Technology, service and experience should be considered.

In the 1980s, about five providers offered managed accounts. Today there are more than 40 managed account providers. What should advisors be looking for in a managed account program for their clients? First, ask the right questions of providers; their answers will show whether they pass the test in offering the services needed. Here are 10 factors to consider:

1. Proposal-Related Technology

Advisors can create client relationships much more efficiently by using online investment strategy and proposal systems. Online systems result in proposals no longer taking five to 10 days to turn around. Advisors can complete them in as little as 20 minutes on their laptops with pre-populated new-account paperwork that can be printed in the advisor's local office.

Look for a sophisticated investment advisory system that makes recommendations on appropriate asset allocation by asset class and constructs a properly correlated portfolio of separate account managers. Also, look for proposal systems that allocate an investment strategy across multiple registrations. Thus, if an investor has an IRA, an individual account and a trust account, the system should have the capability to automatically consolidate all three in designing an asset allocation.

2. 24/7 Account Performance/Information

Advisors and clients-especially with the increased market volatility that has been with us since September 11, 2001-now expect to get current account information via the Web. Online delivery of performance information on a daily basis gets investors and advisors what they need to know most, when they want to know it. Performance information should include month-to-date, quarter-to-date, year-to-date and since-inception performance, along with allocation by manager and asset class. Also, make sure the program sponsor provides access to individual manager and total account information on individual securities, tax lots and recognized gains and losses.

3. Independent And Objective Money Management

Many managed account programs offer a good number of proprietary managers on their platforms. Yet, there are real benefits to selecting a managed account program sponsor that has no affiliations with money management companies. Under such an arrangement, manager selection and asset allocation can be purely objective and managers can easily be replaced when appropriate.

4. Due Diligence And Asset Allocation Expertise

Disciplined asset allocation and portfolio construction strategies also are of critical importance. Program sponsors should be recommending investment manager allocations that have attractive correlations to one another and that have complementary characteristics in terms of sector weights and security weights. Remember: Building the right portfolio is much more than just an asset class recommendation.

5. Relationship-Building Assistance

New as well as experienced advisors may need help from their program sponsor to meet with clients and prospects. Some clients take comfort in meeting with the people behind the program. Make sure your managed account provider has a highly experienced sales team and investment professionals who understand the needs of high-net-worth clients.

6. Dedicated Client-Service Teams

Firms that offer financial advisors a dedicated client-service team are able to provide greater assistance in new business development, client transitions and ongoing client servicing. Teams should include the program sponsor's investment consultants to oversee the relationship, investment strategists to assist in the development of investment recommendations, portfolio administrators to handle account transfers, and day-to-day client service personnel. Client service teams allow for more sensitivity and connection to the needs of advisors and their clients.

7. Efficient Data Management Technology

It's no secret that the managed account industry has significant operational challenges. The data flow among industry participants is not automated as it is in the mutual fund industry. There are few standardized processes or protocols, and data relating to separately managed accounts often flows through phones, faxes, e-mails, manual uploads and downloads and automated interfaces. This reality has caused committed program sponsors to focus on replacing these inefficiencies with new technologies. When evaluating programs, consider what systems the firm has to handle the ongoing and voluminous data flow.

8. Administration And Training

The process of starting accounts and their ongoing administration are a real challenge. Advisors have to deal with delays in opening and trading accounts. Today, new technologies automate the set-up of new accounts and the ongoing trading of accounts to avoid human error and processing delays. The time required to set up and initially trade a managed account has gone from one to two days to 15 to 20 minutes-when the right technology is in place. Make sure your provider has the systems to provide one account number for multiple managers, to efficiently trade accounts, to maintain account restrictions and to transfer low-cost basis stocks.

9. Wealth Management Platforms

Wealth management platforms offer a variety of tools. For example, financial planning tools help advisors assess the client's current financial status while incorporating the client's goals and needs. Account aggregation tools allow advisors and clients see their total financial picture by bringing in account information from multiple custodians, investment managers, banks and even credit cards. Customer relationship management tools help maintain detailed data on clients and can even provide alerts to advisors when a client's asset allocation or cash position needs review. And, it is important that advisors are able to access a client's database of legal and financial planning documents.

10. Experience And Sustainability

When looking for a managed account provider, consider their commitment to the business. Many dotcoms have come and gone over the years, and many program sponsors are divisions of much larger financial services organizations that have been newly created to handle managed accounts. Make sure to look for program sponsors that have experience and sustainability.

The above factors should guide the decision-making of any financial advisor faced with the challenge of choosing a managed account program. With the resources available from managed account program sponsors, financial advisors should have everything they need to successfully manage their practices.

Charles Widger is the CEO and president of Brinker Capital.