Rich Behr, an independent advisor with Investment Management Consultants Ltd. in Denver, says, "Approximately 75% of our client base is utilizing SMAs in the traditional form. We are in the process of evaluating the full impact, regarding cost savings and efficiencies, of moving to a UMA platform. We feel they are a natural evolution of the SMA industry, and that the improvement in technology and ease of use will make these vehicles more attractive for the industry as a whole."

MacKillop says that it takes longer for advisors to adjust their business models than it takes for new technologies to be developed, in large part because the industry has not done a thorough enough job of educating them about these new offerings. Third-party providers tend to devote more time to educating advisors about their product solutions, and for independent advisors the training information is critical.

Says Alan Sislen, a managed accounts pioneer, president of Managed Account Perspectives LLC and former chief of Merrill Lynch's Investment Consulting Group, "For many of the independent advisors, they are dependent on what their vendors offer. I believe the market is moving in this direction [UMAs], and the primary vendors to the independents will provide a solution. This may also be one of those situations where the smaller, more nimble firms will have an edge if they make the decision to offer UMAs."

The independents will have plenty of options. In addition to AdvisorPort, the other usual suspects like Lockwood, Placemark, EnvestnetPMC, FundQuest and Brinker will not be far behind. "There are some other companies that don't appear as frequently on the radar screen that have outstanding technology development capabilities," says MacKillop. "Firms like Net Asset Management and Oberon Financial Technologies may actually come up with great solutions in a shorter time frame because of their focus on, and expertise in, technology development."

LPL already has a program, Strategic Asset Manager (SAM), which allows advisors to combine mutual funds, individual securities, ETFs and other classes. But according to the Cerulli report, their program (as well as others) would fit into a more broad-based definition of UMA category. The distinction is that the firms that currently are making progress with UMA technology are including separate accounts as a main component.

Independent broker-dealers like American Express "are able to shift final decision-making about end-consumer pricing to the advisor," states the Cerulli report. "[They] deliver the asset management and platform fees to the independent advisor and allow the advisor to apply their advice fee component on top of these expenses to arrive at the total end-client cost."

The independent broker-dealer of American Express Financial Advisors' not-yet-launched Premier program combines single-style separate accounts, multiple style accounts, mutual funds, ETFs, hedge funds-of-funds, single securities and cash management products.

Some advisors may not realize the critical need for the technology in their practice, says Horn. "The RIA firm may think, well I only have two people handing this end of the business. However, if they can free up those individuals, the advisor can better refocus their energy on building their practice, and they will see that top line revenue will grow much faster with this technology. Advisors want to get out of the back-office business. The new model is to outsource all of the data manipulation-spend more time on servicing clients."

MacKillop says that clients will likely become confused if advisors make the mistake of trying to explain the UMA concept in all its glory, or to describe the differences between separate accounts and UMAs. "A glazed look would set in almost instantaneously," he says. "The wise advisor will steer clear of the jargon and the technical mumbo-jumbo, and should resist the temptation to pull back the curtain and show the client how the wizard does his magic."

He says that many advisors get very excited about new technologies that help serve clients better, but advisors should spare them the details. "Doctors learned this years ago. They do not describe to the patient the details of how they are going to perform surgery, or the tools they are going to use. They just tell the patient that they will make the pain stop. We in the financial services industry should follow the same approach."