The rise of managed accounts in Australia

What are the implications for asset managers and financial marketing?

The Australian wealth management landscape is undergoing a seismic shift with the rapid rise of managed accounts. In just the past few years, managed account solutions have gone from niche offerings to a mainstream cornerstone of financial advice. Assets in managed accounts have surged to record levels, exceeding $232 billion in funds under management by the end of 2024, up sharply from around $189 billion a year prior. Nearly three in five financial advisers now use managed accounts for client portfolios, reflecting a dramatic uptick in adoption. This trend is reshaping how asset managers should approach distribution and marketing.

In this report, we explore the implications of Australia’s managed accounts boom for asset managers and their marketing strategies. We will examine what managed accounts are and why they are growing so rapidly, how adviser behaviour is evolving in the model portfolio era, and the challenges this creates for fund managers. We’ll discuss whether all asset managers need to develop a managed account capability and how marketing professionals must adapt their approach. Finally, we’ll consider media strategy in a model-driven world and the role a specialist media partner can play. The rise of centrally managed model portfolios requires clear, strategic and professional marketing responses and those asset managers who adjust to this new reality stand to gain a significant advantage in the “model portfolio era.”

What are managed accounts and why are they growing?

Managed accounts are professionally managed investment portfolios that are implemented across multiple client accounts, allowing financial advisers to deliver personalised investment solutions at scale. In a managed account, an adviser or third-party investment manager has discretion to adjust the portfolio (within agreed parameters) on behalf of clients without needing individual trade approvals.

Australian advisers typically use structures like Separately Managed Accounts (SMAs) where clients each own the underlying assets in a model portfolio or Managed Discretionary Accounts (MDAs) where a portfolio is implemented under a mandate for the client. These structures let advisers outsource or streamline the portfolio management process while still tailoring strategies to client needs.

Managed accounts can cover multi-asset models, single-asset class strategies or bespoke portfolios, all administered via investment platforms or wraps. This approach contrasts with the traditional model of advisers hand-picking managed funds or securities for each client and executing changes one account at a time. By using managed accounts, an adviser can update thousands of client portfolios in one go according to a central model, dramatically improving efficiency and consistency.

Several powerful forces are driving the rapid growth of managed accounts in Australia:

• Adviser efficiency and scale: Advisers adopting managed accounts report significant time savings in portfolio administration. By one estimate, advisers using managed accounts save on average 15-22 hours per week on portfolio management tasks. This is time that can be redirected to engaging with clients, growing the business or providing higher-value advice. In fact, in a recent Investment Trends survey, 59% of advisers said managed accounts “freeup their time”, allowing them to focus more on clients. The back-office efficiency rebalancing many accounts at once, rather than manual one-by-one trades, is a game changer for practice productivity. Advisers are also able to service more clients with the same resources, which is critical as the number of advisers has shrunk industry wide.
• Better client outcomes and personalisation: Managed accounts enable more personalised and consistent portfolios for clients. Advisers can match clients to model portfolios that fit their risk profile and objectives, and the portfolios are professionally managed to stay on track. This means clients get timely adjustments applied uniformly, potentially improving performance and risk management. According to Adviser Ratings, the main arguments for managed accounts are centred on delivering more tailored solutions and better efficiency for clients. Clients also benefit from transparency. In an SMA, for example, they can see the actual holdings in their account and potential tax advantages of direct ownership of securities in some cases. Overall, higher client satisfaction and outcomes are key drivers for advisers making the switch.
• Platform availability and technology: Investment platforms have heavily invested in managed account capabilities, making these solutions widely accessible. Leading platform providers like Netwealth, HUB24 and Praemium now offer extensive managed account menus and functionality. For instance, Netwealth’s platform surpassed $100 billion in total funds under administration in 2024, with $20.7 billion of that in managed account portfolios for its clients. HUB24’s managed portfolio FUM reached $42 billion by the end of 2024, growing at an astonishing 43% per annum over five years. Platforms have made it easy for advisers to adopt managed accounts by providing ready-to-use models and seamless implementation. The availability of managed accounts on all major platforms is cited as a top reason advisers have increased their use. In fact, platform availability has now overtaken fees as a deciding factor for advisers when selecting managed account offerings. Modern platform technology also provides user-friendly interfaces, reporting and integration, reducing barriers for practices to transition to a model-based approach.
• Adviser demand for full portfolio solutions: Managed accounts allow advisers to deliver a full asset allocation in one solution, often with professional management or consultant input. In surveys, advisers consistently point to the ability to achieve comprehensive asset allocation through managed accounts as a key motivator for using them. Recent research found that the top prompts for advisers to start recommending managed accounts were the ability to implement complete asset allocation, followed by the wider availability of managed accounts on platforms and the ease of setting up and managing these solutions. The convenience of a one-stop portfolio solution, especially multi-asset models that cover everything from equities to fixed income, is highly attractive. This is evidenced by 68% of advisers having recommended multi-asset model portfolios to their clients in the past year. Managed accounts serve this demand by packaging a diversified portfolio that can be easily deployed across a broad client base.
• Regulatory and industry shifts: The Australian financial advice industry has undergone significant change in recent years including the removal of conflicted remuneration (commissions), higher educational standards and many advisers exiting the industry. The result is a smaller adviser population serving a growing pool of clients, putting pressure on efficiency. With adviser numbers down to roughly 15,500 nationally as of 2024 (from over 25,000 just a few years ago), those remaining must find ways to scale their service. Managed accounts have emerged as a solution to deliver quality advice to more clients with less manual workload. Additionally, many large advisory firms and dealer groups have centralised investment decisions (partly in response to regulatory focus on governance and best interest duty), which naturally leads to model portfolios and managed account structures. Even the volatility of recent years (pandemic disruption, inflation, etc.) has highlighted the benefits of having professional, centrally managed portfolios that can respond swiftly, rather than leaving each individual adviser to figure it out.

