Managed account funds under management (FUM) has grown to $232.77 billion off the back off strong investment performance in the second half of the 2024 calendar year.
The latest managed account census data released by the Institute of Managed Account Professionals showed managed account FUM was $232.77 billion as of 31 December 2024, up from $188.85 billion the year before.
The research, done in conjunction with Milliman, noted managed accounts reported net inflows of $14.35 billion made up part of the $43.92 billion difference with the rest due to investment performance.
The past year also marked managed accounts reaching the $200 billion milestone, when it recorded $205.58 billion in FUM in the June 2024 census data.
Separately managed accounts (SMAs), maintain a 64 per cent market share, while managed discretionary accounts (MDAs) hold 25 per cent of managed account FUM.
The results show a 35.9 per cent increase from $108.82 billion to $147.99 billion for SMAs and a 4.7 per cent increase from $55.64 billion to $58.28 billion for MDAs.
The research collected data from 48 organisations with different offerings to show a wide range of the market. It shows the leading eight organisations which are individually managing $10 billion plus in FUM remain in position, but three organisations are gradually catching up.
The research showed the investment markets’ growth between June and December 2024 with a 6.9 per cent increase in the value of the ASX/S&P 200 Accumulation Index and an annual 11.1 per cent increase between December 2023 and December 2024.
The growth in managed accounts over the past few years comes after ASIC suspended its review in the sector in 2019 which detailed concerns about low barriers to entry in the MDA sector.
The concerns raised by ASIC suggested the MDA market had “increased risk of misleading and deceptive past performance figures” compared to other financial services as well as the potential for practices to inappropriately use MDAs to boost revenue.
IMAP chair Toby Potter produced an opinion piece reasoning ASIC did not need to act upon its review as the growth predicted by the corporate regulator has not come to pass with 256 MDAs up from 251 in 2019.
Additionally, the Australian Financial Complaints Authority has only received four MDA-related complaints.
