Separate Ways II: The SMA Playbook for 2026

Why It Matters

The findings signal a turning point where operational excellence, not just strategy, will determine SMA market share, prompting managers to upgrade infrastructure and allocators to tighten due‑diligence standards.

Key Takeaways

• SMA assets under management hit record growth in 2025
• Allocators cite transparency gaps as primary concern
• Managers with automated reporting win 40% more mandates
• Regulatory scrutiny intensifies around SMA fee structures
• Demand shifts toward niche strategies with lower liquidity

Pulse Analysis

The surge in separately managed accounts reflects a broader shift toward bespoke investment solutions, allowing institutions to tailor exposure while retaining oversight. Yet the rapid expansion has outpaced many managers' back‑office capabilities, creating a transparency gap that allocators are increasingly unwilling to overlook. As data demands grow, firms that invest in real‑time reporting platforms and standardized APIs are better positioned to meet the heightened scrutiny and maintain investor confidence.

Regulatory bodies are also tightening the reins on SMA fee structures and disclosure practices, prompting a wave of compliance initiatives across the industry. Managers that proactively align with emerging guidelines—such as detailed fee breakdowns and performance attribution—are not only avoiding penalties but also gaining a competitive edge in pitch meetings. This compliance focus dovetails with the rising preference for niche, lower‑liquidity strategies, where clear cost structures become a decisive factor for risk‑averse allocators.

Looking ahead to 2026, the SMA landscape will likely bifurcate: firms that embed advanced technology and transparent reporting will capture the bulk of new capital, while those lagging in operational maturity may see mandates dwindle. The report underscores that success will hinge less on alpha generation alone and more on the ability to deliver seamless, auditable data streams that satisfy both investors and regulators. Managers should prioritize automation, data integrity, and regulatory alignment to stay ahead in this evolving market.