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Do managed accounts really improve client relationships?

Do managed accounts really improve client relationships?

The client engagement and business efficiency benefits of managed accounts have been well documented, but there has been little to demonstrate the measurable benefit to a practice of using them. Praemium has undertaken research in conjunction with advice consultancy practice Business Health to uncover the quantifiable benefits. document.addEventListener('DOMContentLoaded', (event) => { window.dataLayer = window.dataLayer || []; dataLayer.push({ 'event': 'articleTags', 'article_tags': [] }); });

Client engagement benefits and investor satisfaction enhanced under managed accounts.

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As an investment solution, managed accounts offer investors many unique benefits; professional portfolio management, transparency across portfolio holdings and pricing information, the ability to customise portfolios, individual tax positions and beneficial ownership.

These investment benefits, whilst an important contributor to helping investors achieve their financial goals, are only part of the value managed accounts can deliver advisers and their clients. The profile of a typical investor is changing. Managed accounts can help advisers to meet the changing needs of their client base and provide a better, more relevant service to their clients.

Changing investor dynamics and how managed accounts can help

Smart technology has been one of the biggest drivers of changing consumer behaviour over the last decade. Clients have access to more information than any previous generation in history, they engage with brands over social media, expecting immediate responses and prompt resolution of problems.


of customers today prefer self-service over human contact.

Source: Aspect


of clients believe their adviser should offer a digital solution.

Source: Accenture


of the global workforce will be comprised of millennials by 2025.

Source: Deloitte

Tapping into the wealth transfer opportunity

The intergenerational wealth transfer continues to present an unprecedented opportunity for advisers to capture the next generation of wealth and clients who will likely be needing advice, plus grow business revenue.

The millennial generation have grown up with technology, they are comfortable using it and are used to having information at their fingertips 24/7. A digital service is not a bonus to them it’s an expectation. To attract and retain this growing group of clients, an engaging interactive digital solution is imperative.

Some advisers may argue that their current client base generates a sufficient income for their business and therefore the millennial segment is not important. However, with millennials likely to be one the larger recipients of the wealth transfer, they’re a segment that can’t be ignored.

Source: 1 McCrindle 2. www.fa-mag.com/news/almost-all-heirs-leave-parents-advisor-firm

$3 trillion

in wealth will be transferring from one generation to the next in Australia over the next decade.1


of the nation’s wealth is held by the Boomers who will be passing it on in the decades to come.1


of those who inherit do not stay with their parents’ financial adviser.2

Managed accounts not only offer a transparent solution with a wide choice of customisable investment options, with the right technology partner they can also deliver detailed, tailored reporting via a digital portal that the investor can access 24/7. This allows advice businesses to offer a compelling digital solution in a cost-effective way, that will service the needs of a new investor base.

But a digital solution is not the only expectation. Clients perceived value from their adviser is the time their adviser spends with them to understand their financial objectives and ensure they are on track to meet their goals

Our research shows that without the burden of many of the back-office/non client facing activities, advisers using managed accounts will be able to redirect much of this time into building stronger and deeper relationships with their clients.


of the managed account users reported improved levels of client engagement.


stated they are able to spend more time spent with their clients.


of non-managed account users “interact” with their best clients more than 10 times a year, this jumped to 42% for managed account users.

Client engagement increasing retention

Further reinforcing the importance of investing time to build strong and holistic relationships, managed account users spend longer with their clients during the review process – 32% of managed account users reported that on average each client review meeting runs for at least 90 minutes compared to just 14% of non-managed account advisers

Importantly, this increased level of engagement has not come at the expense of the number of client relationships – on average each adviser using managed accounts services 226 clients compared to an average of 214 clients for the non-managed account advisers.

This deeper level of engagement also became evident in the analysis of client retention rates – over half (51%) of the managed account users reported zero key client attrition over the past 12 months compared to 39% of non-managed account users.

The enhanced client engagement also translates into higher revenue per client, with managed account clients generating 64% higher revenue than their non-using peers.

And it’s not just client revenue that increases. On average, advice businesses using managed accounts are growing at a much faster rate and ultimately generating more revenue per adviser and higher overall profitability.

Praemium’s research report also delves further into the impact using managed accounts has on practice revenue and profitability.

Disclaimers: The information enclosed in the document was sourced from research conducted by Business Health during the period 1 January 2019 and 14 August 2019. The material contained is an extract of a more complete report and represents confidential information and intellectual property residing within Business Health Pty Ltd. . Full information on the methodology of the research can be found when downloading the complete report. The information included above has been provided on the basis that it will not be conveyed to any third party without the prior approval of Business Health Pty Ltd or Praemium Australia Limited. Business Health Pty Ltd makes no representations or warranties as to the validity, relevance or accuracy of the information provided nor of the capability of any report to achieve any purpose resulting from its completion. Praemium Australia Limited and Business Health Pty Ltd accept no responsibility whatsoever for any loss or damage suffered by any user of the services of Business Health Pty Ltd or Praemium Australia Limited. Praemium has not taken into consideration your personal circumstances or financial objectives and nothing in this document should be construed to be financial product advice.