Insurance co. affiliate makes Cerulli's top-10 third-party SMA provider list. Third-party separately managed account (SMA) provider Curian Capital , which has been in business since the spring of 2004, says it has surpassed the $2-billion-in assets mark, up from around $781 million at the end of September 2004.

Earlier this year Curian made Cerulli Associates ' list of the top 10 third-party SMA vendors for the first time, hitting the number 10 slot with $1.9 billion in assets under management at the end of March 2006.

"The development of the SMA space, coupled with Curian's robust advisor-training programs and unique technology platform, has provided the foundation for consistent growth," says Michael Bell, president and CEO of Curian Capital. "Over the last year, we've expanded our wholesaling force and taken steps to enhance our back-office infrastructure."

Persuaders

The "unique technology platform" Bell refers to is Denver-based Curian's fractional-share, manager-model-based approach, which allows it to offer SMAs at an industry low of $25,000. The industry average for a customizable private-client equity SMA is more like $100,000.

Bell's mention of Curian's recently expanded wholesaling force is a bit of a feint, however. Late in 2004, the Jackson National Life Insurance subsidiary fired about 10% of its 200 or so employees, including 15 of its 40 wholessalers. Earlier this year Curian said it planned to hire nine new wholesalers by about now. This hiring spate was meant to re-align external and internal sales staff, split 15 to 10 in favor of the road warriors at the end of 2005, to the one-to-one ratio it had before the 2004 cut-backs.

Even without the nine new wholesalers, Curian seems to have an unusually large sales staff for an SMA provider. One of its established competitors, with better than 10 times Curian's assets under management, says it has 15 wholesalers; another one, slightly smaller, fielded eight wholesalers as of late winter 2006. There may, however, be firm-to-firm differences in definitions of "wholesaler" and "sales support."

Initially targeting banks and credit unions, Curian has recently turned to the independent brokerage space. To date the SMA sponsor says it has has secured more than 300 selling agreements, which have resulted in more than 16,700 accounts from 22,460 financial professionals.

Curian's future steps, says Bell, includes a wholesale campaign focused on persuading brokers who are fee-based neophytes of the wisdom of adopting a more consultative approach with their clients. -FWR

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