"I think the core task for the industry is to provide a venue where both the client and advisor will have the ability to see and work on all those investments at the same time," says Goldberg. "After all, what good is it if an SMA has great allocation and diversification strategies on its own, when the balance of the client's assets and portfolio skews it to the point that it's not effective."

Goldberg, like many others in the industry, thinks that if new tools are only applied to the world of separately managed accounts, broker-dealers will not give advisors what they need to serve clients properly. "The opportunity for the industry is to move toward universal tools that are used and effective in SMAs as well as across the board, so the advisor can manage that relationship the best way possible," he says.

More Choices For More Clients

So despite the upheaval of recent years and the ongoing evolution of separately managed accounts, is it easier for advisors to conduct SMA business than it was in the past? Are SMAs becoming more "client-friendly?"

"Absolutely," says Kawakami. "If you think back ten years ago, we were calling the money manager, who'd then ask for a commitment on $40 million. 'We don't do it that way, we're an independent,' would be our response, and they'd hang up the phone."

Fortunately, Kawakami says, times have changed for independents. "Now we're working with the best managers in the industry, technology is constantly improving and we've put SMAs into a platform they're already successfully using for funds and individual issues. The advisors are starting to figure out that, yes, they have to learn a new type of investment, but the support's there if needed."

As for the continued evolution of separately managed accounts and its technology, one thing is certain: multi-discipline-type accounts (MDAs) and unified managed accounts (UMAs) also are quickly becoming part of managed money for independents.

Royal Alliance (AIG), for example, has already begun offering MDA-type accounts. And although Goldberg admits it has yet to receive an "enormous reception," he believes in the growth of this area. "We're in the early stages of product innovation and development within these advisory programs, and we'll see some unique product developments coming out on the managed side of our business," he offers. " The people on Wall Street who are managing money on a private basis are completely different from the people who developed funds, annuities and some other securitizations. In that sense, we'll see some crossover."

Likewise, LPL has also begun offering multi-discipline accounts. "We launched our first multiple-discipline account in February, called the Manager Select Diversified Portfolio, and we went with what I call kind of a multi-affiliate approach," explains Gallman. "We wanted to find a distributor that owns several institutional independent managers, but could tie those together with their own internal overlay portfolio capabilities. As a result the firm we selected-CDC IXIS-has developed nine models for us, five modeled after our asset allocation models with $500,000 minimums and four broad asset class portfolios that contain two to three managers with $250,000 minimums. It's been a huge success."

Gallman says LPL's advisors requested lower custody, clearing, administrative and management fees, and the firm agreed. "We're continually making those types of price adjustments so they are more profitable for them."

Although Lincoln does not currently offer an MDA-type product, Studin says it's coming down the pike this year.