How Big is the Managed Account Industry?

The size of the managed account industry is estimated at 6 trillion USD. That is one big market!

With demand growing rapidly, research from Cerulli Associates projects managed account AUM (assets under management) to grow at 14.5% a year and exceed 8 trillion USD by the year 2020.1

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, 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 2016 Triennial Central Bank Survey, published in December 2016, the size of the forex market (measured by daily turnover or trading volume) was estimated at 5.4 Trillion USD.2 This $5-Trillion-Plus-a-Day figure (which some firms estimate is still a conservative number), is almost equal to the total assets of the traditional managed industry!

Now that is truly one gigantic market!

 

Works Citied

  1. Cerulli Associates. U.S. Managed Accounts 2017
  2. Bank for International Settlements. 2016 Triennial Central Bank Survey. December 2010.