The Cerulli EdgeManaged Accounts Edition answers top questions asked by clients in 2009.
– Do asset managers create modified versions of their institutional separate account strategies for distribution through their retail separate account programs?- Who are the top third-party vendors (TPVs) and what is the outlook for this channel?- What factors are driving the usage of exchange-traded funds in managed account programs?- Are UMAs going to erode future growth of separate account consultant programs?- What is the future of packaging, will advisors have more or less control over portfolio construction?
Other findings from this issue include:Data suggests that sponsors and due diligence groups tend to gravitate toward separate account strategies with fewer holdings and lower turnover. Creating a strategy with a low number of holdings and turnover could be beneficial to managers whose existing institutional strategies have significantly higher turnover and a larger number of holdings than the average retail separate account strategy.
Over the past year, ETF usage has increased significantly within managed accounts. ETF marketshare in managed accounts now stands at 5% or $83.9 billion as of 3Q 2009, an increase from only 2% of total managed account assets in 3Q 2008.
UMA programs have shown underwhelming growth since the industry started rolling out programs in earnest between 2003 and 2006partly because advisors have been reluctant and unmotivated to migrate client accounts from other managed account programs into UMA programs.
D.C.