Managed account programs, a US phenomenon now seen as the ideal investment vehicles for mass affluent markets around the world, are set to grow outside the United States at a compound annual rate of 25 per cent to garner assets worth over US$200 billion by 2006. Or so says a forthcoming report from Cerulli Associates.
Cerulli says the report is the first-ever study of the managed account business outside the United States. On this subject, the firm certainly speaks with authority. It has tracked the growth of the managed account market in the United States for several years, and currently follows US$750 billion in around 200 managed account programmes there. The new report, extends that research expertise to the international marketplace.
Cerulli reckons its growth estimates may even be conservative. It says that in the four years ending December 2001, managed accounts in the United States grew at a compound annual growth rate of 31 per cent. At the end of 2001, estimates Cerulli, non-US managed account assets stood at just US$70 billion, implying considerable scope for rapid growth.
The report looks at managed account programmes from Canada to Australia and includes research in the United Kingdom, Continental Europe and Asia, including Japan. But it identifies Canada, Australia and the United Kingdom as the prime growth markets for this segment of the industry. The report adds that Continental Europe and Asia are also good long term bets. Further details can be found in the report, International Managed Accounts, which is scheduled for release next month. Copies should be available in late May.
But what exactly is a managed account? According to Cerulli, “managed account” is an umbrella term covering any product which brings together in a single package three key components: client profiling, asset allocation and unbundled asset-based advisory fees.
Internationally, CA has analyzed two types of managed account programs- mutual fund advisory and separate account consultant program. Cerulli adds that, unlike in the United States – where full-service brokerages account for 70 per cent of managed account assets – international vendors of these programs are bound to be more varied.