Managed accounts FUM reach record $144.5bn



Recent data has observed that funds under management (FUM) in managed accounts increased to $144.5 billion by the end of December 2022, up by 9.8% from the previous year.
In comparison, the figure stood at $131.65 billion in December 2021.
According to the FUM Census by the Institute of Managed Account Professionals (IMAP) and Milliman, managed accounts reported over $10 billion of inflows in the six months to 31 December 2022.
The census collected data from some 47 organisations, including Praemium, HUB24, Netwealth, Mason Stevens, DASH, and Insignia.
Toby Potter, IMAP chair, said the data demonstrated how managed accounts were a “core service” for advisers to assist their clients, even with the volatility of markets in recent months.
“A key advantage is that investment committees, asset consultants and investment portfolio providers are able to quickly effect strategies and tactics to minimise adverse effects from market fluctuations and then provide tailored information for advisers to communicate proactively with clients,” he stated.
“It is a much better outcome for advisers to provide explanations of decisions made in the clients’ interests than to deal with a wave of questions from individuals.”
Potter added: “A slowing in annual growth from previous levels of 20% to 30% is attributed by advisers with whom we speak to the pressures that advice has been under over the past 12 months.
“Anecdotal evidence suggests that a significant share of new client business is being invested through managed account strategies.”
The separately managed account (SMA) sector of managed accounts was growing quickly (18%) while MDAs witnessed a slight decline of -5%.
Victor Huang, Milliman’s practice leader for Australia, said, “The investment experience in 2022 has been a story in two parts. The positive sentiment in the investment markets in the second half of 2022 delivered a strengthened market with a 9.8% increase in the value of the ASX / S&P 200 Accumulation Index.
“These stronger markets have essentially regained the -9.9% fall in the prior six-month period and demonstrate the value of adhering to your investment strategy.”
Recommended for you
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.