Record Adoption of Managed Accounts as Australian Advisers Seek Relief from Operational Pressures

• During periods of market volatility, investors in managed accounts are perceived to behave more calmly and remain more disciplined, compared with those not in managed accounts
• Nearly three-quarters (73%) of advisers using managed accounts rely on them for core allocations
• Adviser adoption hits record highs, with 61% using managed accounts and a further 13% considering adoption, putting the market on track to reach $400 billion by the end of 2027
• Operational benefits lead the appeal: 70% cite simplified portfolio management, while around 60% point to time savings

SYDNEY - March 23, 2026 - Managed accounts have overtaken other investment vehicles to become the preferred core portfolio solution for Australian financial advisers, according to the newly released 17^th State Street/Investment Trends Managed Accounts Report. The research, published today by State Street Investment Management, Australia's largest asset manager¹, together with Investment Trends, is based on the responses of 1,086 financial advisers across Australia between November 2025 and January 2026. It finds managed account adoption has firmly entered the mainstream, as advisers respond to heightened market volatility, persistent inflationary pressures and rising operational complexity.

Adviser usage has reached a record level, with 61% of advisers now using managed accounts and a further 13% actively considering adoption, taking potential market penetration close to three-quarters of the adviser industry. Notably, new adoption has accelerated, with 27% of advisers having recommended managed accounts for one year or less.

Conviction among users is deepening. Nearly three-quarters (73%) of advisers who use managed accounts now position them at the center of client portfolios as a core solution rather than as satellite allocations. Reflecting this shift, advisers now direct 61% of new client flows into managed account solutions, up from 48% in 2025.

Over 40% of advisers agreed that during periods of market volatility their clients in managed accounts are more confident in their portfolios and less likely to make impulsive portfolio changes compared with those not in managed accounts.

"Advisers are increasingly turning to managed accounts to bring greater discipline, consistency and oversight to portfolio construction," said Sinead Schaffer, Vice President and Model Portfolio Strategist in Asia Pacific at State Street Investment Management. "In an environment marked by ongoing economic uncertainty, heightened geopolitical tensions and persistent inflationary pressures, advisers are looking for scalable, outcomes-focused solutions. Managed accounts help support long-term investment discipline while simplifying portfolio management and rebalancing."

Managed accounts funds under management (FUM) have reached a record of $256 billion², with the industry expected to grow to $400 billion by the end of 2027.

Beyond client outcomes, advisers are also seeing tangible commercial benefits. Almost six in ten (59%) say managed accounts have improved business profitability. Adoption is highest among larger and more profitable practices.73% of advisers from practices with more than 5 advisers use managed accounts, compared with 61% of advisers in practices with 2 to 5 advisers and 54% of sole advisers. Around two-thirds (65%) of advisers from practices reporting net profit margins above 30% are using managed accounts, versus 59% of advisers from practices with net profit margins below 30%.

Efficiency gains drive adoption as operational pressures mount

The strongest benefits cited by advisers are operational. Seven in ten (70%) point to simplified portfolio management and rebalancing as a key advantage, while around 60% highlight time savings, reduced compliance workload, and improved scalability. Notably, 59% of those who reported time savings say managed accounts allow them to service a larger client base, driven by the time saved through automation and streamlined processes.

Governance benefits are also being recognised. Around half of advisers say managed accounts strengthen governance and support best interest obligations, an impact that is particularly pronounced among smaller advice practices.

"As managed accounts move into the core of advice delivery, advisers are reporting benefits that extend well beyond investment implementation," said Eric Blewitt, CEO of Investment Trends. "Many cite easier portfolio monitoring and access to institutional-quality investment management as key client benefits, while practice benefits - particularly simplified management, time savings, and reduced compliance workload - are reinforcing managed accounts as an essential operating tool for advice businesses."

Implementation barriers continue to ease. One in four advisers (23%) now report no challenges implementing managed accounts, up from 18% the previous year. Among advisers yet to adopt, the main hurdles are less about belief in the benefits and more about the perceived cost, effort and complexity of transitioning existing clients.

Performance and platform access shape adviser decisions

When recommending managed accounts, advisers rank performance as the most important factor (46%), followed by availability on their primary investment platform (35%), competitive fees (28%), and the reputation of the asset manager (26%).

Advisers want solutions that deliver consistent outcomes for clients while integrating easily into their existing platforms and advice processes. Managed accounts are typically aligned to clients' risk tolerance and investment horizon, and are most commonly used for longer-term investors. More than half of advisers use managed accounts for clients investing for 6 years or longer, with an average investment horizon of 7.6 years.

SMAs remain the preferred choice by advisers

Separately Managed Accounts (SMAs) remain the most widely used managed account structure, with around nine in ten advisers implementing managed accounts via SMAs.

Off-the-shelf solutions continue to dominate, with one-third of advisers using pre-built models with minor customisation. Ease of implementation, cost efficiency for clients and reduced rebalancing requirements underpin their popularity. Use of ETFs within managed accounts is also rising, with passive ETF allocations increasing from 16% to 21% year on year.

Australian investors typically access model portfolios through managed accounts. State Street Investment Management officially launched its ETF Model Portfolio capability in Australia in 2019, offering five model portfolios across the risk spectrum and target income strategy. Model portfolios employ diversified investment approaches designed to balance risk and return in line with specific investment objectives.

¹Source: Rainmaker Wholesale Advantage Report, as of September 30 2025.

²Source: IMAP/Milliman, as of June 30, 2025.

About managed accounts

Managed account is the general term that refers to the type of product or service where the underlying assets are owned by the investor but are managed or advised by a professional investment manager.

About State Street Investment Management

At State Street Investment Management, we have been helping create better outcomes for institutions, financial intermediaries, and investors for nearly half a century. Starting with our early innovations in indexing and ETFs, our rigorous approach continues to be driven by market-tested expertise and a relentless commitment to those we serve. With over USD5 trillion in assets managed*, clients in over 60 countries, and a global network of strategic partners, we use our scale to deliver a comprehensive and cost-effective suite of investment solutions that help investors get wherever they want to go. State Street Investment Management is the asset management arm of State Street Corporation (NYSE: STT).

*This figure is presented as of December 31, 2025 and includes ETF AUM of $1,950.80 billion USD of which approximately $173.02 billion USD in gold assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Investment Management are affiliated. Please note all AUM is unaudited.

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