Q: What is a separately managed account?
A: A separately managed account is an investment portfolio of stocks, bonds, cash, and other securities that is tailored to meet specific investment objectives.
Q: What are the benefits of separately managed accounts?
A: Separately managed accounts can offer the following characteristics: individualized portfolios, professional management and oversight, flexibility, transparency, diversification, tax efficiency1, and asset allocation, among others.
Q: What types of investors own separately managed accounts?
A: Each individual client has different needs that change over time. Your Financial Advisor can help you decide whether separately managed accounts are appropriate for you based on your current financial situation, investment objectives, time horizon, risk tolerance and other factors.
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Q: What's the difference between a single style and multiple style separately managed account?
A: A single style account usually requires a minimum investment of $100,000 and may be appropriate if you want to invest in a distinct equity, balanced or fixed income style, say, multi-cap or large-cap growth equities, or taxable and tax-exempt fixed income. A multi-style account usually requires a larger minimum investment (roughly $250,000) and is suitable for investors looking to participate in a number of different investment disciplines in a single account.
Q: What investment strategies are available?
A: Managed accounts are offered in a wide variety of asset classes and investment styles, including large cap, multi-cap, taxable and tax-exempt fixed income, international and value.
Q: What is the role of the Financial Advisor after a separately managed account is opened?
A: After the Financial Advisor helps you identify and select your investment options, he or she continues to be your primary relationship manager. Financial Advisors take on a consultative role with you by helping you work with the portfolio management team to discuss any changes in your situation and to help you determine whether your current investment strategy is appropriate. Your Financial Advisor also helps you evaluate investment performance.
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Q: How do I stay informed of my portfolio's performance?
A: Regular communication from your portfolio management team is an essential tool in keeping you and your Financial Advisor informed. Among the tools that are usually provided: quarterly performance reporting, monthly investment commentary, and online portfolio information.
Q: What is the difference between a separately managed account and a mutual fund?
A: Unlike an investor in a mutual fund, separately managed account holders own the individual securities in their accounts. Although investment managers oversee hundreds of accounts, as a separately managed account investor, your account is "separate" from that of any other investor, which, gives you the ability to direct the manager to customize the portfolio based on your personal and financial needs and goals. For example, you may request that the portfolio include or exclude a particular security or sector, or that some holdings be sold to produce capital gains or losses.
Q: What if I have special requests?
A: Managed accounts allow investors to impose reasonable stock, sector, or other preferences and restrictions on the management of their accounts. For example, if you own your employer's stock in your retirement savings plan, you and your Financial Advisor may decide not to invest additional assets in the company.
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Q: How much input do I have in the stocks that are chosen for my portfolio?
A: You and your Financial Advisor will want to have an initial consultation to discuss your specific objectives, risk tolerance, time horizon, and goals. Depending on the separately managed account you choose, you may have the ability to impose reasonable investment restrictions on the management of your account. Some separately managed accounts offer more flexibility than others, usually based on the amount you invest.
Q: What are the minimum investment requirements for separately managed accounts?
A: A single style separately managed account usually requires an investment minimum of $100,000 for equity accounts, and $250,000 for fixed income accounts. A multiple style separately managed account usually requires a larger minimum investment, generally $250,000.
Q: How do separately managed account fees work?
A: Investors generally pay one asset-based fee that includes ongoing advice; portfolio manager's fee; trading fees, and custody services for securities left in the account. Since all of the various separately managed account products are different, however, you should contact your Financial Advisor for more information. Ask your Financial Advisor for Form ADV Schedule H for more information about expenses and fees associated with any particular separately managed account. Please read it carefully before investing.
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Q: What is the Form ADV Schedule H?
A: A form that contains critical financial information about separately managed accounts' objectives and expenses.
Q: Are there risks associated with separately managed account investments?
A: Yes. All investments involve a certain amount of risk, including the possible loss of the principal amount invested, which varies depending on the security selected. Consult your Financial Advisor for more information about risks and to see if an SMA is an appropriate investment for you. |