The growth numbers underscore just how quickly managed accounts have become integral in Australia. The Institute of Managed Account Professionals (IMAP) reports that total managed account FUM jumped 23% in 2024 alone, reaching $232.8 billion by December 2024. Over the past five years, managed account assets have surged 146%, far outpacing growth in many other areas of wealth management. Furthermore, managed accounts now make up a large share of new investment flows – an estimated 48% of new client investment inflows are going into managed accounts, as advisers direct nearly half of fresh investments to these structures. This data makes it clear that managed accounts are not a passing fad but a fundamental shift in how advisers manage client money. Asset managers and marketers need to understand the why behind this trend – efficiency, better client service, platform support and industry change – in order to respond effectively.

Adviser behaviour is evolving

The rise of managed accounts has gone hand-in-hand with a significant evolution in financial adviser behaviour. As managed accounts gain popularity, advisers are fundamentally changing how they construct portfolios and run their practices. Understanding these behavioural shifts is crucial for asset managers seeking to engage the adviser market today.

First and foremost, advisers are adopting model portfolios at an unprecedented rate. Industry surveys show that a decade ago, only around 18% of advisers were using managed accounts; today that figure has tripled. By early 2025, approximately 59% of Australian financial advisers are using managed accounts for client investments, up from just over 50% a couple of years prior. Moreover, an additional 15-20% of advisers indicate they are interested in adopting managed accounts in the near future. This suggests usage could climb to three-quarters of all advisers in the coming years. In practice, this means the majority of advisers now rely on centralised model portfolios (whether built in-house, via platforms or through external providers) as the core of their investment advice offering. The average adviser today is far more likely to prefer model portfolios as a primary solution for clients rather than constructing individual portfolios from scratch. This is a profound behavioural change from the past, when model-based advice was relatively niche.

A key driver of this shift is the efficiency gains and time savings advisers experience with managed accounts. By utilising a model portfolio across many clients, advisers dramatically reduce the administrative burden of implementing portfolio changes. Research by Investment Trends found that advisers using managed accounts were saving roughly 15.7 hours per week (about 2 workdays) by 2020, and those savings have only grown – more recent estimates put it at 20+ hours per week saved for advisers who fully embrace managed accounts. Freeing up this much time allows advisers to focus on what clients value most: personal financial planning, advice on complex issues and building the client relationship. Adviser firms adopting managed accounts often report that their advisers can serve more clients or provide more holistic service to existing clients thanks to these efficiency improvements. Little wonder then that 92% of advisers who use managed accounts report overall satisfaction and time savings; once they integrate models into their practice, it quickly becomes an indispensable tool.

