Managed accounts boom reshapes financial winners and losers

Managed portfolios now account for 30 per cent of total advised funds under management, up from just 16 per cent in 2021. This change is uneven—some areas are expanding rapidly while others lag as evolving client needs force a restructuring of advisory services. The shift reflects broader industry trends where institutional investment capabilities and governance frameworks have become non-negotiable differentiators. North’s analysis highlights that only five firms collectively manage over $20 billion in managed accounts, demonstrating how consolidation favors those with existing scale.

Which firms dominate the managed accounts surge?

Four key groups now control over $20 billion in managed accounts collectively, illustrating how consolidation benefits those with the resources to expand. The leading advantages include:

• Businesses at scale—firms operating at scale have been the primary beneficiaries of this trend, as their ability to integrate managed accounts into broader advisory services reduces implementation friction.
• Institutional-grade portfolio tools—advisers use professional managers to construct portfolios while maintaining direct client relationships. This model allows advisers to leverage the expertise of large investment managers without relinquishing control over client interactions, a critical factor in client retention.
• Managed portfolios built on strong governance—clear compliance and transparency remain essential competitive factors.
• Technology integration—automated platforms and seamless connections between firms and clients reduce operational barriers. Tech providers enabling these integrations have emerged as key winners, as their solutions address adviser capacity constraints by automating routine portfolio tasks.

North’s own managed portfolios reached $28.3 billion by the close of its fiscal year in 2026, a 31% increase from the previous period. The firm added 63 new portfolios and four additional managers in the last half-year, showing the accelerating growth. AI and retirement income thematics were proving popular among advisers according to NMG.

For advisers, the primary draw is operational efficiency. Alex Berlee, director at AGS Financial Group, explains that retirement-focused managed accounts now deliver stable, income-driven portfolios aligned with client objectives. “In terms of retirement income, we’ve implemented specific retirement SMAs to provide more stable, income-focused portfolios.” The firm’s focus on retirement income solutions aligns with broader industry trends where advisers increasingly position managed accounts as a core offering for clients approaching retirement, given the growing complexity of income planning.

This transformation extends beyond tools—it redefines how advisers operate. Firms treating managed portfolios as a core offering, rather than an optional service, report stronger client capacity. The pattern mirrors earlier adoption in the US and UK, where managed portfolios became mainstream years ahead. Australia’s market is now following, though early adopters hold a clear edge, as the country tends to adopt financial trends established in these markets after a lag period. North’s report notes that advisers integrating managed accounts into their operating model—rather than treating them as an add-on, have seen measurable improvements in their ability to onboard new clients without proportional increases in operational overhead.

Smaller advisory firms face mounting pressure. Those lacking institutional support or governance systems risk falling behind as clients increasingly seek both personalized service and professional-grade management. The gap between those who can meet demand and those who cannot is growing.

Which firms are losing ground, and why?

The underperformers in this transition fit a predictable profile. Firms that entered the managed accounts space without specialized expertise, often labeled “me-too” providers, struggle to compete. Their offerings frequently lack the governance or customization clients now demand. North’s analysis identifies these providers as latecomers who rushed into the space without establishing the necessary infrastructure or investment expertise, leaving them vulnerable to client attrition as competitors deliver more sophisticated solutions.

Small practices building portfolios in-house encounter additional hurdles, particularly when scaling without dedicated infrastructure. Traditional providers, meanwhile, face a dilemma: clinging to outdated models while forced to innovate. Those resisting adaptation risk losing market share to more flexible competitors. North’s report highlights that under-resourced practices attempting to build portfolios internally often struggle with scalability, as manual processes become unsustainable as client demands grow.

Fund managers outside the managed portfolio network also face exclusion risks. By remaining on the periphery, they surrender influence to firms that embed managed accounts into their advisory processes. Industry reports caution that missing this shift could mean forfeiting a rising portion of the market, as advisers increasingly prefer solutions that integrate seamlessly with their existing workflows rather than standalone products.

Personalization has become the next critical factor. Advisers no longer accept generic solutions, they require portfolios that match their brand identity and investment approach. Aequitas Investment Partners chief executive officer Nino Ramunno noted there has been a growing demand for portfolio personalisation and outsourced investment expertise. “Practices want solutions that reflect their brand and investment beliefs while taking advantage of institutional-quality governance and portfolio management,” Ramunno said.

Andrew Yap, head of portfolio solutions at Zenith Investment Partners, notes that managed accounts solve a core challenge: adviser capacity constraints. With fewer advisers available and rising client needs, automation handles trading, rebalancing, and reporting, liberating time for relationship management. “Practices want solutions that reflect their brand and investment beliefs while taking advantage of institutional-quality governance and portfolio management,” Yap said.

Market data confirms no signs of slowing. Managed portfolios have evolved from a product into a foundational model. Firms integrating them into operations will outperform those treating them as secondary. The critical question is no longer whether this trend will persist, but which firms will be left behind when it does.