The addition of nonmanaged assets to a unified managed account could be the next step in the product's evolution, but some industry providers are skeptical whether the interest in stock-picking right now is enough for this enhancement to take off.

BMO Nesbitt Burns, a wealth management unit of Bank of Montreal, announced that it has expanded its partnership with Placemark Investments Inc., a Boston unified managed account provider, to add a client-directed investment account to BMO Nesbitt's unified managed account offering, the BMO Nesbitt Burns Architect Account.

Paul Adair, a vice president at BMO Nesbitt Burns and managing director of its wealth group, said this is the first product that lets clients trade stocks in a portion of a unified managed account, which typically invests only in packaged products, such as exchange-traded funds, mutual funds, and alternative investments. "If the industry wants to get to a unified household concept, they need to create a product that brings all of an individual's investments together," he said. "This is another step toward that process where a client and an adviser really have one product that offers a complete picture of an investor's assets."

By putting all of an investor's assets in a unified managed account, advisers can "completely" allocate and diversify, Adair said.

Randy Bullard, a co-founder of Placemark, said this is "another piece to the UMA puzzle."

"This is not revolutionary, but it is another big step toward a totally managed solution," he said. "Some clients give advisers total discretion over their assets, but some want to be able to manage and trade a subset of their assets."

Bullard said Placemark is seeing "active interest" from banks about adding this capability. Many private-client groups and trust departments directly manage a lot of assets, he said.

By enhancing its unified managed account platform, Adair said, BMO Nesbitt will be able to increase the assets held in its Architect accounts. The platform has $4 billion of assets and has had 20% to 25% annual growth since it was introduced three years ago.

Adair said he expects 30% annual growth during the next three to five years now that the product has been enhanced. "We want to expand this further," he said. "Our long-range plan is to develop an adviser-managed sleeve where an adviser can manage a portion of assets. We think that that is the next iteration. We think that there is still room for UMAs to expand and become more flexible."

Tim Clift, the chief investment officer at FundQuest, a Boston unit of BNP Paribas SA that offers unified managed accounts to financial services companies, said he doubts that this enhancement will take off quickly. Fewer than 5% of investors and advisers would use such a stock-picking option, he said, because of lingering concerns about the risks of day trading.

"There is just not any kind of vast interest in this kind of tool," he said.

Clift said he expects 30% asset growth in unified managed accounts FundQuest offers but some assets would come from traditional, separately managed accounts his firm also provides.

Adair disagreed. "We had this in pilot mode prior to the official launch, and we have already seen great interest from our clients," he said. "Advisers are coming back to us and saying that clients are bringing them more money because we could do this."

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