Managed account sponsors frequently cite working toward a unified managed household (UMH) as one of their top-three priorities—44% in 2022, jumping to 52% in 2024. While platform providers have made substantial headway with features and tools that enable a UMH, platform sponsors still face substantial resistance or apathy from advisors and technology integration challenges, according to the latest Cerulli Edge—The Americas Asset and Wealth Management Edition.

Platform sponsors widely embrace the mission of upgrading their platforms to incentivize advisors to adopt a scalable approach to more holistic advice. The key to long-term success will be convincing advisors that they offer an easier, better, faster, and cheaper path to improved client portfolio management outcomes that justifies the effort of adoption.

When considering the specific challenges of evolving toward a UMH platform for the bulk of clients’ advisory assets, sponsors say their most notable concerns are having all the necessary technology enhancements working in combination adeptly (89%) and the burden of unwinding legacy platforms (42%). These challenges are compounded by the ever-evolving definitions and desired functionality of UMH programs.

“Nearly everyone can agree that asset location optimization and tax-loss harvesting are core elements of a UMH, but beyond these, answers begin to differ as to how to treat rebalancing across accounts—some of which may reside in brokerage platforms rather than in the advisory program or at another provider altogether,” says Scott Smith, director. “Things become more complicated when considering how a UMH platform will optimize retirement income and whether Social Security and annuity options should be part of the core capabilities,” he adds.

Beyond what new services an enhancement will offer, a major stumbling block is how any new feature might affect every other system integrated into the overall platform. Rather than trying to integrate a plethora of proprietary systems, some firms have reported success in partnering with specialized technology providers to ease the process.

“When used optimally, managed account platforms can be the hub of advisory relationships, connecting financial planning, goal tracking, tax management, reporting, client relationship, portfolio management, and compliance systems into a comprehensive solution that benefits both advisors and clients,” says Smith. “However, sponsors must develop a cohesive strategy on two fronts: technology integration and rollout and advisor engagement and adoption. Otherwise, the UMH solution may not be able to prove a return on investment,” he concludes.