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Unified advisory platforms make for a streamlined and simplified advisor experience
June 2019, BOSTON - The managed accounts industry is experiencing a slow but inexorable migration away from platforms with disparate, siloed programs toward unified advisory platforms (UAPs). According to a new report from Cerulli Associates, a global research and consulting firm, titled U.S. Managed Accounts 2019: The Challenge of New Platforms, consolidating platforms and streamlining the advisor experience rank as the highest priorities among sponsors.
A majority of managed account sponsors are moving toward consolidating all of their managed account programs onto a UAP, with 14% of executives surveyed indicating they have completed consolidation, 57% indicating they plan on consolidating, and 5% indicating they are relying on their turnkey asset management provider (TAMP) to do so. One-quarter of firms (24%) will continue to allow programs to exist on different platforms—a model that may soon be challenged by competitors that have fully embraced consolidation.
“One of the main goals of platform consolidation for executives at sponsor firms is to make an advisor more productive by reducing the friction associated with logins to different platforms, multiple investment agreements requiring separate signatures, inconsistent pricing, and disparate middle-office and back-office procedures,” says Tom O’Shea, director of the managed accounts practice at Cerulli. Constructing and monitoring client accounts through one portal gives an advisor a holistic view of all a client’s accounts, thereby facilitating a comprehensive financial planning process.
Planning and implementing platform consolidation is a long-term process. Two-thirds (67%) of managed account sponsors developing a UAP indicate that the process will take longer than two years to complete. “Creating a new platform requires a firm to reset pricing, change investment contracts and disclosure documents, update policies and procedures, and redesign middle-office and back-office operations,” explains O’Shea.
This type of transformational project requires managed account executives to remain focused on the strategic, long-term value their platforms offer. “The purpose of consolidation is to simplify and enhance the experience of an advisor, which involves not only improving technology, but also streamlining all the interactions between the advisor, the client, and the firm,” states O’Shea.
Cerulli’s latest report, U.S. Managed Accounts 2019: The Challenge of New Platforms, provides a comprehensive overview of the U.S. managed account marketplace, including business practices, industry economics, fee and regulatory trends, and developments in product design and delivery. In addition, it details market sizing and growth projections, as well as the growth of various product types in the managed account space.
NOTES TO EDITORS:
These findings and more are from The Cerulli Report―U.S. Managed Accounts 2019: The Challenge of New Platforms.
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