Credo’s research examines the state of Separately Managed Wraps (SMWs) in Canada today and in the future, addressing such issues the shift of product development to distributors, turnkey asset management programs, and the factors affecting profitability of SMW programs.

The Current State of Separately Managed Wraps in Canada

The Progression of Products, Platforms and Processes

SUMMARY

Managed accounts are experiencing exponential growth as investors and advisors discover the principles of effective portfolio construction and the systematic investment process. They take many forms from mass market fund wraps to separately managed accounts, varying greatly by customization ability, minimum investment amounts and structure.

As one of the key managed account formats in use at securities dealers, Separately Managed Wraps are fee-based, discretionary portfolios that allow the client to own individual securities and offer access to a range of institutional money mangers. Similar to the Multiple Discipline Products distributed by many of the large US-based wire-house broker dealers, they are poised for exponential asset growth over the next five years.

Credo’s research examines the state of Separately Managed Wraps (SMWs) in Canada today and in the future, addressing such issues as: ƒ

  • How product development has evolved from pre-packaged portfolio solutions offered by fund manufacturers to SMW platforms at distributors. ƒ
  • Who are the key players in SMWs and who uses turnkey asset management programs, or correspondent dealers, to fast track their offerings. ƒ
  • What are the factors affecting profitability of SMW programs.

This report will help your company to: ƒ

  • Understand some of the key considerations for a SMW program from an operational and administrative perspective. ƒ
  • Gain insight on asset class usage trends in SMWs for both core and specialized mandates ƒ
  • Preview the newest generation SMWs which could funnel assets not only into managed accounts, but also into mutual funds, ETFs and other asset classes.

Key study findings: ƒ

  • Dealers are regaining control as leading-edge distributors in Canada have created operations and technology infrastructures that provide advisors with alternatives to pre-packaged managed accounts. ƒ
    For sponsors, SMWs are substantially more complex to administer and report than traditional Separately Managed Accounts. Complex integration requirements, increased technology costs, and forfeiture of management fee revenue to competing managers all impact the profitability of SMWs.