Key Findings
This report has a long list of interesting facts to share:

The Evolution of the Separately Managed Accounts & Other Packaged Fee-Account Programs Business

This section provides key highlights including a history lesson about fee-accounts, their underlying driving factors, statistics on past growth, and where they are today.

Market History, Key Driving Factors, Market Definition, Market Growth, Market Segmentation, & Key Issues

• Fee-accounts, largely ignored until the Tully Committee of 1995, began to gain huge momentum in the late 1990s with individual investors
  
• Ultimately, the two core benefits of fee-accounts versus commission accounts are the alignment of advisor & client interests, and the promotion of client-oriented services
  
• Since 1996 packaged fee-accounts asset growth has also been explosive, breaking through the $1.5 trillion at the end of 2006
  
• The movement in the wirehouses is to unified managed accounts and broker wrap accounts
  
• Looking at the whole of the packaged fee-accounts landscape, separately managed accounts & multiple style portfolios are the dominant product by far, capturing over half the assets
  
• Across the eight types of packaged fee-accounts, there is over $1 trillion total, with separately managed accounts leading the way
  
• Net flows into separately managed accounts are $50 billion and up, up 10% from a year ago
  
• While the standard view of a separately managed program involve non-proprietary managers, one also needs to take into account the proprietary separately manage account programs which account for almost one-quarter of all assets
  
• Nearly half of separately managed account assets are held in IRA accounts.
• Wirehouses dominate separately managed account assets under management, accounting for three-quarters.
• Multiple style portfolios, the second type of packaged fee-accounts, have emerged out of the concerns about separately managed account, helping alleviate them with the use of an overlay manager
  
• The multiple style portfolio assets are now nearly $100 billion, growing at twice the pace of traditional separately managed accounts
  
• The average account size of multiple style portfolios has risen to nearly $500,000, up 25% since 2004
  
• Mutual fund wrap assets have grown to over $300 billion
  
• Annuity wrap accounts are a relatively new fee-accounts innovation, and insofar have been limited both in number of programs and assets under management
  
• ETF wrap account programs have emerged largely out of those questions about the true cost of mutual fund wrap accounts
  
• ETF wrap account programs assets are likely over $5 billion
  
• True unified managed accounts wrap together into one account multiple products, including separately managed accounts, multiple style portfolios, mutual funds, individual securities, ETFs, and alternative investments
  
• Unified managed accounts have increased over 75% since 2006 to $39 billion
  
• Almost one-half of affluent consumers have never heard of unified managed accounts
  
• Broker wrap accounts have held relatively steady in assts, until recently jumping up to $90 billion
  
• Fee-based brokerage accounts have historically been one of the fastest growing products in the financial services industry and have reached nearly $300 billion
  
• Training and education is a critical need in the transition to fee-accounts; both business transition and client transition issues are critical
  
• Only 38% of full-service brokers who recently converted to a fee-based business model reported some degree of suffering in terms of revenues
  
• All of the wirehouses have strongly incentivized their advisors to move towards fees; at Merrill Lynch & Morgan Stanley, they provide a 3% boost to $500,000 producers that would mean $15,000 in income to them to move to fees
  
• 70% of survey respondents rank operations as the top issue for separately managed accounts; 24% list reporting, 20% list personnel, 18% list fee pressure, and 12% list performance
  
• The Chartered Financial Analyst (CFA) Institute recently ended the four-year debate with the Money Management Institute and decided to give money managers the option of excluding separate account businesses from its new reporting standards