What Is a Unified Managed Account?
If you're a high-net-worth investor, you might be looking for ways to handle your assets more efficiently. Let me explain what a unified managed account (UMA) is: it's a single, professionally managed account that brings together different investments like mutual funds, stocks, bonds, and ETFs. This setup simplifies your financial management by consolidating everything and rebalancing regularly to keep your portfolio performing at its best. I see UMAs as a solid choice if you want an integrated approach to wealth management.
Key Takeaways
Here's what you need to know about UMAs. They integrate various investments, such as mutual funds, stocks, and bonds, into one professionally managed account. High-net-worth investors like you often prefer them because they consolidate multiple investments and offer comprehensive portfolio management. Providers handle services like tax planning support, a rebalancing schedule, and integrated asset management to optimize your overall risk and returns. You'll typically pay annual management fees that decrease based on your total assets under management, ranging from 1.50% to 3%. And thanks to technology, these offerings now include services from registered investment advisors and private wealth managers.
How Unified Managed Accounts Benefit High-Net-Worth Investors
As a high-net-worth investor, you have options for managing your assets, and the unified managed account is one of them. It's an evolution of the separately managed account, which is also professionally managed and rebalanced often. But separately managed accounts usually don't pool multiple investments with different objectives; they're more focused on a single strategy per account. If you want to pursue various strategies, you'd need multiple separately managed accounts. That's where a UMA stands out—it's better if you want to combine several investments without juggling multiple accounts. With a UMA, you can bring all your assets into one place, eliminating the hassle of separate accounts.
Important Note on Fees
Keep this in mind: as a UMA investor, you pay annual management fees based on your total assets under management, and those fees drop as your AUM increases.
Optimizing Your Portfolio With a Unified Managed Account
You can find UMAs offered by banks, brokerage firms, registered investment advisors, and private wealth managers—their availability has expanded thanks to technology. As a UMA provider, they take on greater fiduciary responsibility because they're overseeing a wide range of your investments, including stock positions, employee stock option plans, and third-party separate account management. They work with you to integrate all your assets, then develop a comprehensive plan. This might involve an overlay strategy for targeted diversification, or introducing options from affiliated companies that fit your goals over time. Often, they'll analyze your portfolio against modern portfolio theory to find the efficient frontier for your combined assets, helping you optimize risk and returns. You'll also get streamlined reporting, better tax planning support, and a rebalancing schedule tailored to your strategy. Standards for UMAs can vary, so you usually sign agreements that outline management, fees, and allowable investments. Fees are annual, based on AUM, and they decrease with more assets, typically from 1.50% to 3%.
The Bottom Line
In summary, unified managed accounts offer you, as a high-net-worth individual, a diversified investment solution by integrating multiple types into one account. They're professionally managed and rebalanced regularly, acting as a comprehensive tool that can include mutual funds, stocks, bonds, and ETFs. You won't need multiple accounts, and you'll gain enhanced tax planning and strategy options. Fees are based on assets under management and decrease as they grow, making UMAs a practical choice for streamlining your investments with a focus on diversification and efficiency.
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