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Separately Managed Accounts To Remain Investment Bright Spot

by Carla Johnson, Investors Offshore.com

25 October 2001

Executives at Merrill Lynch have claimed that despite the tough market environment of the last 12 to 18 months the separately managed money segment of the private client investment services industry is growing at such a healthy pace that it is expected to rise rapidly over the next few years with industry assets doubling to around $650 billion by 2005.

In a statement released by Merrill Lynch, Robert Dineen, head of the firm's managed assets group, said: 'The outlook for the separate accounts market is excellent. Our financial advisors are building their business and expertise in our ConsultsSM program and other investor-friendly services at rates far in excess of what we predicted a year ago. Client demand for our separate-accounts service looks strong well into the foreseeable future.'

Merrill Lynch says the accounts have proven popular with investors. According to the Money Management Institute, the separate accounts industry trade association, total assets in managed accounts (including separate accounts and managed mutual fund accounts) shot up by 5.5% in the 2001 second quarter, rising to $403.1 billion from $382.1 billion. Separate accounts growth has remained strong despite substantial market turbulence, with the S&P 500 index dropping by 20.39 per cent by the end of September and total mutual funds assets declining by 3.3 per cent as of the end of August.

Audrey Kurtzman, a Merrill Lynch wealth management advisor with around $225 million of separately managed assets, explained: 'When we sit down to develop our investment policy, to set an asset allocation model and to screen managers, it is all designed with one goal in mind — creating a disciplined, customized approach that will work over many years and many market cycles.'

'At no time is that kind of approach appreciated more than in times of market volatility and stress such as that we've experienced over the last year and a half,' she added.

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