Sponsors of managed accounts for high-net-worth investors continue to look to consolidate their platforms to a single-account architecture, but competing priorities and other challenges have hindered their efforts thus far. Still, firms should continue to strive for a unified managed household, according to a new study.

Platform consolidation provides myriad benefits, Cerulli Associates says. For sponsors, oversight of managed account programmes and client accounts becomes far more streamlined on a unified chassis. “For advisers and their clients, a unified account simplifies paperwork, reduces client questions, and allows for a holistic view of all client assets,” senior analyst Matt Belnap notes.

However, there are other priorities, Cerulli’s research finds. The top two priorities for managed account sponsors are increasing the use of home-office managed account products and providing better portfolio construction support for advisers, with 45% and 39% of sponsors selecting those two choices, respectively.

Platform consolidation continues to remain an important goal. More than one-third (37%) of managed account sponsors rank platform consolidation as one of their top three priorities in 2021. According to the research, one-third (34%) of managed account sponsors are planning to move into a single account infrastructure but have not yet made the change, while another 7% of sponsors are counting on their turnkey asset management programme (TAMP) or custodian to make the changes for them.

In all, a slight majority of managed account sponsors (55%) plan to consolidate, or have consolidated, to a single-account infrastructure, while the remaining 45% plan to allow various programmes to exist on different platforms.

Cerulli asserts that platform consolidation is a worthwhile endeavour and can lead to a better experience for managed account participants. The move is an important first step towards an even greater goal: the unified managed household (UMH). In the UMH, all household assets are aggregated in one location and the client’s full financial picture can be managed holistically.

A key aspect of the UMH is asset location, placing investments and asset classes in the most advantageous location across a client’s various investment accounts, which creates the opportunity for substantial tax alpha.

“The UMH, and the holistic financial advice and tax alpha that it provides, are increasingly attainable,” says Belnap. “An important first step, though, is the consolidation to a UMA, toward which sponsors slowly and steadily strive.”