A managed account is a personalized investment portfolio managed by a professional manager, authorized to make all transaction decisions for the investor’s account in accordance with specific goals and objectives. Managed accounts are intended solely to meet the needs of the individual investor and can have specific goals such as growth or income. There are three basic types of managed accounts, and they are available to a broader range of customers. Financial advisors may suggest managed accounts, and investors can research and select companies that offer the most personalized service at the lowest fees.
A managed account is a personally customized investment portfolio that is managed by a professional manager. When an investor has a managed account, they grant the investment manager the authority to buy and sell securities for the account, without the need to seek permission. Essentially, the manager is authorized to make all transaction decisions for the investor’s account in accordance with specific goals and objectives.
Unlike other types of investment accounts, a managed account is intended solely to meet the needs of the individual investor, rather than a group of investors. For example, a mutual fund might pool the assets of thousands of clients, while a managed account consists of the assets of a single investor. The owner of a managed account can be an individual or an organization.
Each managed account has specific goals. For example, an individual may choose to invest for growth, income, or a combination of both. A managed account holder has the freedom to customize their portfolio by selecting a particular stock or bond or choosing to omit one.
There are three basic types of managed accounts. The standard managed account is managed by a professional investment manager. Multi-discipline managed accounts are managed by a group of managers, each with a different specialty, and provide a greater level of investment diversity. Managed mutual fund accounts invest in multiple mutual funds rather than individual securities.
In the past, managed accounts were generally only available to the very wealthy. Today, however, they have a broader range of customers. Although some professional managers choose to set minimum investment amounts of a million dollars or more, many are willing to manage accounts with minimum investments as low as $50,000.
Often an investor will choose to seek the help of a financial advisor. It is the job of the financial advisor to understand the investor’s goals and help develop a plan to achieve them. Often it is the financial adviser who suggests that the client open a managed account. Sometimes an advisor may even suggest a client purchase more than one managed account.
There are a large number of companies that offer managed accounts. Each company has something different to offer in terms of investment philosophy, reputation, and level of service. With so many companies to choose from, investors are free to research and select the companies that offer the most personalized service at the lowest fees.
Smart Asset.
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