Key trends in managed accounts in 2023

BT Panorama’s head of managed accounts, Zac Leman, has looked at key trends from the last year and what lies ahead for the sector in 2023, given a constant growth of managed accounts with funds under management (FUM) reaching a new high of $135.8 billion in June, 2022.

According to BT Panorama, which saw its own funds under administration (FUA) increase by 27% to $12.6 billion in 12 months to November, advisers looking to make the switch to managed accounts were testing the product before they would make a decision to buy more often.

BT’s transition service, which enabled advisers to try managed accounts before they bought, saw a strong pipeline of work into 2023, with the number of advisers using managed accounts on BT Panorama having risen by 17% to 1,567 advisers.

“Currently around a quarter of advisers on the platform are using managed accounts, so we see potential for further growth generating from other advisers on the platform who have yet to transition to managed accounts. In addition, new products are attracting new advisers on the platform,” Leman said.

According to BT, the relationship between advisers and investment managers also evolved as market volatility brought the two parties even closer in many respects.

BT noted this increased engagement and in October enhanced the investment managers’ dashboard on BT Panorama, allowing them to easily monitor their portfolios, with the rationale behind the technology upgrade being that investment managers’ user experience can influence advisers’ perception of the platform.

“An investment manager’s feedback would weigh heavily on an adviser’s decision to use the platform – managers are influential advocates and platform stakeholders in their own right,” Leman said.

At the same time, communications between investment managers and advisers increased to help them disseminate the information to clients.

However, Leman said that some managers who already distributed market updates on a regular basis were cautious about overcommunicating, in case too much news on market movements signals could cause for alarm.

BT Panorama notes that its users were more active on the platform this year, checking on portfolios, accessing market research and making transactions as markets have fluctuated.

BT also predicted further growth in selection on platforms which was expected to remain strong throughout 2023.

“By the end of 2022, there will be nearly 300 managed portfolios on BT Panorama. Product launches from this year included Infinity Asset Management’s separately managed accounts – now opened up to all advisers on the platform – and product suites managed by MLC Asset Management, Russell Investment Management and Evidentia Group,” Leman said.

Following this, interest in environmental, social and governance (ESG)-focused investment options was expected to gain traction in 2023.

In November 2021, only five managed accounts had a sustainability focus on BT Panorama but in the 12 months thereafter, seven more had joined the platform, representing a FUA increase of over 238% for ESG-focused managed portfolios.

“The rise of managed accounts looks set to continue in the year ahead. We look forward to bringing new capability to the platform, to assist advisers in managing their client portfolios and improving operational efficiency,” Leman added.