advisers expressing a reluctance to invest in cryptocurrency, advised clients are tending to have a smaller allocation to the asset than their unadvised peers.
After surviving significant evolutions of the Australian financial advice industry, The Advisers Association is now celebrating a century of advocating for advisers.
ASIC is calling on licensees to review their client onboarding practices to avoid vulnerabilities associated with share sale fraud, noting particular concerns in the use of white labelling services.
