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SMA Assets Moved Higher in Third Quarter

Managed account assets have eclipsed the half-trillion dollar mark, as a robust rally in stocks and strong account growth bolstered the largely fee-based business.

Assets held in separately managed accounts grew to $506.63 billion at the end of 2003, from $456.29 billion at the end of the third quarter of 2003, according to industry trade association Money Management Institute, Washington.

That represents a 11% increase from the previous quarter and a 29% pop from the end of 2002.

The data was compiled through a survey of sponsor firms and their selected professional portfolio management firms.

"Our industry is keeping pace with the general expansion of equity markets this year, and has even exceeded the growth of other investment sectors in comparable periods this year," said Bruce Aronow, executive vice president, CFO and COO of Rorer Asset Management. Aronow serves as the chairman of MMI's oversight committee on industry data and analysis.

Some of the biggest sponsor firms include Bank of New York, Smith Barney, Merrill Lynch, Morgan Stanley, Prudential and UBS. Roughly a dozen of the largest players in this space collectively represent 90% of the overall market.

The industry's average account size rose 12.5% to $236,963 in the second quarter, according to data recorded as of June 30, 2003. Banks and third-party distribution channels have significantly larger accounts than wirehouses and regional firms.

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