The rapid growth in separately managed accounts has given firms little time to organize their offerings in a coherent way. However, that is starting to change, according to Cerulli Associates, a Boston-based research company.
Many firms recognize that better organization can translate into better sales, are now making a priority of instilling order in their SMA product line. Specifically, they are grouping their SMA offerings into common, product-neutral frameworks that Cerulli calls unified managed accounts, or UMAs.
A recent Cerulli report outlines how brokerage firms can benefit from UMAs. Without such platforms, reps must go to one source for a mutual fund advisory program, another for a separate account consultant program, all the while maneuvering within their firms fee structure.
With a converged platform in a UMA, these tasks are gathered together in a single, coherent package.
“The fact that advisors can more smoothly deliver multiple products in a single environment will ultimately lead to better portfolio construction for end clients, which will facilitate client retention,” the Cerulli report says.
Essentially, an UMA is a simplifying factor that pulls together formerly disconnected components of a separately managed account offering.
Several firms, including Lincoln Financial and Smith Barney, have embraced the UMA concept. Smith Barney is expected to launch its Integrated Investment Services platform within the next few months. According to the Cerulli report, it will bring together fiduciary service plans with mutual funds and trust funds to provide an all-encompassing SMA service.