Assets held in separately managed U.S. accounts totalled about $415 billion at year-end 2001, and they are projected to approach $1 trillion by the year 2005 and total nearly $3 trillion by the year 2011, according to a new forecast developed by Financial Research Corp. (All figures in U.S. dollars.)

The managed account industry growth forecast was released this morning at the 2002 Annual Conference of the Money Management Institute in a presentation by T. Neil Bathon, president of FRC. FRC developed its projection through analysis of account trend information provided by the industry’s leading program sponsors and asset management firms.

“Our projections, in general, portray an extremely dynamic industry poised to attract increasingly strong asset flows as well as even greater sales support from individual advisors associated with firms offering managed account programs,” Bathon said. “The growth forecast documents an already well established trend toward advisor supported investment vehicles. As the decade proceeds, we anticipate that this trend will build, supported by, among other factors, the increasing prevalence of large pools of individually-directed assets that are well suited to the managed account approach.”

The number of individual accounts, currently about 1.6 million today, will increase to 4.2 million in 2005, 7.9 million in 2008, and 12.4 million in 2011, it says. Actual new asset flows into managed accounts will increase from $103.7 billion this year, to $231.9 billion in 2005, $366 billion in 2008, and $469.4 billion in 2011.

“Industry growth through the decade also will be supported by generally stable rates of client retention, with investors generally adhering to the long-term asset strategies that are characteristic of the managed account approach,” Bathon said.