June 9, 2026
ASIC Key Issues Outlook for 2026
Explore regulatory priorities, including ASIC’s focus on private credit markets, high-pressure sales tactics, inappropriate financial advice and AI risks.
Managed accounts are growing in popularity, and fund managers must learn to balance the advantages of capital raising via managed account structures against complex legal and operational constraints.
Their growth has not gone unnoticed by ASIC, which has launched a probe into the managed accounts sector and a separate consultation on the legal framework applicable to managed discretionary account services (MDAs).
Here’s what fund managers need to know about the rise of managed accounts.
A managed account is an investment structure in which a client’s portfolio is managed according to a defined investment strategy by a professional fund (or portfolio) manager. This is in contrast to one that’s constructed security-by-security by the financial adviser.
Unlike a traditional managed fund that pools investments in one vehicle, in a managed account structure, the client retains beneficial ownership of the underlying assets, meaning tax impacts are felt at the individual investor level. This structure effectively provides investors with transparency and choice. Day-to-day portfolio construction and rebalancing are handled centrally, together with regular investor reporting, which increases their popularity among advisers and retail clients alike.
Within the broad managed account category, the two most common types are:
An SMA is typically a non-unitised registered managed investment scheme or investor-directed portfolio-like service. SMAs are operated by a licensed responsible entity, are required to have a compliant constitution and compliance plan and must issue regulated disclosure documents, such as a product disclosure statement. An MDA is a non-unitised managed investment scheme that is exempt from many of the more onerous requirements that apply to an SMA, but is still subject to regulation by ASIC and must comply with specific legislative and policy requirements published by ASIC.
The benefits of managed accounts for investors may include:
The benefits of managed accounts to advisers may include:
Because of these benefits to both clients and advisers, managed accounts are booming. Here are a few reasons why they’re on the radar:
Globally, the managed accounts market is projected to hit US$5.1 trillion by 2026. Offering managed accounts is an effective way for fund managers to expand their Assets Under Management (AUM) and attract additional capital.
Managed accounts give investors real-time visibility into their portfolios, allowing them to monitor trade activity and quantify risk exposures in real time during periods of economic volatility.
Superannuation funds, insurance companies and family offices are also driving the trend. Managed accounts offer tailored investment strategies, custom restrictions and the ability to optimise cash usage through cross-margin arrangements.
Because managed accounts offer streamlined reporting and administration services, more portfolio managers are freed up to focus on generating returns in investor portfolios.
Fund managers need to rethink long-standing distribution and marketing approaches. The power dynamic is shifting toward model portfolio gatekeepers and platforms, away from fragmented adviser-by-adviser decisions. The competition to have your investment strategy included as a model portfolio offered via a managed account is intense, and the criteria of the managed account provider can be stringent (e.g., performance, cost or platform presence).
Fund managers are effectively competing for fewer spots on approved product lists or menus for managed accounts. The emphasis on cost means passive index funds and ETFs are capturing many of the core allocations, potentially squeezing out higher-fee active fund managers unless they offer clear product differentiation and benefits.
Fund managers might find that even long-standing adviser supporters can no longer allocate to their fund if it’s not “model endorsed”. The adviser mindset has shifted: rather than picking among dozens of funds, advisers are looking to a model for answers. As a result, fund managers face the challenge of maintaining brand visibility and preference among advisers even when advisers aren’t the ultimate decision-makers.
Depending on the flexibility of the managed account, investors may request trading vetoes or specific instructions that could lead to divergence in model portfolio performance. This flexibility also places a greater onus on advisers to ensure the client’s portfolio as a whole remains suitable for them.
Methodologies for performance fees and partial withdrawals can get complex and, therefore, need to be carefully managed.
Managed accounts often allow for immediate capital withdrawal or contract termination without notice, meaning exit strategies and liquidity management are critical.
Hands-on requirements include daily real-time reporting and "pari passu" trading challenges — especially when restricted to brokers mandated by the investor.
ASIC has launched a probe into managed accounts, specifically focusing on governance frameworks, management of conflicts of interest and outcomes for consumers. ASIC commenced this surveillance in late 2025, issuing “please explain” notices to licensees and managed account providers, seeking information about any sales and revenue targets, inducements and incentives for promoting managed accounts to retail clients. ASIC is also concerned about a lack of transparency around both fees and performance.
Separately, ASIC is also consulting on the regulation of MDAs and whether the existing relief from scheme registration requirements and various fundraising and disclosure requirements remains suitable in the booming MDA sector. Change and greater regulation are inevitable.
As ASIC zeros in on the managed accounts sector, expect increased regulation and greater emphasis on conflicts of interest and governance arrangements, as well as heightened scrutiny around distribution and marketing practices and how financial advisers are remunerated in connection with the managed accounts they promote.
Contact PMC Legal today to ensure your managed account arrangements are structured for regulatory resilience in light of ASIC’s probe into managed accounts.
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