Now and then: How have managed accounts evolved in a decade?

To celebrate the 10-year anniversary of our model portfolios, we take a look back at how managed accounts have revolutionised the adviser experience in the last decade – and how they may evolve in the future.

In early 2015, when managed accounts were still a niche product, BlackRock launched its first ETF model portfolio in the Australian market. Since then, the managed account industry has grown quickly as advisers deal with more regulations and increasing demand for their services.

As our Enhanced Strategic model range marks its 10^th anniversary, we take a look at how the industry has evolved with it – and where to next as investors face into new challenges.

In 2015, managed accounts were a small but growing industry, restricted by availability with only a few of the major adviser platforms, including Macquarie Wrap and CFS, having recently added them to the menu⁴. With just $10 billion in funds under management and only 4% of new client investments going to managed accounts⁵, most advisers weren't fully aware of their benefits, primarily using them to make investing easier for clients holding direct equities.⁶

With around 20,000 practitioners in the financial advice sector at this time⁷, and key laws such as adviser education standards and the establishment of industry-funded complaints body AFCA still some years away, advisers could service many types of clients with less cost to their business.

2015 at a glance

But after the introduction of the Future of Financial Advice laws two years before, requiring detailed documentation for any change to a client’s investment portfolio, industry practitioners were facing an increased regulatory burden and starting to seek out products that would solve for this.

As one of the first ETF model portfolio options in the Australian market, BlackRock Enhanced Strategic Model Portfolios launched in January 2015, with availability on just one platform. A relatively simple asset allocation system meant there were only 10 market signals used to rebalance the portfolio.

Like the rest of the managed account sector at this stage, growth was slow and steady, with 50 advisers using the range and around $100 million in funds under management by 2016.

In 2025, managed account funds total over $205 billion, with more than 1100 investment options available⁸. Advisers now put about a quarter of all new client investments into model portfolios.⁹

Managed account take-up has swelled over the last five years in particular, as the advice sector has faced successive layers of regulatory change and the exit of around 5000 advisers from the industry¹⁰, prompting many practitioners to restructure their businesses to ‘do more with less’. 

The investment and operational efficiency of model portfolios has driven 160% growth in FUM across the sector from 2019-2024, while adviser usage of managed accounts has surged 50% in that time.¹¹

The past decade has also seen significant growth in ethical investing as a product category, with more than 80% of Australian asset managers now applying ESG integration across multiple asset classes.¹² Similarly, in managed accounts we’ve now seen 60% of users implementing ESG integration within the models they use.¹³

2025 at a glance

BlackRock has a healthy slice of the growing managed account sector with around $6.5 billion in assets under management and availability on 10 platforms. Our evolving model portfolio range now encompasses ESG, index, international, active, ETF and custom options, serving more than 1400 advisers and over 10,000 end clients.

In a post-pandemic investment environment, characterised by higher inflation and low growth, we’ve also seen much more dispersion in returns across and within asset classes, as well as more short-term volatility as markets respond to macro ‘shocks’ such as interest rate hikes in real time.

This has driven a need for a more dynamic approach to investing beyond the traditional ‘buy and hold’ portfolio, and BlackRock’s Enhanced Strategic range has evolved as such, now incorporating more than 30 tactical signals to trigger an adjustment of the portfolio.

As today’s clients look to their financial future, we expect intergenerational wealth transfer to become a key theme in the next decade. Australians aged over 60 are expected to transfer around $3.5 trillion in assets to the younger generations by 2034.¹⁴

At the same time, housing in particular is becoming an expense that many young people will be unable to afford without family help. At today’s prices, Australians on average take more than a decade to save a 20% deposit for a home¹⁵, and it’s expected that if current policy settings stay the same, Sydney home prices will not be affordable for those relying on a full-time wage alone by 2031.¹⁶

Simple all-in-one portfolio options – like our iShares High Growth ESG ETF and iShares Balanced ESG ETF - might therefore become more popular as advisers and clients search for options to grow a nest egg for children until they are ready for full financial advice. According to Investment Trends data, almost a quarter of advisers in large practices would like ETF providers to offer more of these multi-asset products¹⁷.

Active ETFs are another fast growing product category we are likely to see more of in model portfolios, allowing investors to gain potentially higher returns at a lower cost. In the five years to May 2024, active ETF assets under management in Australia rose by around 28% each year.¹⁸

More broadly, we expect managed account take-up to continue to grow as advisers increasingly outsource investment execution and focus on helping clients into the retirement stage. According to recent Netwealth research, 83% of advised clients say their financial goals are now focused on retirement planning and aged care.¹⁹

Managed accounts are a compelling tool to help free up adviser time for these client conversations – over the last decade, it’s estimated BlackRock model portfolios have saved advisers around 340 days in admin time.²⁰

While off-the-shelf separately managed accounts (SMAs) have ruled the roost so far in terms of adviser take-up, we also see more interest in bespoke models with a more active component as the managed account market enters the next phase.

This will set investors up to face the changed economic environment ahead, where staying tactical and capitalising on long-term themes may matter more than maintaining a balance of traditional asset classes.

Whatever the future holds, we believe model portfolios may continue to play an essential role in the adviser service offering, as new product structures and options evolve with the client of the future.