Unified Managed Account (UMA)
What Is a Unified Managed Account?
A unified managed account (UMA) is an expertly managed private investment account that can remember various types of investments for a single account. Investments might incorporate mutual funds, stocks, bonds, and exchange-traded funds. Unified managed accounts are frequently rebalanced on a predefined schedule.
Figuring out Unified Managed Account (UMA)
The unified managed account is a rare example of options a high net worth investor has for dealing with their assets. The unified managed account is a development of the separately managed account, which is comparable in that an expertly managed account is rebalanced frequently. Nonetheless, separately managed accounts are commonly not known for pooling numerous investments and investment vehicles with differing objectives. Separately managed accounts are a high net worth investment alternative, for the most part offered by an investment manager, that normally centers around a targeted strategy managed as a separate account for the investor. To invest across different strategies, they would probably need to open various separately managed accounts.
A unified managed account is many times a better alternative for an investor seeking to join various investments. The UMA eliminates the need to have more than one account and can join an investor's all's assets into one account.
UMA investors pay annual management fees in light of the total assets under management (AUM); fees drop as the AUM rise.
Investing Through a Unified Managed Account
Similar banks and brokerage firms normally offer unified managed accounts as separately managed accounts. Their offering has likewise expanded to incorporate registered investment advisors and private wealth managers. Technology has been a driving factor supporting their expansion. A unified managed account provider has a lot greater overall fiduciary responsibility since they act as the manager for a large number of investments, which can incorporate stock positions, employee stock option plans, outsider separate account management, and that's only the tip of the iceberg.
UMA providers work with high net worth investors to incorporate a client's all's assets. When the assets have been collected, an UMA provider will work with the client in a number of ways. The UMA provider can look at the total portfolio for a complete plan. UMA account planning can incorporate an overlay strategy that tries to deal with the portfolio from a targeted asset allocation diversification approach. UMA providers likewise offer investors new options with affiliated companies and products that an investor might need to invest in after some time. Frequently an UMA provider will dissect the portfolio to adjust with modern portfolio theory given the far reaching, efficient frontier for which the combined assets make. An UMA provider's alternative options might assist a client with adjusting their total portfolio for risk-return optimization better.
UMA providers additionally offer high net worth clients more streamlined reporting on their investments with greater support for extensive tax planning. UMA providers likewise work with clients to decide a rebalancing schedule that fits their overall investing strategy.
UMA standards differ by provider, and investors will regularly consent to an arrangement itemizing the management of the account, its fees, and its suitable investments and organizing. UMA investors normally pay annual management fees in view of total assets under management. Fees normally decline with greater assets under management and can go from 1.50% annually to 3%.
Highlights
- An UMA is commonly rebalanced on a normal schedule, ensuring the holdings mirror the right balance of investments.
- A unified managed account (UMA) is a privately-managed investment account that can incorporate different investments, like mutual funds, stock, and bonds.
- UMA providers work with investors to design an integrated portfolio that incorporates different investments, offer help for tax planning, and make an effective rebalancing schedule.
- It's a type of account frequently preferred by high net worth investors who need a greater scope of investments than what they can get with a separately managed account.
