DALLAS -- Separately managed accounts, now with a combined $529 billion in assets under management, appear headed for a more stringent regulatory landscape. While the tax-efficient investment vehicles geared toward the high net worth have enjoyed tremendous growth in the last five years with little agitation from regulators, the industry sees rougher terrain ahead.

Chris Davis, executive director of the Money Management Institute, speaking at a conference here last week, noted that while SMAs are in a "relatively benign regulatory environment," it is only a matter of time before the Securities and Exchange Commission comes knocking on their door looking for abuses. Depending on when regulators tidy up their ongoing sweeps of the mutual fund and annuity businesses, it could be anywhere from six to 18 months, Davis said.

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