Unlocking Real Value Blog

AK In The News: Managed Acct. Platform Mergers Crucial To Wealth Success

I was asked to comment on a poll conducted by FundFire (a Financial Times Service) in which 80% of the respondents felt that sponsor firms (broker/dealers) must consolidate their managed account platforms in order to remain competitive. Merrill Lynch has just undergone such a consolidation, and the person who helped them do this was hired away by another firm to do it for them.

I am in total agreement that there are just too many fee-based program offerings at many firms today – it makes it confusing to understand for the advisor as well as the client, and expensive for the sponsor because of the operational and research duplication. I have advocated for more transparent pricing and easier program-to-program comparisons for a long time; technological advances have now made this a possibility for more firms.

To quote from the article:”For strategic consultant Andrew Klausner, the poll is a reminder of how, “sometimes, too much choice is not a good thing.” Overall, the proliferation of managed account products on separately managed account (SMA) and unified managed account (UMA) platforms makes it more difficult for advisors to make investment decisions, says Klausner, founder and principal of AK Advisory Partners. Unnecessary duplication and too many different platforms add to the confusion while creating inefficiency and higher expenses, he adds.”

Smaller sponsors, many of the independents for example, might be at a resources disadvantage here, and this could lead to further consolidation in the industry over the longer-term.

Any thoughts?

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