Managed Accounts: Catching The "IT" Factor

August 6, 2002

Abstract

Boston, MA, USA August 6, 2002

Managed Accounts - Catching the "IT" Factor

Celent Communications predicts that spending on managed account technologies will grow from US$278 million in 2002 to US$576 million by 2006, as both old and new sponsors and money managers build their presences in the managed account marketplace.

Celent’s new 45-page report, "Managed Accounts— Catching the ‘IT’ Factor," discusses the overall market trends in managed accounts, examines how technology innovations are reshaping the market and improving operations, and evaluates current and future trends that will affect this burgeoning marketplace.

Technology Solutions and Providers in the Marketplace

Celent predicts that assets in managed accounts will double from US$500 billion to US$1 trillion in assets between 2002-2006, representing a 17% penetration among mass affluent and high net-worth households.

At the same time, new and disruptive technologies will alter today’s landscape with mutual fund companies destined to play a bigger role in the near future. Managed account operations and profitability should also be boosted by new technologies to tackle the industry’s inherent operational challenges.

According to

Pamela Brewster, senior analyst at Celent and author of the report, "The new technologies will provide a level of automation that will allow managed account operations to scale effectively and provide greater customization capabilities. They will also break five large wirehouses’ domination of the market: Salomon Smith Barney, Merrill Lynch, UBS PaineWebber, Morgan Stanley, Dean Witter, and Prudential."

The report reviews four leading technologies in the managed account space including: portfolio accounting/management systems, portfolio customization tools, third-party managed account platforms, and back-office solutions. Within each category, the leading vendors are highlighted.

A is available online.

Technologies

Leading Providers

Portfolio Management Systems CheckFree APL, Advent, Integrated Decision Systems, DST
Portfolio Customization Tools Life Harbor, Upstream, SmartLeaf Softpak, Placemark, Tamarac
Third-Party Managed Account Platforms Lockwood Financial, Brinker Capital, London Pacific Advisors, EnvestNetPMC, AdvisorPort, Separate Account Solutions, Oberon Technology
Back Office Automation EMAT, Foliofn, DST, Mellon, BTA

of Celent Communications' Retail Securities & Investments research service can download the report electronically by clicking on the icon to the left.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA August 6, 2002

Managed Accounts:  Catching the "IT" Factor

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 5
  Current Market Structure 8
  Look Before Leaping 11
OPERATIONAL CHALLENGES 14
  Lack of Standardization 14
  Customization Challenges 15
  Back and Front-Office Inefficiencies 16
TECHNOLOGY SOLUTIONS 17
  Portfolio Management Systems 17
  Portfolio Customization Tools 21
  Third-Party Managed Account Platforms 28
  Back-Office Automation 32
THE PRICE OF ADMISSION 38
  Other Considerations 39
  Wait-and-See or Dive in? 40
FUTURE TRENDS 42

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