The Australian financial advice industry is in the midst of a structural shift. Over the past decade, the Separately Managed Account (SMA) has evolved from a niche solution for high-net-worth clients into the preferred portfolio delivery vehicle for a growing number of advice practices of all sizes. Industry data suggests that assets under management in SMAs have grown at a compound annual rate exceeding 15% over the past five years, a trajectory that shows no sign of slowing.
For advisers still evaluating whether a managed account structure is appropriate for their practice, this article sets out the key considerations — and explains why we believe the shift is not cyclical, but structural.
What Is a Managed Account?
A managed account is a portfolio management structure in which a professional investment manager — such as Bellmont — makes day-to-day investment decisions on behalf of a client, within a defined mandate and under a Managed Discretionary Account (MDA) arrangement.
Unlike a traditional separately managed account or a model portfolio delivered through a wrap platform, a fully managed account arrangement transfers ongoing investment decision-making responsibility from the adviser to the investment manager. This has profound implications for how advice practices operate — and for the outcomes clients receive.
The Efficiency Case
The most immediate benefit of the transition to a managed account model is time.
In a traditional model portfolio environment, implementing a rebalance or responding to a market event requires the adviser — or their paraplanner — to generate and review advice documentation for each affected client, execute trades account-by-account, and manage the administrative burden of keeping records current. For practices managing hundreds of client accounts, this is an enormous and often underappreciated operational overhead.
In a managed account structure, the investment manager can implement a rebalance across all accounts simultaneously, without the requirement to generate individual client advice. This is possible because the client has pre-authorised the manager to act within the agreed mandate. The time saving is material — conservatively measured in hours per rebalance event, and days per year across a full practice.
This efficiency dividend is not simply a cost reduction. It is a reallocation of the adviser's most valuable resource: time. Time that can be redirected toward client relationships, strategic advice, and business development.
The Investment Quality Case
Beyond efficiency, managed accounts offer a meaningful improvement in investment quality for the typical advice practice.
Most advice firms do not have the resources to maintain a rigorous, full-time investment process. The demands of running a practice — managing staff, client relationships, compliance, and business development — inevitably compete with the time required to monitor manager performance, review asset allocation, and stay current on macroeconomic developments.
By partnering with a specialist investment manager, advice practices can access a level of investment rigour and expertise that would be prohibitively expensive to replicate internally. At Bellmont, our team conducts over 500 manager meetings per year, maintains a proprietary manager assessment framework, and monitors portfolios on a daily basis. This depth of focus is simply not achievable as a secondary function within a financial planning practice.
The Client Communication Case
Perhaps the most underappreciated benefit of the managed account model is its impact on client communication.
In a traditional structure, advisers often struggle to provide timely, high-quality communication about portfolio changes — particularly during periods of market volatility, when clients most need clarity and reassurance. The demands of simultaneously managing portfolio decisions and client communication frequently mean that one or both are done poorly.
In a managed account partnership, the investment manager takes ownership of portfolio communications — providing the adviser with clear, accurate, and timely explanations of every decision made. At Bellmont, this includes same-day explanations whenever we execute a portfolio transaction, regular market commentary, and comprehensive quarterly reports — all white-labelled for the adviser's firm.
The result is a client experience that feels seamless, professional, and trustworthy. And for the adviser, it removes one of the most time-consuming and stressful elements of running a financial planning practice.
What to Consider Before Making the Move
The transition to a managed account model is a significant strategic decision. Before engaging a managed account partner, advisers should carefully evaluate the following:
Independence and alignment. Is the investment manager independent of product manufacturers, platforms, and fund managers? Conflicts of interest can subtly compromise investment decisions in ways that are difficult for clients — and sometimes for advisers — to detect.
Tailoring versus templating. Does the manager offer genuinely tailored mandates, or does it offer a standardised suite of portfolios with a thin layer of customisation applied? The distinction matters significantly for the quality and appropriateness of the investment solution your clients receive.
Communication quality. Will the manager's communication support your client relationships, or will it create additional work? Review sample reports, market updates, and video commentary carefully before committing.
Operational compatibility. Can the manager work with your existing platform infrastructure, or will a transition require significant operational change?
The managed account model has earned its growing share of the Australian advice market because it genuinely improves outcomes — for advisers, and for their clients. The question for most practices is no longer whether to move to a managed account structure, but how to make the transition well.
We are happy to discuss our approach with any adviser who is evaluating their options.