As the growth rate of managed accounts continues, it will provide an accessible option for advisers who need to achieve scale, according to abrdn.
Con Koromilas, abrdn head of distribution, said: “For advisers that maybe don’t have the scale, don’t have the need for a bespoke solution but they’re looking for the type of capability that we’re focusing on, then they ability to access that very easily”.
Managed accounts had surpassed $100 billion for the first time, according to the Institute of Managed Account Professionals (IMAP) managed account census, which expected it to reach $200 billion in the next three years.
IMAP chair, Toby Potter, said the last three years had shown an accumulative average growth rate of over 20%, and Koromilas said he expected that rate of growth to continue.
“If you look out over the next five years, managed accounts are probably going represent roughly 50% of those platform assets, from $100 billion to $500 billion of the assets that sit on platforms,” Koromilas said.
“That’s a huge transition of terms of where of advisers business is going to sit in the technology they’re going to use across all the different platforms.”
A joint report by Investment Trends and State Street Global Advisors in April found 70% of planners were now using managed accounts, which Koromilas said was a significant number.
“That’s only going to continue and the conversations we’re having with most businesses is they know they need to create efficiencies if they’re not already using managed accounts,” Koromilas said.
“Managed accounts are not the panacea to everything, you do have different needs for certain types of clients so there’s always going to be the need for bespoke advice.”