The growth in managed account funds continues unabated, with funds under management (FUM) now standing at $57.05 billion – an 18.9 per cent increase in the six months to 31 December 2017. And for the 12 months ‘year on year’ period, this represents an annual growth rate of 45 per cent or $17.87 billion.

Commenting on the findings, the Institute of Managed Account Professionals (IMAP) Chair Toby Potter said $1.7 billion of this increase had come from companies that had been added to the six-monthly IMAP/Milliman Managed Accounts FUM Census, but over half of the increase was organic growth.

“This is because advisers are increasingly viewing managed account services as their preferred service model for a certain client segment,” Potter said.

The Managed Account FUM Census is a bi-annual study of the FUM invested through the main forms of managed accounts, including SMA, MDA and IDPS-like services. The survey is conducted by IMAP in conjunction with global actuarial firm, Milliman.

In addressing the results, Milliman (Australia) practice leader, Wade Matterson estimated that 41 per cent ($4 billion) of the FUM increase could be attributed to very buoyant investment markets, with the value of the ASX/S&P 200 Accumulation Index increasing by 8.37 per cent over the six-month period.

“This compares with a 1 per cent or $0.39 billion market growth factor in the previous six months,” Matterson said.

Potter believed that $3.37 billion of the increase in FUM was due to inflows of new funds from existing participants growing their managed account business, compared with $4.4 billion in the previous six-month period.

“This gives us a total figure for the past 12 months of $7.88 billion in new fund inflows for 2017,” Potter said.

A total of 42 companies participated in the December 2017 Managed Accounts FUM Census, ranging from the very large players (major platforms and banks) and MDA providers, to individual licensees that mostly operate their service internally.