The Money Management Institute reported that assets in separately managed accounts have grown 17 % over the last year. This growth is relatively modest compared to what the industry could see in coming years, said Jean Sullivan, managing principal at Dover Financial Research, which helped compile the data for MMI along with Financial Research Corporation.

"There are several obstacles facing the industry right now," she said. "Once these hurdles, such as channel diversification, financial advisor penetration and systematic operational issues are overcome, we believe the industry will expand even faster."

Much of the asset growth can be attributed to new net sales, with wirehouse firms accounting for about $30.4 billion of the total new net sales.

The fact that there are now more than 2.1 million industry accounts is yet another explanation for account growth. Large-cap and mid-cap value equity accounts experienced the largest growth rates during the first quarter of 2005.

In the first quarter, international products' share of the SMA market declined to 2.5% and fixed income allocation is now 4%, meanwhile, domestic equity markets SMAs comprise approximately 53.6% of all assets.

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