Thanksgiving is behind us, Hanukkah, Christmas and New Year’s Eve are just weeks away!Time flies when you are having fun! At my age, time flies by anyway – so much to do and so little time to do it. This is an on-going concern of my clients as well. Gone are the heydays of the tech boom where you put your assets to be invested into XYZ tech stock and by the end of the week, your investment may have doubled if not more (or less)!The future clients I meet want to know how I am going to pick the investment, be it stocks, bonds or other investment vehicles. We talk about time tables, tolerance for risk and their financial plan as well as college education for their children and retirement planning for themselves, just to name a few. The majority of my clients are introduced to managed account portfolios, where through a detailed questionnaire we select the right investment together.Why this route versus the chimpanzee, or myself, throwing a dart at the Wall Street Journal? Professional ongoing management of the accounts is the primary reason. If I were to get hit by a truck or take a two week vacation to go SCUBA diving, the managers are still there working on your behalf.Managed accounts are an investment portfolio directed by a professional money manager. Two key features make managed accounts different and potentially attractive to investors:
- Customized: The portfolios are customized to the individual investor, taking into account their risk tolerance, investment time horizon and other investment holdings.
- Private: Equities are held in your own investment account, in your name, and are not pooled with other investors. This means that the cost basis and transactions in your account are yours alone, and cannot be impacted by the actions of others. Tax efficiency and visibility to holdings are both significant motivations for looking at managed accounts. Traditionally, managed accounts have required a direct relationship with a money management firm, as well as a very large minimum investment — $1,000,000 is not uncommon for money managers. However, now we are able to offer managed account programs with more reasonable account minimums, and with a rich menu of available money managers that span a variety of disciplines and investment areas of focus.
