We talk about the use of managed accounts, and the technological issues arising from the Trump administration allowing private assets to be held in 401(k) retirement savings.

A few weeks ago, the Trump administration enabled 401(k) plans to hold private market/alternative investments, adding to a recent tweak to Accredited Investor rules. An inflow of money could be coming to areas such as managed accounts (MAs). The question is whether the wealth and advisory sector is ready.

A managed account is a customized, professionally managed solution designed for a wide range of investors – including retirement plan participants. This is usually done through a provider that may serve as a 3(38) fiduciary at the participant level. A big feature of MAs today is that they can be personalized – and that’s where newer forms of investment come in.

And with retirement plans being an important part of a portfolio for mass-affluent and high net worth individuals, wealth managers need to pay attention. 

Managed account assets grew 19.8 per cent to reach $13.7 trillion in 2024 after increasing 19.6 per cent in 2023. As fiduciary assets continue to accumulate a larger portion of total advisory marketshare, managed accounts are poised for robust growth, according to The Cerulli Report – US Managed Accounts 2025.

Total net flows into managed account programs were $811.8 billion in 2024, reaching their second-highest point ever. Unified managed account (UMA) programs experienced the highest net flows ($257.7 billion), followed by separate managed account (SMA) programs ($218.4 billion).

New assets need different reporting requirements. Private equity, venture capital, private credit, forms of real estate, infrastructure, and others present new challenges, such as how frequently valuations can be disclosed and reported; education is needed on capital calls, exits, and availability of liquidity. Getting all the data in shape requires technology. 

A firm that knows about such technology is InvestCloud, a global fintech firm.

Cheryl Nash, president of APL at InvestCloud, is optimistic that technology, if handled right, will give wealth and asset managers the tools to make new assets fit snugly into managed accounts. (APL is a managed account platform at InvestCloud that connects the entire wealth spectrum – asset managers, wealth managers, and custodians – to create, manage, and execute investment models seamlessly. It powers more than $3 trillion of assets across 10 million accounts and is the largest managed account platform in the US.)

At present, alternative assets – “alts” – are more likely to sit in brokerage accounts of large institutions and HNW individuals than in managed accounts, Nash told Family Wealth Report. 

“We are working to change that by bringing alts into the managed-account ecosystem, where advisors and clients can access them with ease and transparency,” she said. 

Partnership
Matters are moving quickly. Earlier in 2025, InvestCloud partnered with Apollo to activate its Private Markets Network, which InvestCloud said is a digital infrastructure that connects wealth managers, asset managers, custodians, administrators, and technology providers to deliver seamless, scalable straight-through processing of private market strategies within managed accounts.      .

Technology and other firms, including wealth managers, are investing in portals so that the behavior of these new assets, held in managed accounts, can be shown to the end client.

“Product innovation is key here – including moving from private purchase to model purchase, which means shifting away from one-off manual transactions, where an advisor or client selects a single private fund and executes the paperwork individually, to a much more scalable, programmatic approach,” she said.

“With model purchase, private market allocations become part of a portfolio model, just like ETFs, mutual funds or separately managed accounts. Advisors can select a model that includes both public and private assets, and clients get a diversified portfolio. By using models, we turn one-off transactions into a scalable solution – thousands of accounts can be rebalanced at once, rather than processing individual purchases,” Nash said.

Nash touched on the matter of lending against securities, otherwise known as Lombard lending. 

“We know that component is going to be very important. When investors need liquidity, but their wealth is tied up in an illiquid private market security, lending can be a bridge. When bringing private market assets to the mass market, there will be a need for flexibility for expenses, opportunities, or emergencies without disrupting the long-term strategy of the investor,” Nash said.

Widening access
A major investment theme in the past few years has been expanding access to previously hard-to-enter asset classes such as venture capital, private equity and credit. As more companies de-list, or don’t even bother to go to IPOs, it means that investors used to holding listed equities need to figure out how to improve access to sources of return. As mentioned above, the US has adjusted the Accredited Investor Rule to widen access; the UK and European Union have developed the Long Term Asset Fund and ELTIF structures, respectively. And now there's the 401(k) shift. Such changes are not without controversy because non-public market investments are typically less liquid – a point that retail investors may struggle with.

It makes sense to hold private market investments in 401(k) and other retirement accounts because these types of accounts focus on the long-term – exactly the horizon that relatively illiquid assets such as private equity require.Nash said. 

The comment speaks to an approach, pioneered by David Swensen, the late chief investment officer of Yale University’s endowment, that holds that most long-term investments should be in relatively illiquid assets rather than highly liquid securities. 

InvestCloud has committed significant resources to building technology that allows managed accounts to seamlessly adapt to the private market asset class, Nash said. “We are deeply invested in this effort. It is so energizing to see the momentum and investment flowing into a space that makes so much sense to enable a smarter financial future for the industry,” she added.