Managed account performance continues to accelerate: Praemium

Based on Praemium research conducted on 150 advisers, managed accounts are reporting “unprecedented” client outcomes, with 88 per cent experiencing positive results.

The research indicated that three in five advisers have adopted managed accounts, with 81 per cent having a “strong understanding of them”, a fact that positions Australia as an “emerging global leader in the solution”.

The data revealed that separately managed accounts (SMAs) are the most popular structure, with 88 per cent of advisers opting for the model.

As stated by Praemium: “The primary drivers for adoption are operational efficiency (72 per cent of managed account users cite this) and access to professional investment management (67 per cent), benefits that translate directly into scalability and time savings.”

Managed account uptake has been a growing trend with financial advisers for a while now. In July, APIR Systems reported that in FY2024–25, there were 719 managed fund registrations. Of particular note was the number of SMA registrations, which sat 25.7 per cent higher than the five-year rolling average to that point.

“We have seen consistently higher levels of registrations, particularly of managed investment and managed account products, for several years now. The data reflects a normalisation of industry activity post the uncertainties created by COVID,” APIR chief executive Chris Donohoe said at time, sharing his belief the current financial year will continue to see this kind of growth.

Groups such as AMP have also invested significantly in growing their managed account offerings.

A large part of this uptake and investment are the perceived efficiency gains managed accounts can give advisers.

Data in the Praemium research highlighted that 25 per cent of managed accounts users are reclaiming a full day of work per week on portfolio management actives, with an additional 28 per cent saving between four and six hours a week through operational efficiency.

Praemium noted that “over half of those using the solution noted that adopting managed accounts has made it easier to scale their business, with 35 per cent stating it allowed them to take on more clients”.

“Managed accounts are enabling advisers to shift their focus from portfolio construction to strategic advice and client relationship management,” Praemium chief strategy officer Denis Orrock said.

“This evolution is critical as practices look to scale and differentiate in a competitive environment.”

However, scepticism does remain among some non-users. Two main issues that Praemium cited include the perceived loss of control some advisers feel would happen when using managed accounts, as well as concerns around value.

Despite this, the research found that 63 per cent of non-users are considering adopting this platform model.

The research also indicated what Praemium believes is the “importance of platform integration”.

Tools for portfolio reporting “and seamless connectivity with financial planning software” was cited by 69 per cent and 61 per cent of respondents as essential. The majority of those surveyed (55 per cent) also cited tax reporting tools as essential.

“These integrations are not just nice-to-haves, they’re foundational to delivering a streamlined experience for both advisers and clients,” Orrock said.

“As the managed account space evolves, so too does our platform, with a clear focus on scalability, transparency and adviser efficiency.”