"Because credit unions have a very client-focused business model, they have an advantage," said Pirker. "It might be easier for them to get there. They would be so much further down the road than, say, brokerages."

UMAs provide the opportunity to include investment styles or asset classes that are not available or have a limited availability through money managers, for instance, an international small cap. They also implement parts of the asset allocation that make up only a very small portion of the portfolio and don't reach the minimum investment amount of money managers through the usage of commingled investments, which can "provide a greater level of diversification for parts of the asset allocation that make up only a small portion of a client portfolio." Pirker said one of the dangers with mixing investments in this way is the restraints.

"[It] might limit the possibilities for portfolio customization as well as for client restrictions since these instruments do not provide direct ownership of the underlying securities," Pirker said. "UMAs, to a much lesser degree, are a product that can be sold straight off-the-shelf, but they are ones that require a fair amount of advice."

Building on the UMA model is the unified managed household. UMHs focus on the totality of a client's assets, which in most cases go across multiple accounts, have multiple registrations, and are managed through multiple financial services firms. The scope of a UMH spans all taxable and nontaxable investment accounts of a given household. While financial planning has traditionally been performed on the household level, taking into account retirement, education, and any other life goals a client might have, the tools and processes used for generating investment proposals are typically specific to each product. The UMH structure allows the financial planning process to also include asset allocation, tax planning, or income/liability planning to be performed on a household level.

"Beyond consolidating a client's assets that are held at their own firm, advisors that are able to provide the full financial picture of their client's assets, including accounts managed elsewhere, will be able to provide holistic advice and will ultimately become the client's trusted advisor," Pirker said.

Still, the implementation of the UMH poses "very tough challenges" including the ability to consolidate client data from multiple firms, platform integration and whether the industry is ready or even willing to embrace the "holistic investment management" approach, Pirker pointed out. This means that while traditionally, wealth management firms that cater to the ultra-high-net-worth segment have offered coordinated investment management to their clients, which is largely achieved through manual processes, the UMH concept is to make a comparable level of service available to high-net-worth clients. Due to the large number of clients per advisor in this segment, this aim cannot be achieved without a high degree of automation and integration.

"It's a very ambitious goal. It's pie in the sky," Pirker acknowledged. "Everyone agrees that it's a great thing but the problem lies with wealth managers working together. There's a lack of communication. The industry needs to make up their mind first on how they want to manage their clients' wealth." –[email protected]