How Big is the Managed Account Industry?

The size of the managed account industry is estimated to exceed 4 trillion USD by the year 2015. That is one big market!1

Research shows that growth in managed accounts has been close to 20% a year from 2009 to 2011 according to Cerulli Associates.2

Even though these numbers are for managed products that use traditional asset classes like stocks and bonds (and not managed forex ['Foreign Exchange'] or futures), it does show a growing demand from individuals who want more access to professional management of separate investments and more customized portfolios.

In the prior frequently asked question, we explained how the typical definition of a managed product is biased towards traditional asset classes, and excludes important asset classes like Forex. Unfortunately, (at this time) there is no way to calculate the size of managed forex industry, since spot currencies (the most common investment in managed portfolios) trade in a non-centralized, global marketplace, unlike stocks and bonds. Nevertheless, the size of the forex market continues to dwarf all other markets combined, and the size of the managed FX industry continues to exhibit exponential growth, as investors realize the importance currencies play in an investment portfolio.

Size of the Managed FX Industry

To give you an idea how big this industry is, let's take a look at the survey the Bank for International Settlements publishes every 3 years. In their 2010 Triennial Central Bank Survey, published in September 2010, the size of the forex market (measured by daily turnover or trading volume) was estimated at 3.98 Trillion USD.3 This $4-Trillion-a-Day figure (which some firms estimate is still a conservative number), is equal to the size of total assets that people should have invested in the traditional managed industry by 2015 – and we're still 5 years away from that!

Now that is truly one gigantic market!

 

Works Citied

  1. Cerulli Associates. Cerulli Quantitative Update, Managed Accounts 2011. December 2011.
  2. Cerulli Associates. Cerulli Quantitative Update, Managed Accounts 2009 and 2011 [comparison]. November 2009 and December 2011.
  3. Bank for International Settlements. 2010 Triennial Central Bank Survey. September 2010.