Mutual fund companies wary of the encroaching threat of separate accounts, take heart. Even that industry is grappling with dilemmas over how to continue growing. The key question the separate account industry asks itself is, should it continue targeting elite investors or mass market to a broader customer base?

The Money Management Institute (MMI), the Washington-based trade group for the separate account industry, predicts that assets held in separately managed accounts, $415 billion as of the end of 2001, will reach $1 trillion by 2005.

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