A recent report published by IMAP (The Institute of Managed Account Professionals) in conjunction with Millman has shown further rapid growth in investments held within Managed Accounts.
As of 31 December 2021, Managed Accounts Funds Under Management (FUM) was $131.65B. The figure represented an astonishing growth of $21.06 billion in only six months from 30 June.IMAP chair Toby Potter said, "The growth rate in managed accounts is accelerating to the point where it is approaching 40% per year, and this growth is up from approximately 30% p.a. as recently as June 2021."
The growing use of Managed Accounts by financial advisers holds several significant advantages for investors and advisers.
"The value which the systematic approach of managed accounts embodies is even more critical in the worldwide crisis we are currently facing." Potter continued.
Jerome Lander, Dynamic Asset Portfolio Manager, along with many of the world's leading investors, has warned of an impending change in economic cycles for several years. It is now abundantly clear that the change is well underway with rising inflation and interest rates. The uncertainty this creates for markets and the economy is echoed in the outlook of individual investors. It's a change that places pressure on advisers to deliver active investment management and to manage risk within portfolios. This becomes challenging to execute unless advisers use a programmatic platform like managed accounts.
The increased cost of compliance further magnifies the challenge for advisers. Typically to make investment changes a Statement of Advice, or Record of Advice, must be produced. Statements of Advice are costly and time-consuming to develop, and complex to implement. Furthermore, the strategic direction of compliance is increasingly narrowing in on fit-for-purpose advice and investments. That is, advice and investments must reach beyond just catering to an investor's risk profile and be designed for their actual financial circumstances and needs. Under the FASEA regulations, there is a requirement to also treat all clients equally, which is very difficult when executing individual advice through a review cycle. While yet to be tested, the ability of a portfolio to be actively managed to changing market circumstances across the board must surely follow.
To help advisers the investment management of Managed Accounts portfolios can be delegated to a specialist portfolio manager. When an adviser chooses to implement a Managed Accounts structure with specialist management, there is a significant increase in the ability of an investor's portfolio to be adapted to the current risk circumstances in a timely manner. Practically, Managed Accounts are the only way an adviser can keep pace with change across their entire book of clients and comply with the requirement to treat all clients equally.
Focus on client needs
A significant advantage is gained by advisers who can build their business around the discrete needs of individual investors at scale. Dynamic Asset has created a Managed Account solution that precisely delivers that ability.
Five outcomes-based portfolios provide specific risk-adjusted return targets for short, medium and long term investment. When deployed with their unique Portfolio Management Tool, portfolios can be blended to target specific client risk-return objectives across any entity, for any goal.
Operating under a Managed Account structure, Dynamic Asset as the portfolio manager is tasked to dynamically allocate assets within the portfolio to realise the opportunities that exist within a broader range of assets than the narrower asset classes typically used in risk profile based portfolios. This can occur without the need for time-consuming client discussions, explanations, SoA's / RoA's, authorities and individual implementation, all of which delay time-relevant changes.
Dynamic Asset can help
Contact us today to discover more about how the Dynamic Asset Managed Account solution can help your business and clients.
