The profitability uplift of managed accounts
Firms using managed accounts for more than three years have achieved 79% more profit per owner than firms not using managed accounts, according to research from Praemium.
The research was conducted with advisory consultancy Business Health, assessing 224 advice practices with 76 of those using managed accounts. The data assumed a $100,000 notional salary package for each working owner.
Praemium chief distribution officer, Martin Morris, said: “The quantifiable benefits of using managed accounts are incredibly compelling and those firms fully embracing managed accounts are thriving”.
Morris said it was interesting to see how client-centric and business-minded those firms who were using managed accounts for most of their client base had become.
The research also found that firms with three quarters of their client base falling under managed accounts had turned a notional profit per owner of 127% higher than non-users.
The incremental benefits of embracing managed accounts as a whole of business solution were also seen in the revenue figures.
Those firms using managed accounts for 75% of their client base had an 84% uplift in practice revenue and a 200% uplift in revenue per client.
It also showed investors were benefiting from more time in client-facing engagements with longer client meetings and more in-depth reviews, with 89% of firms using managed accounts spending 60 minutes or more in client reviews.
AUTHOR
Liam Cormican
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
