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Managed accounts inch to $80bn

Managed accounts assets continue to grow steadily, having hit nearly $80 billion despite setbacks caused by COVID-19.

The Institute of Managed Account Professionals' latest census found asset growth for the sector was stable, reaching $79.71 billion at the end of June 2020.

Inflows comprised $3.54 billion of the total assets for the period. Funds under management increased $420 million from the December 2019 figure of $79.29 billion.

Managed discretionary account services (MDAs) take the lion's share of FUM with $35.28 billion followed by separately managed accounts (SMAs) at $28.06 billion.

Commenting on the market volatility for the period, Milliman head of capital markets for AustraliaVictor Huang said the value of the ASX/S&P200 Accumulation Index fell -10.42% compared to the 3.06% increase in the Accumulation Index.

"This helps explain the reason why overall FUM didn't move when at the same time there was positive funds inflow and newly reported FUM," Huang said.

IMAP chair Toby Potter said: "Advisers tell us, inflow is principally from migrating existing clients from advice only services to managed accounts to provide a better client outcome."

Potter added that this has been a significant part of the managed accounts story as many advisers are keeping clients' best interest front of mind and assessing if managed accounts are fit for purpose.

A client whose portfolio is subject to continual review and management is likely to be better off as opposed to a client who gets ad-hoc review, Potter said, noting that being able to execute effectively in real time adds value, particularly at a time like this.

Morgan Stanley predicted five years ago that managed accounts will reach $60 billion by 2020 (MDAs sat at $13 billion at the time).

Read more: FUMAdvisersASX/SAustralia IMAPInstitute of Managed Account ProfessionalsMillimanMorgan StanleyP200 Accumulation IndexToby PotterVictor Huang
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