MMI Releases Numbers And Call To Action

Published April 10, 2002, 1:00 a.m. EDT

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It was up and down at the annual conference of the Money Management Institute, the Washington-based managed account organization. The conference highlight was the release of current and projected data for separately managed account assets. At the end of 2001, there were $415 million in managed accounts, and 2002 may see assets hit half a billion. Nor is this just the same high-net-worth individual pouring in more cash: The number of accounts in 2001 -- 1.68 million -- is also expected to rise this year to more than 2 million. And in a sign these vehicles are becoming more popular for modest clients, average account size, now at $247,000, is expected to decrease to $244,435.

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An unhappy trend, however, punctuated the welcoming speech of Peter Muratore, chairman of the MMI. Without naming specific companies, he lashed out against "the attempt by those influences outside the separate managed account business to commoditize our business." He said a client's need could only be filled by a consultant "who is not tied to a model that will spit out a homogenized client profile" It was possible this was a reference to Morningstar , which launched a managed portfolio platform last year.

The results were announced by T. Neil Bathon, president of

Financial Research Corp.,

a Boston-based financial research and consulting firm, which developed the study and calculated 10 years of projected progress. In a separate presentation, Jeffrey Cusack, senior vice president of managed accounts at San Francisco company

Charles Schwab

, pointed out that increasingly these assets would flow through independent advisers. "This is a growing segment for RIAs," he said, some 25% of whom used managed accounts. The frustration from the industry's perspective, he said, was locating the small RIA firms that could sell these products.