As industry dialogue about separately managed account (SMA) platforms has shifted beyond connectivity to flexibility, providers are responding to asset managers' key question: "How can we profitably capture a piece of the SMA growth?" Assets in this type of structure are expected to exceed $1 trillion by 2008.

Managers' ability to connect with a variety of SMA sponsors - long perceived as the major stumbling block - is now a given, thanks to our growing familiarity with file transfer protocols and standard messaging types. The next big step toward operational efficiency will be the Money Management Institute's uniform file formats for communications between sponsors and managers.

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