Managed Account


Photo: Hanalei Valley, Hawaii, 2003 by Susan L. Kendall

What is a managed account?

There have never been more choices in the financial services arena. With literally thousands of mutual fund providers, it sometimes seems that there is just as many different ways to pay for services. If you are tired of trying to understand commission structures, contingent deferred sales charges, rights of accumulation, and the ever-increasing multitude of share classes, perhaps you should consider a managed account.

When you utilize a managed account, you pay your financial professional a management fee based on a percentage of the assets you invest. From a cost standpoint, the greatest advantage to this strategy is simplicity; you pay as you go. But there are many other advantages to managed accounts, including:

  • You sit on the same side of the investment table as your financial professional: "I prosper as you prosper; I suffer when you suffer."
  • You do not need to make an upfront load commitment in order to do business with the financial professional. Some investors prefer the pay-as-you-go approach.
  • You can terminate your relationship at any time without paying a closeout fee-based surrender charge.
  • You can purchase no-load, load-waived A shares and NAV funds.
  • You have virtually unlimited product options, including more than 5,000 mutual funds.
  • You will have the ability to rebalance your portfolio across different fund families.
  • You can give your financial professional discretion without any concern for churning or exposure to continuous commissions.
  • You can transfer existing positions into a fee-based account.
  • You have the ability to harvest tax losses.
  • You will receive enhanced quarterly investment progress reports and can potentially meet more frequently with your financial professional to review your portfolio and your financial goals.

" 'This time is different' are among the most costly four words in market history."
 ~ Sir John Templeton