According to the annual report Cerulli Quantitative Update:
Managed
Accounts 2008 mutual fund advisory programs increase market share to 27% and this tendency will continue across all distribution channels.
For the first half of 2008 mutual fund advisory programs experienced one of the sharpest increases in market share at 27% over the past five years, while separate accounts experienced the most significant decline at nearly 12%.
The report explains that growth rates for separate account consultant programs because of the recent market volatility which has lead to more conservative projections by Cerulli analysts compared to previous years. These programs are expected to hold nearly $874 billion in total AUM by year-end 2012.
Mutual fund advisory programs form primary drivers to the over-all success accounts. The main reason for such demand is systematic nature of the service with high levels of built-in portfolio diversification.
The flexibility of managed account programs and demand for fee-based advice have led to growth across client tiers and advisor types, says Jeff Strange, senior analyst and head of managed accounts practice, Cerulli.
We expect to see declining marketshare for separate account consultant programs as UMA programs continue to evolve and compete directly for assets.
At just over 17 years old, mutual fund advisory programs continue to exhibit exceptional growth posting 24.4% (compound annual) growth rate and adding more than 2.6 million accounts over the past 10 and a half years, says Emily Tillman, co-author of this report.
L.D.