Given the turbulence in financial markets, now may seem an inopportune time for financial advisers to make drastic changes to the way they interact with investors.
But according to bank officials and technology providers, plenty of banks are moving ahead with their plans to implement new systems, including those that offer unified managed accounts and overlay software.
"In periods where you need to batten down the hatches, the first thing on your list is not "Let's get a new product,' " said Charles "Chip" Roame, the managing principal with the San Francisco consulting firm Tiburon Strategic Advisors.
Most managed account upgrades, however, are outsourced, which means they do not typically have big up-front costs and projects can be rolled out without huge expense, Roame pointed out.
All banks eventually will have to use UMAs and overlay technology to stay competitive, he said. "The world is going to UMAs. Is today the right time? Well, yes and no."
Smartleaf, a Cambridge, Mass., company that offers account management technology, said it had 36% year-over-year growth of new clients for its overlay software in the second quarter, compared with 26% growth in the first quarter.
In December, SunTrust Banks Inc. added overlay technology that already manages billions of client assets, and the UMA technology it implemented in October is managing more than $300 million. The project took upward of eight months and thousands of man-hours to complete.
"I can't think of a big bank that couldn't write the check" for making such upgrades, "but I can think of a lot that can't get their constituents to agree or give their time to it," said Mark Peters, who heads SunTrust's private wealth management unit.