The unified managed account (UMA) markets rapid growth will not continue without greater standardization and automation, says a Dover Financial Research report issued Wednesday and commissioned by Depository Trust & Clearing Corp. (DTCC).
In the study, Westwood, Mass.-based Dover recommends that firms leverage current industry standardization efforts across UMA platforms to facilitate account openings, maintenance and reconciliation, as well as account conversion and setup from separately managed accounts (SMAs) to UMAs. Common protocols are also needed for portfolio overlay managers and investment managers to validate and confirm execution price, trading instructions and changes to model portfolios.
The survey was conducted to better evaluate the needs of the UMA market, said Ann Bergin, managing director and general manager of DTCCs wealth management services. Its vital that we identify the issues and obstacles that impede growth of UMAs and avoid the operational issues that have already put significant pressure on the separately managed account market.
According to Dover, DTCCs Managed Accounts Service (MAS) will bring much needed standardization to the industry, providing a centralized, automated communications platform to facilitate the electronic exchange of data throughout the life cycle of a managed account, beginning with account openings.