Recently, we kicked off our first-ever SMA roundtable, bringing together a group of industry leaders who are dedicated to expanding and supporting their firms’ Separately Managed Account (SMA) business. The conversation was a lively mix of excitement about the future potential of SMAs balanced with the practical challenges of managing them, from staffing to operations. This blend of optimism and uncertainty made for an engaging and insightful dialogue among industry experts. Here are the three key insights we gathered from the event:
The role of tax management and customization in driving growth is expanding beyond a few select asset managers.
It’s hardly a shock that tax management and customization are anticipated to keep propelling growth, given the value they provide advisors in serving their clients. What was unexpected, though, was the number of managers at our roundtable already investing in or currently offering such solutions. The term “direct indexing” often brings to mind the products of only a few major players. Yet, the roundtable made it clear that the ability to manage taxes on SMAs is far more widespread.
Utilizing third parties to apply overlays to active equity strategies makes these options more accessible to managers who previously steered clear of the operational hurdles and support challenges involved in tax management and customization.
Our newest research on SMAs, derived from a survey of asset managers, revealed that 44% of respondents now offer personalized or customized fixed-income SMAs. For sizable advisor teams and Registered Investment Advisors (RIAs), customized fixed income—especially municipals—has emerged as a preferred method for initiating client relationships.
Specialist teams are becoming a significant differentiator.
Our recent “Productivity Insights” report on asset manager staffing found a slight increase in the average number of specialists at SMA-focused asset managers in 2025, with 29% of managers now featuring the SMA specialist role, just a tad up from 28% last year. Although this numerical shift is modest, much of our roundtable was centered on how specialists provide point-of-sale and ongoing support for SMAs. More than ever, SMAs are viewed as a service rather than a mere product. The strategic use of specialists to bolster this business aspect can be crucial, depending on the type of SMA service offered by an asset manager.
This evolving need for more specialty support is particularly evident in manager-traded strategies and applying tax management. Such support might not always fit well within an external sales role due to time constraints or expertise requirements.
How firms structure this support can set them apart, especially in niche areas like the laddered bond market where both product and pricing can become commoditized. We learned of several support models—centralized desks, a specialist for each division, and more. Some firms found that having a specialist act as a single point of contact for SMA queries worked best, while others preferred a role that supported external salespersons on an as-needed basis. In all cases, the structure evolved through trial and error and is almost universally viewed as a factor in these firms’ growth in their SMA business. Of course, it’s important to note that not every SMA provider needs specialists—it all hinges on the type of SMA solution a firm is offering.
Growth isn’t about targeting a single channel.
A focal point of the session was the question, “Where will the growth be?” Our research indicates that SMA managers expect sales opportunities by channel to remain relatively consistent with current trends. Attendees echoed this sentiment, noting that growth is less about specific channels and more about working with particular types of advisors, teams, and meeting client needs. Wirehouse firms hold the majority of sales right now and possess the tools to maintain their dominance, but asset managers are increasingly tapping into new opportunities with enterprise RIAs and independent broker-dealers, forging these connections on a partnership-by-partnership basis rather than through broad adoption across various channels.
The market splits into segments defined by platform sophistication (like the wirehouse channel) and those shaped by investor needs absent an extensive platform infrastructure. There are possibilities within both segments, yet the SMA products and support necessitated by asset managers will differ with each.
While some SMA market opportunities and challenges are universal, the most crucial ones will vary for each manager. SMA managers must clearly articulate the value their SMA service offers and how SMAs fit into their firm’s overall strategy. Facing multiple opportunities and challenges will be daunting if these questions aren’t answered. Our Distribution Solutions team is here to help clarify these answers, and our WalletShare for SMAs service aids in executing SMA go-to-market strategies, offering insights into advisors conducting substantial SMA business. Feel free to reach out to learn more.