Another aspect of evolving adviser behaviour is a greater reliance on external expertise for portfolio construction. As advisers pivot to being relationship managers and financial strategists, many are delegating the investment selection role to specialist teams or providers. This can take the form of subscribing to model portfolios designed by asset consultants, research houses, or investment managers. During Fundamental Media’s 2025 adviser marketing roundtable, one of the most discussed shifts in adviser needs was the growing influence of asset consultants in adviser decision-making, as more advisers delegate portfolio construction to these experts. In practice, a licensed advice firm might adopt model portfolios provided by an external consultant or a platform’s investment committee, and all the firm’s advisers use those models for their clients. This centralised decision-making means individual advisers are less often picking specific funds or products themselves; instead they implement the centrally chosen model via a managed account. We also see many large dealer groups and private wealth firms setting up internal Chief Investment Officer (CIO) roles or research teams to build model portfolios for their network of advisers. The behaviour shift is clear: advisers are moving away from being solo portfolio managers to being implementers of a professional, centralised portfolio strategy.

Advisers’ investment preferences have also adjusted in the managed account era. With models handling core portfolio needs, advisers are showing interest in solutions that offer greater customisation and breadth to meet diverse client situations. For example, many advisers appreciate that managed accounts can be used even for smaller balance clients (who historically might have been shunted to cookie-cutter funds). Nearly 40% of managed account users say it’s now appropriate to put the majority of assets for sub-$100k clients into managed accounts, up from 33% a year prior. This indicates advisers find managed accounts scalable across client segments. Additionally, advisers cite factors like performance, fees and platform integration as key when choosing managed account

providers. Performance remains paramount; half of advisers rank performance track record as the top criterion for a model portfolio solution. But notably, having the strategy available on their primary platform is now the second-highest factor, even above fee levels. This again reflects how critical easy platform access and integration have become to adviser behaviour.

It’s important to acknowledge that not all adviser feedback on managed accounts is glowing, because the shift has also raised questions within the industry. Some commentators argue that advisers risk becoming “mini fund managers” and that new conflicts could emerge, for instance if advisers charge extra fees for managing model portfolios in addition to advice fees. There’s also debate about maintaining personalised advice when many clients end up in the same model. However, these concerns have not significantly slowed adoption. Most advisers appear to be navigating potential conflicts through transparent fee structures and focusing on the benefits to clients. Indeed, the widespread adoption by advisers, licensees and their clients is seen as creating huge efficiencies in advice practices while delivering professional portfolio management and diversification benefits to clients, as IMAP’s chair Toby Potter has noted. In summary, the adviser community in Australia is embracing managed accounts to modernise their businesses. They are spending less time on trading and compliance, and more on client-centric activities. They are trusting model portfolios and external experts to handle investments, and they’re choosing platforms and providers that align with this new operating model. For asset managers and marketers, recognising how advisers’ needs and decision processes have evolved is critical, because the old playbooks of adviser engagement may no longer apply in the same way.

Challenges facing asset managers

For asset management firms, the rise of managed accounts presents both opportunities and significant challenges. On one hand, managed accounts have unlocked new avenues for distribution, with many asset managers winning mandates to run model portfolios or seeing their funds included in popular models. On the other hand, this shift fundamentally changes the traditional distribution model and threatens to disintermediate asset managers from financial advisers. Below we outline the key challenges asset managers are grappling with in a model-driven advice world:

