The utilisation of managed accounts has tripled over the past ten years, indicating a trend that seems set to continue. An additional 16% of advisers have shown interest in these financial instruments, suggesting potential usage could expand to encompass three-quarters of advisers in coming years.
Insights from Sinead Schaffer, Vice-President and ETF and Model Portfolio Strategist at SSGA, highlight the influence of trends in the United States as predictive of Australian market behaviour. Such parallels indicate promising growth for managed accounts within the region.
The report, surveying 946 Australian financial advisers between November and January, underscores a robust demand for Separately Managed Accounts (SMAs) and Individually Managed Accounts (IMAs). This demand persists despite global economic challenges and inflationary pressures.
Financial advisers using managed accounts are now allocating, on average, about 71% of their clients’ total assets into such accounts. Notably, a record-breaking 48% of new client inflow is being directed to managed accounts, showcasing an increasing preference for this investment structure.
In the 12 months leading to December 2024, funds under management for these accounts surged by 23.2%, reaching a historic $232.77 billion. Performance remains the foremost criterion when advisers select managed accounts, underscoring the prioritisation of comprehensive asset allocation capabilities.
Meanwhile, the availability of these accounts on primary investment platforms has overtaken fees as the second-most important factor for advisers.
The majority of advisers recommend multi-asset class models, with 68% having done so in the past year. However, the number of models recommended to clients has decreased significantly, from 18.2 in 2024 to 12.1 in the current year, indicating a more streamlined approach to client portfolio management.
