Scale, Scrutiny And Stewardship In Managed Accounts

Financial Newswire Contributor

30 March 2026

As managed accounts continue to expand at pace, regulatory scrutiny is keeping step. But this attention is not a sudden response to any single incident; oversight has been building for years, reflecting the sector’s growing scale.

With managed accounts now firmly embedded in advice practices, regulators are increasingly focused on governance frameworks, commercial arrangements and how client interests are safeguarded in practice.

In this light, heightened scrutiny is a marker of maturity – the natural evolution of a growing market, where advice businesses are expected to manage conflicts effectively, demonstrate value and evidence compliance at scale.

Familiar themes re‑emerge in a new context

The industry landscape has changed significantly over the past decade, but much of the regulatory focus centres on issues that will be familiar to advisers: vertical integration, fee transparency and conflicts of interest.

Advice businesses are more independent than in the past. However, they are also experiencing an increase in consolidation and the internalisation of investment capability. For instance, some advice firms are establishing or expanding their own managed account offerings as part of a broader value proposition to clients. While this can deliver efficiencies and improved client outcomes, they also have the potential to introduce new layers of compliance complexity that must be carefully managed.

While conflicts of interest are a natural area of focus, conflicts are not inherently problematic; well‑designed vertically integrated models can support better service delivery, clearer accountability and more competitive pricing. However, challenges arise when conflicts are not appropriately governed or managed in practice.

The quality of advice, the strength of governance frameworks and the consistency of implementation tends to drive outcomes. As managed accounts continue to expand, this pattern is set to continue across the sector.

Platforms to take on a more active role

A notable shift within the ecosystem is the evolving role of platforms, which are increasingly being positioned as gatekeepers – with responsibilities extending beyond investment administration to include stronger oversight of governance and adviser behaviour.

As a result, advisers may experience increased engagement from platforms, including more detailed information requests, enhanced monitoring and closer interaction with clients. This is occurring even among practices with strong compliance histories – reflecting a broader uplift in expectations.

For advisers, this also represents a change in the operating environment rather than a judgement on individual practices. Heightened oversight is becoming part of the standard landscape and will persist as managed accounts continue to scale.

Understanding the compliance divide between structures

Within the managed accounts universe, different structures present different compliance considerations. Separately Managed Accounts (SMAs) remain the dominant structure across platforms due, in part, to their relative simplicity, transparency and scalability.

Conversely, Managed Discretionary Accounts (MDAs) – while offering greater flexibility – can present additional challenges. They are less widely used and, in some cases, less consistently understood across licensees and platforms. This can make uniform practice more difficult and increases the importance of disciplined implementation, particularly around documentation, consent and ongoing review.

As regulatory attention intensifies, three practical considerations stand out for advisers.

1.  Advisers should expect greater scrutiny

Even in well-run practices, increased questioning, deeper data requests and closer platform engagement are becoming standard features of operating in a growing and important segment of the market. Businesses that can clearly demonstrate consistent processes, governance structures and record‑keeping will be better positioned to respond efficiently.

2. Conflict management needs to extend beyond disclosure

As advice businesses increasingly internalise investment capability, regulators are focusing on how decisions are made in practice. Effective conflict management relies on appropriate structural separation, clear accountability and incentives aligned to client outcomes – not simply acknowledging that conflicts exist.

3. Scale must be matched with discipline

Managed accounts can offer efficiency, but growth can amplify risk if governance frameworks do not evolve with it. Documentation, internal controls and cultural alignment become more important as advice delivery becomes more industrialised. Technology and digital tools can support this process, but overly standardised, or “cookie-cutter”, approaches risk undermining personalisation if not carefully implemented.

A maturing market

Regulatory scrutiny should not be viewed as a signal that the managed accounts model is flawed, but as evidence of a maturing sector that has moved firmly into the mainstream.

As it continues to grow, advisers who prioritise governance, transparency and client outcomes – alongside efficiency – will be best placed to navigate the next phase of managed accounts growth with confidence.

Disclaimer

Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Avanteos Superannuation Trust ABN 38 876 896 681 and issuer of CFS Edge Super and Pension. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the Investor Directed Portfolio Service (IDPS) operator, administrator and custodian of the Avanteos Wrap Account Service and issuer of CFS Edge Investments. CFSIL is also the administrator and custodian of the Colonial First State Managed Account ARSN 167 425 649 and ARSN 618 390 051. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 is the responsible entity for the Colonial First State Managed Account, available for investment through CFS Edge super, pension and investment products.

This article is based on current requirements and laws as at 31 March 2026. While all care has been taken in preparing the information contained in this document (using reliable and accurate sources), to the extent permitted by law, no one including AIL and/or CFSIL, nor any related parties, their employees or directors, accept responsibility for loss suffered by anyone from reliance on this information. This article may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the Target Market Determinations (TMD) for our financial products at www.cfs.com.au/tmd, which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS), Investor Directed Portfolio Service Guide (IDPS) and and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. The IDPS Guide and FSG can be obtained from your adviser, cfs.com.au/cfsedge or by calling us on 1300 769 619.