Funds under management in Managed Accounts increased 9.08 billion dollars in the second half of 2017 and 17.87 billion across the whole year, according to research by the Institute of Managed Account Professionals (IMAP) and Milliman.
As of 31 December, 2017, $57.05 billion were invested in Managed Accounts, up from $39.17 billion at the end of 2016.
Money Management is currently investigating what’s behind this rise of Managed Accounts and who the true winners are. Advisers who complete our survey will be in the running to win a bottle of Penfolds Grange Hermitage.
While 1.7 billion of the increase found by Milliman and IMAP came from companies who were not included in the 2016 data, over half the growth was from organic growth from advisers increasingly viewing Managed Accounts as their service of choice for certain client segments.
Milliman’s Australia practice leader, Wade Matterson, estimated that 41 per cent (or $4 billion) of the increase in the six months to 31 December, 2017, could be attributed to the “very buoyant investment markets”.
He pointed to the fact that the ASX/S&P 200 Accumulation Index increased by 8.37 per cent in that period, compared to a one per cent market growth factor for the six months previous to it.
Chair of IMAP, Toby Potter, said that clients were increasingly expecting services that were often best provided by Managed Accounts.
“Things you used to be able to do with a $100 million portfolio you’re now expecting to do with about $1 million,” he said.
“We’re going to see other investment options come up that are tailor-made for Managed Accounts.”
According to Potter, every major platform was now in the Managed Account market and starting to see strong in-flows. He said that they were also all showing “significant commitment to growing and developing that”.
He said that consolidation through acquisition was helping smaller platforms grow, with the sector starting to experience activity normally happens in established markets, such as increased mergers and acquisitions.