In the United States, unified managed accounts (UMAs) are becoming the portfolio management model of choice for wealthy individuals and their financial planners, new research has found.
The report by Boston-based consulting firm Celent, titled Unified Managed Accounts: Developments in UMAs and Overlay Technology to Provide Total Client Solutions, found 75 per cent of responding technology firms expect the UMA to surpass the separately managed account (SMA) as the open architecture wealth management account of choice for the US market within the next five years.
The UMA is an evolution of separately managed accounts (SMAs), with asset allocation now done across all financial asset classes; increased cost efficiencies; improved rebalancing techniques; and results and holdings reported as a single client account, instead of separate accounts for each asset class.
According to Celent, financial advisers like the UMA approach because they gain complete visibility of all of a client’s financial assets.
“The UMA represents a highly customised solution that is easily managed from the adviser’s desktop and yet is accessible remotely by the client for data and reports,” says Robert J Ellis, senior vice president of Celent’s Wealth Management practice and co-author of the report.
Celent projects the UMA market to total US$73 billion ($104.7 billion) at the end of 2008, after accounting for significant asset declines.
By 2013 approximately $327 billion in client household assets will be managed through UMAs, the consultant says.