The Future of Advice: The State of the UMA and the Mass Market

by David Easthope, September 20, 2011
Product Trends/ Reviews
North America

Abstract

The unified managed account (UMA) is more than an account structure or advisor capability. It can be more fully described as a radical new approach to efficiently providing advice to clients across multiple accounts. In addition, many of the same benefits that apply to high net worth investors can also apply to the mass affluent.

In a new report, The Future of Advice: The State of the UMA and the Mass Market, Celent provides a status update on the UMA sector and points the microscope on developments in the mass affluent market segment.

UMA structures are not generally marketed to the mass affluent, since minimums are generally over US$250,000 in investable assets, out of the reach of much of the market. In addition, adopting a UMA is a big mental leap for most mass affluent investors and their advisors.

In 2011 UMA asset growth has not matched the most optimistic projections. However, despite these shortcomings, discount brokerages are increasingly supplying platforms to support UMA delivery to a wider audience of investors, including the mass affluent segment.

“We continue to believe that mass affluent investors will find the UMA account structure increasingly useful and appropriate,” says David Easthope, Research Director with Celent’s Capital Markets Group and author of the report. “Industry momentum, advisor education, marketing, and technology will all advance the UMA structure to a broader audience over time.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

 

Whither the UMA?

3

 

The UMA for the Mass Market

4

Introduction

5

Why the UMA?

 

 

A UMA Is a Radical New Approach

6

 

How We Got to This Point

7

 

UMA Is Targeted to HNW But Increasingly Relevant to Mass Affluent

8

 

Assets Grow But Lag Estimates

8

UMAs for the Mass Market

10

 

The Mass Affluent Opportunity

10

Conclusions

12

Leveraging Celent’s Expertise

13

 

Support for Financial Institutions

13

 

Support for Vendors

13

Related Celent Research

14

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