Why third-party managed accounts are on the rise, and what intermediaries need to know

Numbers tell compelling stories – especially in wealth management. For instance, experts predict the global wealth market will expand at an annual growth rate of almost 11 per cent between 2023 and 2030, adding tens of trillions of extra dollars to managed portfolios around the world by the beginning of the next decade.

Behind these figures lies a fundamental transformation in how professional intermediaries serve increasingly sophisticated clients. Third-party managed accounts provide intermediaries – particularly law firms, trustees and fiduciaries – with a compliant, transparent solution to support their clients whilst maintaining essential oversight and operational flexibility.  

In short, that means wealth managers and advisors gain the freedom to grow along with their clients. By outsourcing account management, they can concentrate on strategy and building relationships with customers and industry peers.  

Below, we’ll take you through the advantages of third-party managed account services and explain how opening a TPMA could help you reduce risk and streamline your advisory or wealth management services.  

Important: The information in this guide is general in nature, not legally binding, and should not be considered financial or investment advice.  

Key takeaways: 

• Third-party managed accounts (TPMAs) reduce risk and regulatory exposure for intermediaries by removing the need to hold or transfer client funds directly. 

• Compliance is streamlined across borders, with built-in Know Your Customer (KYC), AML, and CTF frameworks that help intermediaries meet legal obligations in multiple jurisdictions. 

• TPMAs support complex, high-value transactions such as international mergers, family office structures, and cross-border property deals, offering flexibility and clarity. 

• Intermediaries gain operational efficiency and peace of mind, with real-time reporting and transparent account oversight – allowing them to focus on client strategy rather than administration. 

  
  

Why intermediaries choose TPMA services 

Until recently, intermediaries – including solicitors – managed the flow of client funds in various ways. Some held funds in their own business accounts for the sake of sheer convenience, while others opened temporary bank accounts on a per-client basis. The first option meant exposing themselves to extra risk; the second felt fiddly and time consuming. Neither worked well. 

Law firms across the country stood on particularly shaky ground after the SRA introduced Rule 3.3 in 2004, which stated that solicitors “must not use a client account to provide banking facilities to clients or third parties”. Essentially, solicitors opened themselves up to scrutiny every time they held or transferred client payments – even for a short time.  

Then, in 2019, the authority updated its guidelines, adding Rule 11, which sought to provide law firms in England and Wales with a way to reduce risk by outsourcing client money management to a third party. 

According to Rule 11, when firms use a TPMA for client funds, they no longer receive or hold those funds. This reduces risk and time spent on compliance within those firms, allowing them to become more agile.

Not surprisingly, TPMAs have become much more popular with solicitors and law firms all over the UK. Solicitors in Northern Ireland are subject to a similar set of compliance rules regarding client funds, so they’ve also turned to third-party account solutions in the last few years.  

In reality, advisors of all types – not just lawyers – are subject to compliance requirements and leave themselves open to risk (and invite extra paperwork) every time they handle client funds. Know Your Customer, anti-money laundering (AML) and counter-terrorist financing (CTF) checks all swallow resources – and navigating large deposits, international financial regulations and complicated relationships with banks can be a major administrative burden. In other words, you don’t have to be a solicitor to favour the TPMA approach. 

Managed accounts make global compliance simpler 

In any regulated industry, understanding the law is essential. It’s challenging enough to stay on top of legal requirements in one country – but if your work spans multiple jurisdictions or cross-border transactions, things get significantly more complicated. 

When it comes to getting compliance right, the stakes are high, with the real-world consequences of failure ranging from sternly worded letters to hefty fines. Penalties for global financial institutions shot up by 31% in just the first half of 2024 compared to the previous year, highlighting how serious regulators are about enforcement. 

It's a tough environment, especially with the intense focus on proving where funds come from and who truly owns a business; nevertheless, gaps in oversight are more common than you might think. According to one recent survey, organisations only assess or monitor 33 per cent (on average) of their third-party relationships, leaving them open to significant, unmanaged risks.   

This is where managed account services truly shine. They act like regulatory wayfinders, simplifying the KYC and due diligence journey with compliance frameworks that automatically capture and maintain the documentation required by regulators.  

Because managed account services are centralised, their compliance procedures are consistent and always up to date with the latest rules. This means individual firms don't need to be experts in every single jurisdiction. Instead, they can feel confident that they're meeting all their obligations, freeing them up to focus on what they do best: serving their clients. 

Supporting diverse client needs 

A vast amount of money moves across borders every day. In fact, the global cross-border payments market reached $212.55 billion in 2024 and shows no signs of slowing down, with 7.1% annual growth projected through 2030. Business-to-business payments alone are set to jump by 40% by 2028, climbing from $89 trillion in 2024. Behind these numbers are real businesses expanding internationally and families managing wealth across multiple jurisdictions. 

This growth reflects a fundamental shift in how clients think about their financial needs. Today's managed account services have evolved far beyond basic investment management to handle the complex realities of modern wealth. Whether it's facilitating a multinational merger, managing escrow for a property acquisition, coordinating family governance across generations, or orchestrating large-scale philanthropic initiatives, these services adapt to whatever clients actually need. 

Take a family office managing assets across three continents, for instance. They need seamless coordination between different regulatory environments, currencies and family members with varying priorities. Or consider a trustee overseeing a multi-generational trust with beneficiaries in different countries and philanthropic commitments spanning decades. These aren't theoretical scenarios: they're everyday realities that demand infrastructure capable of handling genuinely complex situations. 

Operational efficiency and legal clarity 

Whether you're racing against the clock on a cross-border acquisition or setting up a wealth structure designed to last generations, third-party managed account services cut through complication. Everyone knows exactly who's responsible for what, which eliminates the grey areas that can derail even well-intentioned arrangements. 

The reporting alone makes a significant difference. Instead of chasing down information from multiple sources or trying to piece together compliance documentation at year-end, intermediaries get comprehensive, real-time insights into everything happening with their clients' accounts. 

At Interpolitan, we've seen first-hand how the right infrastructure changes everything for intermediaries. When we set up managed account services, we build in all the compliance frameworks from day one, so legal professionals don't have to worry about whether they're meeting requirements across different jurisdictions. They can focus on what they do best – advising clients and structuring solutions – whilst we handle the operational complexity that comes with managing sophisticated account structures internationally. 

If you’d like to learn more about Interpolitan's TPMA solutions or want to discuss how our services can help you serve your clients more effectively, get in touch today.