Scaling advice identified as managed accounts challenge

Financial advisers are comfortable outsourcing the handling of managed accounts to investment management experts if it means they can spend more time with clients, according to new research released by Zenith Investment Partners.

Zenith, who with other research and ratings houses, provides managed accounts services to advisers has produced a new report which strongly validates its offering but also highlights remaining challenges.

The report, Unlocking Advice Efficiencies in 2025, is based on response from 460 financial advisers and has led the firm to conclude that 81% of respondents “are satisfied or extremely satisfied with their managed account provider, indicating broad approval of service quality”.

Commenting on report, Zenith head of portfolio solutions, Steven Tang said advisers had sent a strong message through their adoption of managed accounts.

“Managed accounts are demonstrating their value to advice businesses, with 92% of advisers reporting time savings in administrative tasks and 81% expressing overall satisfaction,” Tang said.

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

The Zenith report also suggested that scaling advice is seen as another critical challenge of using managed accounts, with a significant preparedness gap revealed across all practice sizes. Boutique practices being the least prepared (37% readiness vs. 72% perceived impact), the report found.

“Still, advisers report significant efficiency gains from adopting managed accounts, with 44% indicating time savings in administrative and research tasks of up to 25%. Notably, custom or private label managed accounts offer the greatest time reductions, particularly for practices seeking higher operational efficiency,” Zenith claimed.

“While larger and high-growth practices lead the way in managed account adoption, boutique and conservative practices face hurdles with implementation and strategic alignment,” Tang said.

The report stated that, more generally, advisers rank investment philosophy, performance and fees as the top factors when selecting a managed account provider. Private label solutions are preferred for alignment with investment philosophy, while off-the shelf options attract cost-conscious advisers due to lower fees.

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

Portfolio performance ranks as another key factor for 47% of advisers in selecting a managed account provider. Off-the-shelf managed accounts lead in this category, with 51% of users prioritising providers with a strong performance track record.

The report also found that fees are a top concern for 55% of off-the-shelf users, compared to 27% for custom managed accounts and 26 per cent for private label solutions, highlighting cost considerations in selection of both provider and managed account type.