What Is A Managed Account Agreement

The financial scandals and the market crash in 2008 served as a catalyst for hedge fund investors to move to SMEs. [4] As such, the ADM is evolving to accommodate the expected demand of investors in such structures. The single managed account is an example of improving the structure of the ADM, as it links multiple managers and strategies to a single investor-controlled account. The configuration of the managed single account allows any mix of managers selected by the investor to be more effective in terms of capital and operation than the same mix would have been structured within an ADM or fund structure. In the investment management sector, a separately managed account (SMA) is one of the different types of investment accounts. An ADM can be an individual.B investment account. These are often offered by a brokerage firm through one of its brokers or financial advisors and are managed by independent investment management companies (in short called money managers); they have different pricing structures. These particular types of SMAS can be called « Wrap Fee » or « Double Contract » depending on the structure. [1] There is no official name for ADM, but there are common characteristics that are represented in many types of ADM programs.

These features include an open structure or flexible options for investment security; Several fund managers and a customized portfolio of assets, formulated for specific investment objectives or restrictions desired by a client. Managed accounts were launched as separately managed accounts and have since become several strategic accounts (ASMs) and unified management accounts (UMAs) that quickly established themselves. There is broad consensus that managed accounts offer additional benefits in terms of transparency, liquidity and control. [3] The term « SMA » is used primarily in the U.S. brokerage industry for such agreements in which a portfolio management resource account is managed within the company, or more often by an external fund management company (Investment Advisory) and a director. In this context, an ADM can be considered an investment vehicle similar to an investment fund in which the client pays a fee to a money manager for his services that manage the client`s investment. The important difference is that an investment fund investor holds shares in a company that holds other interests, while an ADM investor directly owns the assets invested in his own name.