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Are managed accounts going to become the default architecture of financial advice in Australia? Well, the numbers certainly suggest so.

Once considered a niche or specialist solution, the growth rate for Australian managed portfolios' assets under management in the year to June end was 24.6% to now be closing in on $260 billion.

While much earlier in the journey, the trajectory appears to be emulating those seen elsewhere in the world. According to data cited in the inaugural North Managed Portfolios Insights Report, in the US today, third-party models account for US$646 billion ($988bn), while in the UK managed portfolios are valued at £139 billion ($279bn) — around 14% of the total wealth market.

Based on this and the current market, according to North, it’s no longer a matter of if but when managed portfolios become the default for local advisers.

AMP general manager, managed portfolios David Hutchison says this is because financial advisers are not only providing advice more efficiently and curating better performing portfolios for clients with heightened governance but are also getting to spend more time with their clients.

But there’s still some way to go, with only 25-30% of advised assets currently in managed portfolios, according to the Institute of Managed Account Professionals.

“Today we've got around three in five advisers using managed accounts and about 25% of advised assets. So, while we’ve seen some great take up, there’s still a long way to go as well,” Hutchison says.

He believes much of the hesitation around adoption comes down to just how big a change switching to managed accounts can be for an advice practice.

“Adopting managed accounts does require a change, and so it depends on how good a change agent the adviser really is. It requires thinking differently about your new clients, about your existing clients, as well as your support staff,” he says.