Separately managed accounts continue to grow at a much faster pace than mutual funds, Barron’s reports. In the 12 months through March 31, assets in SMAs rose 36% to $530 billion, and by 2008, they should top $1 trillion, according to Cerulli Associates.

But there are other factors fueling SMAs’ growth. Changes in the way financial advisers approach customers is also a dynamic, and the ability to customize SMAs works well with the new fee-based, as opposed to transaction-based, model.

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