Platform consolidation—a long-running strategic priority for managed account sponsors—has taken a back seat to helping advisors build better portfolios, according to this year’s research. While platform consolidation remains important, sponsors place greater importance on several other objectives outlined below.

Increasing the Use of Home-Office Discretionary Managed Account Product

Managed account distributors are encouraging advisors to adopt home-office portfolios to produce more consistent outcomes for investors and increase advisor efficiency, with 45% rating it a top priority. Forward-looking firms understand that financial planning is the most important service they can provide investors and that other aspects of investing, particularly portfolio construction, should be outsourced.

Providing Better Portfolio Construction Support for Advisors

While they continue to encourage outsourcing, sponsors have made peace with the fact that some advisors will never want to surrender portfolio construction. For these hard-core, discretionary advisors, firms are providing tools, analysis, and supporting personnel to help them become better portfolio managers. Over one-third (39%) of firms rate this a top priority.

Responding to Regulatory Scrutiny

Responding to regulations is also a concern, with 39% rating it one of their firm’s top initiatives. The changing of administrations has many firms concerned that new fiduciary standards will be introduced that will require significant changes to their technology, policies, and procedures.

In addition to covering key priorities for managed account sponsors, The Cerulli Report—U.S. Managed Accounts 2021: The Evolution of Personalized Investing, provides in-depth market sizing, assesses challenges and opportunities for asset managers, and provides a comprehensive overview of the industry movement toward direct indexing. Connect with our team for more details.