Managed accounts FUM up 20% over prior 6 months

In its FUM Census, the Institute of Managed Account Professionals (IMAP), in conjunction with Milliman, found that managed accounts FUM reached $194.85 billion, up 20.47 per cent when compared with June 2023’s figure of $161.74 billion.

The data revealed that 2023 was a positive growth year overall with FUM increasing a total of $50.32 billion from December 2022’s figure of $144.53 billion, up a total of 34.8 per cent.

IMAP chair Toby Potter, said: “Strong inflows of over $15 billion were reported for the last half of 2023.

“The widespread adoption of managed accounts by licensees, their advisers, and by their clients is creating efficiencies in advice practices, and benefiting from professional portfolio management and the ability to manage diversified portfolios more effectively.”

The FUM Census collected data from 46 organisations, with participants from the large platforms and MDA service providers through to individual licensees.

The participating organisations host a variety of offerings, “which adds up to a healthy competitive market with a broad range of offerings to meet differing needs from both client investors and advisers”, Potter said.

Victor Huang, Milliman practice leader for Australia, said: “The investment markets have recorded improved growth in the second half of 2023 with a 7.6 per cent increase in the value of the ASX/S&P 200 Accumulation Index, giving an annual growth rate of 12.11 per cent in 2023.”

Huang noted that a number of factors contributed to the increase and will continue to provide a positive growth environment through 2024, though there are some inflation and political factors to be wary of that may have a negative impact.

“The subsiding inflation data, receding recession risk, along with the tech sector growth were key drivers for the strong equity performance and provides a positive platform for growth in 2024,” he said.

“Concerns around service inflation remaining elevated and geopolitical uncertainty around the US election continue to be potential headwinds.”

According to Potter, separately managed accounts (SMAs) were a key part of the growth in managed accounts, increasing $28.21 billion from $80.61 billion in December 2022 to $108.82 billion in December 2023, up 35 per cent.

“The platform providers’ expansive use of SMAs as a vehicle to service the adviser/licensee market help drive FUM growth,” Potter said.

He added that managed discretionary accounts (MDAs) have also grown, with an increase of $11.57 billion from $50.07 billion in December 2022 to $61.64 billion in December in 2023, up 23.1 per cent.

“MDAs are continuing to grow too, helped by the tailoring, efficient implementation, and operation of MDA programs,” Potter said.

The census attributed the remaining funds to “other services”, which saw an increase of $10.54 billion from $13.85 billion in December 2022 to $24.39 billion in December 2023, up 76.1 per cent.