The separately managed account industry witnessed strong growth again in 2004, as assets under management grew by 15.9% to $576.1 billion, the Money Management Institute reported Tuesday.
The trade group now predicts that number will reach $1.3 trillion by 2008. A key driver in that growth, officials said, will be IRA rollovers. In 2003, 25% of the industry's $30 billion of net flow derived from IRAs. That will increase to 40% by 2008, the institute said.
"We've seen financial services shift from focusing on individual products, to packaging services and now planning," remarked Stephen Gresham, executive vice president, Phoenix Investment Partners.
The MMI also reports that major Wall Street firms continue to dominate the managed account distribution channel, currently accounting for 80% of the market. The MMI forecasts that that number will decline in coming years as banks, regional firms, third parties and insurance companies gain greater share.
In the fourth quarter of 2004, mid-cap investing styles were the biggest gainers, attracting 25.5% of new assets. Large-cap value funds, however, remained the largest investment strategy by commanding 21.9% of assets.