This article is part of Chelmer’s managed accounts complete guide, a comprehensive resource on technology, growth and implementation for financial institutions.
For most financial advice businesses, growth follows a predictable and frustrating pattern. More clients means more advisers, which means higher costs. Margins stay flat. At some point the economics stop working.
Managed discretionary account technology changes this equation structurally, not incrementally. The question shifts from how many clients an adviser can handle to how many clients the system can manage on behalf of an adviser. This article examines what that shift looks like in practice, what your MDA software must support to achieve it, and why managed discretionary account services create a competitive advantage that platform-based SMA models can approach but rarely match.
The capacity ceiling in a traditional advisory model
In a conventional advice-led business, the adviser is the constraint. Every portfolio decision, rebalancing action and compliance check requires human input. The adviser must assess, approve, communicate and document individually, for each client.
Industry benchmarks typically place the sustainable adviser-to-client ratio in traditional models at between 100 and 200 clients per adviser, depending on portfolio complexity and service tier. The constraint is not the adviser’s expertise. It is the structure of the work itself. Manual order placement, individual client approvals, fragmented reporting and limited system integration mean that time spent on administration grows proportionally with the client base. Every new client adds the same volume of work.
For firms competing on personalised service, which increasingly defines the value proposition in wealth management, this creates a difficult bind. Standardise too aggressively and you lose the differentiation that justifies your fees. Maintain the level of personalisation clients expect and the hours required become unmanageable.
How managed discretionary account technology restructures the operating model
Managed discretionary account technology restructures the operating model so that the adviser’s time is no longer the binding constraint on portfolio management.
When MDA software holds a target asset allocation at the individual asset level, not just broad asset class weightings but specific security-level targets, it creates the conditions for automated rebalancing. The system knows exactly what each portfolio should hold, compares that against current holdings, and generates the necessary buy and sell orders without manual intervention at the client level. Rather than managing hundreds of individual portfolios through manual adjustments, advisers manage a defined set of model portfolios and the technology handles the translation from model to individual client outcome at scale.
Research from Praemium found that more than a third of advisers using managed accounts said the technology had allowed them to take on more clients, with over a quarter reclaiming more than seven hours per week on portfolio management activities alone.
For more detail on the underlying technology including target asset allocation, rebalancing and compliance integration, see our managed accounts technology requirements section in the complete guide.
The model portfolio ratio: the metric most businesses are not measuring
Adviser-to-client ratio is the metric most firms track. For businesses running managed discretionary account services, there is a second equally important ratio that often goes unmeasured: the model portfolio to client portfolio ratio.
This ratio reveals the true efficiency of the underlying MDA software. A 1:1 ratio, one model portfolio for every client portfolio, is a red flag. It typically indicates the technology cannot support shared models with individual overlays. The efficiency gain in managed accounts comes from managing a small set of target models across a large number of client portfolios. If 300 clients are attached to one of 25 model portfolios, a single change to a model propagates automatically across all attached clients. The investment management effort is applied once. The client outcome is delivered at scale.
Without a platform that holds models at individual asset weight level, supports individual client constraints applied over a shared model, and automates rebalancing, this structure cannot function efficiently. The ratio advantage disappears.
Managed discretionary account scalability: where the efficiency advantage extends furthest
Both SMAs and MDAs improve on the traditional advisory model. Managed discretionary account scalability offers something qualitatively different, and it comes down to the nature of the service.
SMA structures operate as products — every client in a given SMA holds the same portfolio, and personalisation is limited by what the product allows. MDAs operate as individual services. Each client arrangement is unique. Even where clients are attached to the same model, their individual constraints, preferences, tax structures and asset ownership arrangements are held separately.
Sophisticated managed discretionary account technology resolves the tension between personalisation and scale. It allows advisers to maintain a manageable set of model portfolios while applying individual client constraints at the portfolio level. A client can be attached to a standard model but exclude certain sectors, hold specific assets, or apply tax considerations unique to their situation. Investment management handles fewer models. The adviser delivers a genuinely personalised service to a client base that would be unmanageable under any other structure.
For a detailed comparison of SMA and MDA technology requirements, see our managed accounts software article.
Implementation timing: from days to minutes
In a manual advisory model, a portfolio manager’s decision to reduce sector exposure must be communicated to advisers, reviewed per client, and manually executed. Depending on the size of the client base, this process can take days.
In a discretionary model running on automated MDA software, the same decision propagates from model update to order generation in minutes or hours. Compliance data is already held at the portfolio level, exclusions are applied automatically, and there is no delay while clients are contacted for approval. Consistent, timely execution across a portfolio book also reduces the inequality in outcomes that arises from timing differences in manual order placement, a factor that becomes particularly relevant in volatile market conditions.
The revenue model managed discretionary account technology enables
The operational gains from managed discretionary account technology are often framed as a cost story. But the revenue implications are equally important.
Traditional transactional revenue models generate income based on transaction volume, creating lumpy, market-dependent revenue. A service-based model, where clients are charged a percentage of portfolio value on a recurring basis, generates predictable income regardless of market activity. This model is enabled by managed discretionary accounts, because the service wrapper justifies the ongoing fee structure. As the client base grows, per-client service costs decrease because many operational expenses are fixed. The margin improvement is structural, not dependent on market performance.
For a full analysis of building the financial case for managed discretionary account technology investment, see our ROI of managed account technology article (coming soon).
What this looks like in practice
The capacity improvements managed discretionary account technology enables are not theoretical. Philo Capital Advisers currently manages around a billion dollars in MDA assets, with that expected to triple or quadruple over the next four to five years. As Toby Potter notes, without sophisticated technology there would be no capacity to provide that level of service at all.
That outcome required technology capable of holding target asset allocations at individual asset level, automating rebalancing, supporting individual client constraints over shared models, and integrating with existing systems. The efficiency gain did not come from doing the same things faster. It came from restructuring how portfolio management work was organised and executed. For businesses on this trajectory, the technology selection decision is the pivotal one.
Operational metrics that indicate a healthy managed discretionary account practice
Model portfolio to client portfolio ratio. A healthy operation runs few models across many clients. A ratio approaching 1:1 warrants a technology review.
Implementation velocity. The time from model change to executed orders. For automated MDA software this should be minutes or hours, not days.
Rebalancing consistency. Whether rebalancing is applied consistently across all clients attached to a model, or whether manual intervention is compensating for technology gaps.
Operational headcount per client. If headcount scales proportionally with client growth, the MDA software is not delivering the scalability it should.
The technology question behind the ratio question
The adviser-to-client ratio ceiling that limits traditional advisory practices is not fixed. It is a function of the tools available to the business. Managed discretionary account technology does not simply lift that ceiling. It changes the underlying relationship between adviser capacity and client numbers.
Managed accounts are now used by nearly 60% of advisers, with adoption expected to reach 75% by end of 2026 (Investment Trends, 2025). The question is not whether to adopt managed discretionary account services. The question is whether your current MDA software is delivering the scalability the model promises, or whether the gap between what your platform can do and what a well-designed system enables is costing you capacity, margin and competitive position.
Chelmer’s Myriad platform is purpose-built for the flexibility and complexity that managed discretionary accounts demand.
Learn how Myriad supports managed and discretionary account services
Related articles
- Managed Accounts: The Complete Guide to Technology, Growth and Implementation
- Managed Accounts Software: Enabling Investment Personalisation at Scale
- Technology’s Role in the Managed Account Industry
Andy Robertson is Chelmer’s Director and Chief Innovation Officer, focused on shaping the future of investing and wealth management and setting product direction for Myriad, Chelmer’s wealth technology solution.