Global Securities Markets: Navigating the World's Exchanges and OTC Markets

ISSUES FOR THE FUTURE

The SMA industry has seen a significant growth in product offerings over the past 35 years. In addition to SMAs, the following types of products have developed:

• Mutual fund advisory programs23
• Registered representative as portfolio manager24
• Registered representative as advisor25
• Unified managed accounts26

As percentages of the entire managed account industry, these products account for the following portions of the industry,27 as of December 31, 2008:

• SMA—36 percent
• Mutual fund advisory programs—28 percent
• Registered representative as portfolio manager—14 percent
• Registered representative as advisor—18 percent
• Unified managed accounts—4 percent

Unified managed accounts (UMAs) have been the primary focus of new product efforts in the industry over the past few years. However, challenges remain relating to the adoption of UMAs by advisors with respect to the amount of flexibility in the current generation of UMA products and the ability to implement fixed-income solutions within a UMA.28

Beyond the SMA industry's product development advancements, there has also been an increase in interest in SMAs outside the borders of the United States over the past 5 to 10 years. A number of SMA program sponsors now offer SMA programs in a variety of foreign jurisdictions. The establishment of these programs outside of the United States has proven challenging on several levels. First, the disparate regulatory structures in non-U.S. jurisdictions make it time-consuming ...