A Unified Approach

This article addresses the following key points: Traditional separate managed accounts (SMAs) can cause problems for clients who seek globally optimized portfolios and maximum tax efficiency. Money management firms that work with UMA (unified management account) overlay managers give up part of their fees in return for reduced portfolio administration. Overlay managers claim that UMA accounts will open the market for fully integrated portfolios to smaller investors who previously lacked the required assets for SMA minimums. UMAs are making inroads with regional and mid-sized brokerage firms. Industry observers say that larger financial institutions are also developing internally managed UMAs. Some CFA charterholders who work as private client wealth managers are skeptical that UMAs will have significant impact on their operations.