• Centralised decision-makers reduce direct access: In the past, asset managers could market their funds to thousands of individual advisers, each making independent investment decisions for clients. Now, decisions are increasingly centralised – a single model portfolio chosen by a large licensee or consultant might dictate the investments for hundreds of advisers and their clients. This means asset managers must win over a much smaller group of gatekeepers (model portfolio managers, research consultants, platform investment committees) rather than each adviser. If your fund is not selected in those models, it may never reach the end clients at all. The influence map has changed: for example, if a major dealer group’s CIO chooses a short list of funds for their model portfolio, advisers in that network will likely stick to those options and not consider other funds outside the model. Asset managers therefore face the challenge of engaging and influencing these central decision-makers – a task that often requires a different approach (more institutional-style due diligence, model performance analytics, etc.) compared to adviser-by-adviser sales.
• Heightened competition for model inclusion: Gaining a slot in a popular managed account model has become fiercely competitive. Model portfolios often aim to be lean and cost-efficient, using a limited set of fund building blocks. An adviser who might previously have used 15/20 different funds across their client base may now rely on, say, a model that uses just eight carefully selected funds or ETFs. Asset managers are effectively competing for fewer spots on these model menus. Additionally, the emphasis on cost and performance means passive index funds and ETFs are capturing many of the core allocations, squeezing out higher-fee active managers unless they offer clear differentiation. An asset consultant building a model may favour established brands with strong track records or low-cost index exposures for efficiency. Smaller or newer managers might struggle to get a look-in. The bar for inclusion is high: managers need solid performance, reasonable fees and often high ratings from research houses to even be considered. This concentrated competition is a challenge, especially for boutique managers who previously relied on adviser relationships and niche positioning to win business. Now they must fit into a model’s constraints or risk being excluded from large swathes of the market.
• Erosion of adviser-level relationships: Asset management sales and marketing teams have traditionally invested heavily in adviser education, events and relationship-building to encourage advisers to use their products. With managed accounts, many advisers are less involved in choosing specific funds, so those traditional relationship channels may yield less impact. This can erode the effectiveness of adviser-level marketing efforts. Asset managers might find that even long-standing adviser supporters can no longer allocate to their fund if it’s not model endorsed. The adviser mindset has shifted: rather than picking among dozens of funds, advisers are looking to a model for answers. As a result, asset managers face the challenge of maintaining brand visibility and preference among advisers even when advisers aren’t the ultimate decision-makers. It becomes important that advisers at least are familiar with and confident in the asset manager’s brand, so that they’re comfortable when that manager’s strategy appears in a model. But getting mindshare is harder when the product decision is one step removed.
• Distribution via platforms and new channels: In a managed account world, asset managers must ensure their strategies are available on the right platforms and in the right formats. Advisers have indicated that availability on their primary investment platform is a top criterion when considering managed account solutions. If an asset manager isn’t on platforms like HUB24, Netwealth, Praemium, BT Panorama, etc., their chances of being included in models or being used by advisers diminish greatly. This creates operational and distribution challenges – managers may need to create new vehicle structures (e.g. an SMA version of their strategy) to be on platforms or negotiate platform distribution agreements which can be complex. Additionally, we see platforms launching their own multi-manager portfolios (often using external fund managers as components). Asset managers might need to partner with platforms to be a piece of these “house” managed accounts. The recent expansion of Insignia Financial’s platform illustrates this: their Expand platform added SMAs from five new investment managers (including BlackRock, Lonsec and Zenith) to meet adviser demand. For asset managers, being part of such platform programs is crucial but requires resources and navigating platform due diligence. In short, the path to reach end investors now often runs through platform gatekeepers, adding a layer to the distribution strategy that asset managers must manage diligently.
• Margin pressure and product adaptation: The shift toward centrally managed portfolios also pressures asset managers to adapt their product offerings and pricing. Many managed account portfolios favour cheaper implementations – e.g. using ETFs or factor funds in place of traditional actively managed funds – to keep total costs low for clients. Active managers may feel pressure to lower fees or offer portfolio slices in SMA format to remain competitive. Some asset managers have responded by creating bespoke model portfolio products (using their funds or a mix of funds) to offer turnkey solutions to advisers. While this can open new distribution, it also means stepping into a solutions role that might be outside their core competency. Additionally, asset managers may need to provide more frequent transparency (e.g. holdings updates) and bespoke support for model portfolios, which can increase internal costs. All of this occurs in an environment where the overall adviser market has contracted, meaning asset managers are fighting for share of a smaller adviser pool and their clients’ assets. Indeed, each adviser now oversees more client money on average – the typical adviser manages approximately $89 million in client FUA – and much of that is tied up in model portfolios. If 71% of an adviser’s client assets are in managed accounts on average, that leaves a limited portion for any fund that’s outside the model. Asset managers must either get into the model or risk losing access to that chunk of assets, all while keeping their value propositions clear and costs sustainable.

In summary, the managed account boom is forcing asset managers to rethink long-standing distribution and marketing approaches. The power dynamic is shifting toward model portfolio gatekeepers and platforms, away from fragmented adviser-by-adviser decisions. Competition to be included in models is intense and the criteria can be stringent (performance, cost, platform presence, etc.). Traditional means of influencing advisers have less pull if advisers themselves can’t easily act on those ideas outside a model. Asset managers that acknowledge these challenges and respond strategically – by adjusting product formats, targeting new decision-makers and reinforcing their strengths in this ecosystem – will be better positioned to thrive. Those that do not may find themselves with excellent products but no effective way to get them in front of clients in the model portfolio era.

Read more on the impact of the rise of managed accounts in Australia in our follow-up article, covering whether all asset managers need a managed account capability, how marketers should adapt to this change, and what good media strategies look like in a model-driven world.