Managed account growth slowed last year, amid challenging market conditions and an uncertain advice landscape according to the latest census from IMAP and Milliman.
In the second half of the 2022 calendar year, funds under management in managed accounts increased by $8.7 billion to a new high of $144.5 billion.
However, FUM increased 9.8 per cent over 2022, despite double-digit percentage growth in the proceeding years.
Despite the slow growth, $10 billion of inflows were still added in the second half of 2022.
The research found the slowing in annual growth of previous levels of 20-30 per cent is attributed to the pressure advisers have been under in the past 12 months, according to IMAP chair Toby Potter.
“If we end up back in a more stable environment in which there is less regulatory change, then we’ll go back to an environment which is conducive to advisers continuing to adopt managed accounts,” Potter tells Professional Planner.
Managed accounts reached the $100 billion threshold at the end of financial year 2021 and research from Investment Trends a year ago found advisers using managed accounts are the majority.
Growth in managed accounts since 2015
Source: IMAP and Milliman
ETFs on the up
Potter says ETFs as a component of managed accounts continue to rise, accounting for 18 per cent of the ETF market.
“There is a wider variety of investment options available through ETFs, we’re seeing them being used more as part of the investment mix within a managed account,” Potter says.
“ETFs have been growing as a component of managed accounts, managed accounts have been growing as a proportion of ETF issuance.”
Research from Investment Trends last year found the growth of managed accounts and ETFs has come at the expense of direct flows into managed investment options, but the researcher noted managed accounts and ETF flows often back into fund managers.
FUM results split between managed accounts types
| Category | 31 Dec 2022 ($b) |
Dec 21 to Dec 22 growth ($b) | Dec 21 to Dec 22 growth (%) |
| SMA/MIS | $80.61 | $12.42 | 18% |
| MDA services | $50.07 | -$2.69 | -5% |
| Other services | $13.85 | $3.15 | 29% |
| Total | $144.53 | $12.88 | 9.8% |
Source: IMAP and Milliman
