Market Trends in Separately Managed Accounts 2006: Unified Managed Households

Report Summary

Market Trends in Separately Managed Accounts 2006: Unified Managed Households

With the definition of the unified managed household (UMH) concept, the SMA industry has set very ambitious goals for itself. While the concept is striking, in that it would bring family office-quality investment management to the high-net-worth-client se

Alois Pirker
Research Director

Boston, MA, November 9, 2006 – In a new report, Aite Group reviews the unified managed household concept, the latest innovation discussed in the separately managed account industry. The unified managed household is often referred to as the highest form of separately managed account integration. While the multi-style portfolio and unified managed account concepts define the way client assets are managed within one account, unified managed households focus on the totality of a client's assets, which in most cases go across multiple accounts, have multiple registrations, and are managed through multiple financial services firms.

However, major hurdles need to be surpassed before unified managed households become a reality. Some of these hurdles lie beyond the control of single firms. The implementation of the full UMH concept will only become possible once the wealth management industry, as a whole, agrees on and implements protocols and mechanisms for exchanging client account data and for coordinating investment management decisions amongst wealth management firms.

According to Alois Pirker, a Senior Analyst at Aite Group and author of the report, "While a full implementation of the concept might not be possible at this point, firms can profit a great deal from the unified managed household approach. Brokerage firms, in particular, the dominant forces in the separately managed account market, can employ many of the unified managed household ideas to support their shift from a product-based business model to an advice-based wealth management approach."

This Impact Note introduces the key features of the unified managed household. Due to the importance of the wealth management concept for this topic, this Impact Note also includes a review of the requirements and dynamics of today's wealth management business. Furthermore, the main issues related to the implementation of UMH platforms are analyzed. This Impact Note concludes with a classification of the leading technology vendors that are active in this area.

This 22-page Impact Note contains 7 Figures and 1 Table. Clients of Aite Group's Wealth Management and Retail Banking Services can download the report.

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