BOSTON - At the Money Management Institute annual convention in Boston this week there was a lot of buzz around Unified Managed Account platforms.

According to MMI, UMAs skyrocketed over 100% in the last year, and at double the rate of any other segment. Yet they are still only 6% of the $2 trillion industry.

“UMAs are still in their infancy,” said Lee Chertavian, Chairman and CEO of Placemark Investments.

With managed accounts, the manager usually has discretion to invest the assets, but not direct access. But not all UMA platforms are the same.

At UBS, Marilee Ferone, Executive Director of UBS Financial Services, said the managers at her firm have no discretion. There have been a lot of grassroot efforts on the part of the financial advisors, she explained, and UBS’ UMA program has grown to $6 billion, with an average account size of about $1.3 million. UBS has almost 200 Separately Managed Accounts, or SMAs, over 3,100 mutual funds and 300 ETFs, she added.

Meanwhile, Russell Tipper, Director, Senior Product Manager at Merrill Lynch GWM Group, Bank of America, explained that his firm allows managers to retain discretion. Merrill Lynch’s UMA platform launched in 2007 and has grown to $22 billion. “The UMAs for us is really a platform for delivering our guidance and leveraging our investment partners,” Tipper said. “It’s taken what took multiple programs previously and offered a platform with a full spectrum that can implement different offerings with flexibility.”

The UMA business has truly evolved. “Five years ago, UMAs didn’t exist,” Roger Paradiso, President, Chief Investment Officer, Morgan Stanley Smith Barney, said. “I think as an industry its great to step back and see there is evolution and progress happening in the industry.”

Paradiso explained that Morgan Stanley Smith Barney’s UMA platform is open and open architecture, with several different investment vehicles on it. But, he added, it’s not a catchall. “Everything needs to be approved and vetted through our research. Our firm has done due diligence on every product that is in there.” MSSB has over 250 managed accounts products and over 150 ETF products.

UMAs have presented some challenges as well. Paradiso said that he would like to see some standardization when it comes to model delivery. Overall, though, UMAs widen the network of quality managers and the distribution platform.

Another challenge is to make sure the intellectual capital of asset managers isn’t shared.

Tipper said that his firm regularly checks to make sure the models in the UMA are aligned with the asset manager’s models in terms of performance. “We want to make sure managers feel we are truly implementing their strategy,” he added.