Separately Managed Accounts & Other Fee-Account Programs

The purpose of this report is to detail the heretofore rapid emergence of the packaged fee-accounts market, and predict both the future size of this market and its upcoming key developments. This comprehensive report should serve as a bible for any existing or new participant in the separately managed accounts or other fee-accounts business. No individual trend is as profound as the shift away from commission brokerage towards the eight types of fee-account programs: fee-based brokerage accounts, broker wrap accounts, mutual fund wrap accounts, annuity wrap accounts, ETF wrap accounts, multiple style portfolios, separately managed accounts, and unified managed accounts. This comprehensive report includes statistics on the leading players, details of each market segment, highlights of innovations in the four components of fee-accounts, and predictions for the future. This is a must read for firms participating in the fee-accounts market! This is the fifth draft of Tiburon’s research on this topic; at this point, it is fairly well developed.

Tiburon’s first draft of this report was published in 2001; that version focused narrowly on the emergence of independent fee-account programs, now often called turnkey asset management programs (TAMPs). This was only an emerging segment at the time, and that draft sought to organize that emerging business.

The second draft of this report, published in 2002, expanded the focus of the report to also cover the death of business-to-consumer separately managed account models, and the rapid emergence of the new breed of platform-oriented turnkey asset management programs, led by Envestnet and Advisor Port.

The third draft of this report, published in 2005, expanded its focus on the dominant programs of the wirehouses and regional brokerage firms.

The fourth draft of this report, published in 2007, sought to put separately managed accounts and the other seven types of packaged fee-accounts into their proper context within the industry, namely alongside the other more traditional fee-based investment services long provided by fee-only financial advisors (RIAs) and bank trust officers, tried to offer a comparison of traditional separately managed account programs and the emerging newer program type called multiple style portfolios, expanded the industry’s view of what is popularly (and correctly) perceived to be the industry’s eventual panacea – the unified managed account, and highlighted the best opportunities for TAMPs, enablers, and money managers.

This is Tiburon’s fifth draft of this report. This version focuses on addressing numerous recent industry developments (e.g., those around the Merrill Lynch rule), expanding the status of the eight types of packaged fee-accounts such as unified managed accounts, as well as lesser covered versions like annuity wrap programs, and reconciling managers lists to develop a more comprehensive manager appendix. In addition, this draft also revists future predictions and draw new and/or strengthen old predictions.