COVID-19 accelerates managed accounts take-up

Mike Taylor

Managing Editor and Publisher

28 July 2021

The COVID-19 pandemic has provided a boost to the use of managed accounts by financial advisers, according to the latest research from Investment Trends.

The latest Investment Trends data has revealed that 70% of financial advisers already use managed accounts or intend to do so.

The latest Managed Accounts Report from Investment Trends has pointed to the year-on-year growth in the use of managed accounts by financial planners since 2012 with head of research, Irene Guiamatsia saying that COVID-19 had acted as an accelerant.

“Fully two-fifths of advisers now recommend these solutions (44%) and a further 26% are thinking of starting,” she said. “There are several elements contributing to their rising popularity and alleviating the compliance burden is chief among these.”.

“Compliance is the top challenge faced by financial advisers in the day-to-day running of their business, with direct implications for profit margins.  The ability of managed accounts to alleviate these issues has certainly contributed to their rising adoption.”

“For instance, current users were asked to compare managed accounts to a portfolio of direct shares or managed funds and evaluate their satisfaction with each for its ease in demonstrating client best interest obligations. Almost all users rated managed accounts as ‘good’ or ‘very good’ (91%), well ahead of a portfolio of managed funds (80%) or direct equities (65%),” Guiamatsia said.

“Further to their ability to assist with compliance and back-office tasks, users also acknowledged how managed accounts enabled them to navigate the challenges brought about by the pandemic last year,” she said.