Research found that advisers save an average 23.9 hours per week.

Performance, fees and platform availability drive advisers' managed accounts selection

Multi-asset class models remain the most widely used by advisers

Exchange Traded Funds (ETFs) account for 53% of managed account allocation

State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), together with Investment Trends, today released a new report revealing the proportion of advisers using managed accounts in Australia has reached a record high of 59%, tripling from 20% a decade ago. A further 16% of advisers have expressed interest in adoption, potentially bringing the total reach to 75% in the coming years.

The 16th SPDR ETFs / Investment Trends Managed Accounts Report ('the Report'), which surveyed 946 financial advisers across Australia between November 2024 and January 2025, showed that, amidst persistent global economic uncertainty, escalating inflationary pressures, and a rapidly evolving investment landscape, demand for managed accounts continues to be robust.

The Report showed advisers using managed accounts allocate, on average, close to three-fourths (71%) of clients' total assets into these accounts. Additionally, managed accounts advisers are directing a record 48% of new client inflows to managed accounts, setting a new high-up from 41% in 2024, reflecting the growing prominence of managed accounts as a primary investment structure.

This explains why funds under management (FUM) in managed accounts have surged 23.2% in the 12 months to December 2024 to a record-breaking $232.77 billion1.'

State Street Global Advisors' Vice President and ETF Model Portfolio Strategist, Sinead Schaffer, said: 'The growing adoption among the latest cohort of users is primarily driven by the demonstrated value managed accounts bring to both advisers and their clients. While freeing up their time to focus on client engagement is the key benefit of recommending managed accounts, advisers also see using managed accounts as a cost effective way to access professional investment management for their business.

'The research also found that advisers using managed accounts for longer periods reported higher funds under administration (FUA), suggesting that longer-term adopters benefit from more profitable businesses compared to newer users.'

Performance is the most important factor when selecting a managed account

Ms Schaffer said the top reason for recommending managed accounts to clients is the ability to achieve full asset allocation, with their top selection criteria being performance, fees, ability to achieve full asset allocation, availability on their main investment platform, and reputation of the asset manager.

'Half of the financial advisers chose performance as the most important criteria when selecting a managed account, while availability on the main investment platform has now surpassed fees as the second highest priority,' added Ms Schaffer.

Saving 23.9 hours a week by using managed accounts

This year, the Report again highlighted the time-saving efficiencies of managed accounts with 60% of advisers citing 'freeing up their time' as one of the main upsides of using managed accounts. Advisers reported they, or their support staff, save an average 23.9 hours per week as a result of using managed accounts in their practice, up from 22.8 hours a year ago, equivalent to approximately 1,243 hours saved each year.

Investment Trends CEO Eric Blewitt said the time savings allow advisers to focus their efforts on better understanding and supporting client goals.

'Each year more advisers are turning to managed accounts because they allow for a more holistic approach to wealth planning. The ability to tailor portfolios to meet the specific financial and lifestyle goals of clients is one of the leading reasons advisers are choosing to switch to managed accounts.'

'In fact, one in five advisers report being able to offer a more tailored service to clients due to the flexibility these accounts provide. As a result of time saving, 48% of advisers reported redirecting that time to enhance client relationships, while 26% are using it to acquire new clients,' Mr Blewitt added.

Increase efficiency by streamlining the number of managed account models

The Report showed that multi-asset class models are the most widely used, as 68% of advisers recommended the models in the past year. Additionally, the ability to achieve full asset allocation is a key reason advisers recommend managed accounts to their clients.

That said, this year advisers have reduced the number of models they recommend to clients from 18.2 in 2024 to just 12.1 this year.

Ms Schaffer explained: 'The due diligence process can be resource intensive, with advisers on average using five tools when conducting their assessment of managed accounts. As a result, both adviser and licensee have reduced this burden and simplified their approach by reducing the number of strategies they recommend.'

SMAs remain the most preferred choice by advisers

The Report showed that 89% of advisers implement managed accounts with separately managed accounts (SMAs) on platform.

Mr Blewitt said: 'Among current managed account advisers who use SMAs on platform, 71% of them use off-the-shelf model. However, it is interesting that custom-built SMAs are particularly popular with experienced managed account advisers. They are allocating 57% of new client inflows to these tailored solutions.'Other key findings:

Managed account advisers leaned toward growth-oriented (65%) and risk-based (44%) strategies in the past 12 months, but a third remain uncertain which strategies they would use going forward, reflecting macroeconomic uncertainty.

