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Managed accounts on the rise among advisers

Adviser Ratings says advisers are increasingly using managed funds as a way to increase efficiency and provide a more personalised service for their clients.

According to Adviser Ratings’ data, more than half (54 per cent) of advisers were using managed accounts in 2023, noting a 5 per cent increase from 2022.

The percentage of advisers using managed funds has continued to increase over the last five years, with 36 per cent in 2019, then steadily growing to 40 per cent, 42 per cent, 49 per cent, and 54 per cent from 2020 to 2023, respectively.

According to the latest data from the Institute of Managed Account Professionals (IMAP), there is now more than $150 billion in managed accounts in Australia.

Adviser Ratings has attributed this trend to rising industry demand for better efficiency and portfolio personalisation, and the rise of professional investment consultants.

“The main argument for managed accounts is ostensibly around more personalised solutions and efficiency gains,” Adviser Ratings said.

“According to Investment Trends’ February 2020 Managed Accounts Report, advisers using managed accounts saved 15.7 hours per week, equating to approximately 100 days a year.


“The rise of professional investment consultants has, of course, gone hand in hand with the growth of managed accounts and custom portfolio construction.”

Adviser Ratings noted that the growth has caused some controversy within the financial advice sector.

“Some argue that advisers are becoming mini fund managers, with a shift in margins from the old commission models creating new conflicts of interest,” Adviser Ratings said.

As the industry continues to evolve, Adviser Ratings said platform providers will continue to contend for funds under advice (FUA), noting the increased importance placed on quality investment options for advisers.

“Platform switching decisions are becoming increasingly strategic, with advisers positioned to leverage this transition,” it said.

“Investment options’ quality, particularly as it relates to managed accounts, suitability, flexibility, and customisation, along with competitive pricing, are central to remaining competitive in the eyes of advisers.”

According to Adviser Ratings, the way advisers are actively working to shape the financial industry warrants a comparison with the way Taylor Swift is transforming the music industry.

“Just as Swift has masterfully navigated the changes in the music industry, advisers are turning to more adaptable and personalised services, enhancing their relationships with clients in a way that mirrors the connection between Swift and her global legion of fans,” Adviser Ratings said.

“As we look to the future, the increasing integration of managed accounts is indicative of a sector that is not only adjusting to change but proactively shaping it.

“Advisers are not just keeping pace with industry shifts, they are leading the charge towards a more customised, efficient, and responsive financial advice sector.”