The 3 factors limiting managed account adoption

Zenith’s Unlocking Advice Efficiencies in 2025 report surveyed 460 financial advisers and found advisers are reporting three main challenges to the adoption of managed accounts.

These are the migration of legacy portfolios, cost consideration and client preferences for bespoke solutions. Boutique or conservative practices were most likely to face hurdles with implementation or strategic alignment, it said.

Steven Tang, head of portfolio solutions at Zenith, said: “Managed accounts are demonstrating their value to advice businesses, with 92 per cent of advisers reporting time savings in administrative tasks and 81 per cent expressing overall satisfaction.

“However, challenges exist to their broader adoption. The migration of legacy portfolios, cost considerations, and client preferences for bespoke solutions key barriers to the broader adoption of managed accounts in Australia.”

Those who are using managed accounts already found they were most beneficial for time savings in administrative or research tasks. The greatest time reductions were found at those practices using custom or private-label managed accounts, which were also preferred for alignment with a practices’ investment philosophy.

On the other hand, cheaper off-the-shelf options attracted advisers who were concerned about costs and also scored highly for portfolio performance. Over half of off-the-shelf managed account users said fees were a high priority for them.

“The report found that 50 per cent of advisers cite investment philosophy as a primary reason for provider selection. This is particularly important for private label users (60 per cent) and custom managed account users (53 per cent), reflecting the need for tailored strategies to reflect a practices’ investment philosophy.

“Managed account providers can help prompt further growth for advice practices by offering technology and tools that streamline investment operations, providing scalable investment management including portfolio creation, rebalancing, performance reporting and compliance oversight, and enabling advisers to maintain consistent investment solutions for clients, even when transitioning between licensees.”

Previously, ifa covered how the SPDR ETFs/Investment Trends Managed Accounts Report found that financial advisers utilising managed accounts within their client portfolios are saving an average of 23.9 hours per week.

Advisers using managed accounts allocated, on average, 71 per cent of clients’ total assets into these accounts; managed accounts advisers are directing a record 48 per cent of new client inflows to managed accounts – up from 41 per cent in 2024.