Separately managed accounts (SMAs) on platform remain the most widely used structure to implement managed accounts. With 89% implementing managed accounts with an SMA on platform.

53% noted ETFs are the underlying products in their managed accounts.

The group of non-users remains substantial at 19%, however they are open to being persuaded by reduction in platform fees and better research.

State Street Global Advisors officially launched its ETF Model Portfolio capability to the Australian market in 2019, through various intermediaries. Today, it offers four model portfolios across the risk spectrum and a target income strategy. Typically, Australian investors access model portfolios via managed accounts.

1Source: IMAP/Milliman FUM Census, as at 31 December 2024

ENDS

About managed accounts and model portfolios

Managed account is the general term that refers to the type of product or service where the underlying assets are owned by the investor but are managed or advised by a professional investment manager. Typically, Australian investors access model portfolios via managed accounts. Where the model portfolio is a collection of assets continually managed by wealth managers. Model portfolios employ a diversified investment approach to target a particular balance of return and risk or portfolio objective.

About State Street Global Advisors

For over four decades, State Street Global Advisors has served the world's governments, institutions, and financial advisors. With a rigorous, risk-aware approach built on research, analysis, and market-tested experience, and as pioneers in index and ETF investing, we are always inventing new ways to invest. As a result, we have become the world's fourth-largest asset manager* with US$4.72 trillion(+) under our care.

*Pensions & Investments Research Center, as of 12/31/23.

(+)This figure is presented as of December 31, 2024 and includes ETF AUM of US$1,577.74 billion USD of which approximately US$82.19 billion USD in gold assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. Please note all AUM is unaudited.

Important Risk Disclosures

Issued by State Street Global Advisors, Australia Limited (AFSL Number 238 276,ABN 42 003 914 225) ('SSGA, AL'). Registered office: Level 14, 420 George Street, Sydney, NSW 2000, Australia * Telephone: 612 9240-7600 * Web: www.ssga.com/au.

State Street Global Advisors, Australia Limited (AFSL Number 238 276, ABN 42 003 914 225) ('SSGA, AL') is the investment manager for the State Street ETF Model Portfolios and State Street Global Advisors, Australia Services Limited (AFSL number 274900 ABN 16 108 671 441) is the Responsible Entity and issuer of units in the State Street SPDR ETFs which are Australian registered managed investment schemes quoted on the AQUA market of the ASX or listed on the ASX. State Street ETF Model Portfolios may include State Street SPDR ETFs and other third party ETFs.

This material is general information only and does not take into account your or your client's individual objectives, financial situation or needs and you should consider whether it is appropriate for you or your client. You should ensure that your clients consider the product disclosure statement of the underlying ETFs before deciding whether to acquire or continue to hold units in an ETF. Underlying ETF PDSs and TMDs are available at ssga.com or the third party ETFs website.

General Risks: ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF's net asset value. ETFs typically invest by sampling an index, holding a range of securities that, in the aggregate, approximates the full index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance of the index.

Investing involves risk including the risk of loss of principal. Diversification does not ensure a profit or guarantee against loss. Asset Allocation is a method of diversification which positions assets among major investment categories. Asset Allocation may be used in an effort to manage risk and enhance returns. It does not, however, guarantee a profit or protect against loss.

An investment in the model portfolio carries a number of standard investment risks; these risks are outlined in each Provider's PDS which should be read in full and understood by the potential investors.

Implementation Risk: State Street does not manage the accounts of retail investors pursuant to the model portfolio strategies and the strategies are only available to retail investors through various Providers that offer account management and other services to retail investors. The actual results of accounts managed by a Provider that receives access to the strategies may differ substantially from the hypothetical results of the State Street ETF Model Portfolios for a variety of reasons, including but not limited to:

the fees assessed by the Provider and other third parties;

the Provider's decision to exercise its discretion to implement a given strategy in a way that differs from the information provided by State Street;

the timing of the Provider's implementation of strategy updates; and

investor imposed investment restrictions; and the timing and nature of investor initiated cash flow activity in the account.

'SPDR' is a trademark of Standard & Poor's Financial Services LLC ('S&P') and has been licensed for use by State Street Corporation. No financial product offered by State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by S&P or its affiliates, and S&P and its affiliates make no representation, warranty or condition regarding the advisability of buying, selling or holding units/shares in such products.

The trademarks and service marks referenced herein are the property of their respective owners. Third party data providers make no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the data and have no liability for damages of any kind relating to the use of such data.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA, AL's express written consent.

(C) 2025 Electronic News Publishing, source ENP Newswire