Big insurer Nationwide Financial, which will begin selling separately managed accounts through banks this Thursday, is jumping aboard a product juggernaut that a research firm says should reach $1 trillion of sales by 2007.
Matt Riebel, president of Financial Institutions Distributors Agency Inc., the Nationwide division that distributes through banks, said the Columbus, Ohio, insurer, which began selling separately managed accounts in December, sees a significant opportunity in the bank channel.
"We want to get in at the infancy," Riebel said. "We want to be able to define what the market looks like. We want to be a pioneer in the business. We see a unique opportunity selling through banks and advisory services programs."
Nationwide is adding financial planners and accountants as well as banks to its managed account distribution effort this week, and the push includes selling mutual fund wrap accounts.
The company manages $102.9 billion of assets and will look to leverage its 400 banking relationships to develop fee-based business.
A report issued by the TowerGroup predicts that managed accounts will grow at a compound annual rate of 18.5% during the next five years, from $398.7 billion of assets at Dec. 31 to $1.1 trillion by 2007.
Matt Schott, the TowerGroup research analyst who wrote the report, predicted that within 15 years, managed accounts will have the dominant share of all direct ownership of equity and bonds by retail investors.