Discretionary Accounts Will Dominate The Advisory World In Next Two Years, Cerulli Says

Friday, August 19, 2011 07:48
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Discretionary Accounts Will Dominate The Advisory World In Next Two Years, Cerulli Says

Tags: asset management

More advisors are taking the responsibility for making trades on clients' behalf, eliminating the headaches of having to "recommend" every portfolio move, industry benchmarking group Cerulli says.

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According to Cerulli's latest numbers, a full 71% of all advised assets will be in discretionary accounts by 2013 because "discretionary portfolios allow advisors to focus their efforts on value-added services, creating greater client satisfaction, rather than tracking down clients' approval for trades."

 

In other words, if you're not chasing the client to sign off, you're free to do more productive things.

 

Open architecture managed accounts seem to be gaining the upper hand when it comes to implementing this. In these structures, advisors can either accept third-party asset selection or override the outside managers with ideas of their own.

 

Cerulli says that most of these portfolios are actually being fed by "suggestions" from the advisors' home office, but most advisors out there like having at least the option of fine-tuning the assets to create a custom solution.

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