by Jana Swenson
In today’s society, it is difficult to find the time necessary to do everything we’d like to accomplish. Between working, raising families, volunteering, and extracurricular activities, it is often impossible to tackle every item on the daily “to do” list. For high net worth individuals, finding the time to monitor market conditions, research investments, and manage the day-to-day activity of their portfolio can be overwhelming. Investors facing this dilemma may find it beneficial to utilize a professionally managed account.
A professionally managed account can provide individual investors with access to respected and successful investment firms with some of the world’s top managers. These highly trained investment specialists often have extensive experience in developing and monitoring portfolios that are customized for individual investment goals.
In some professionally managed accounts, securities are held in individual accounts, offering direct ownership of companies. This allows investors to have an individual cost basis on the securities in their portfolio. Others may incorporate a portfolio of strategically selected mutual funds.
Many investors like the fact that managed accounts are fee-based versus commission driven. By having an asset-based fee structure, the investor knows in advance the cost of services, and pays no commissions for trading in the account, regardless of how often the portfolio manager may find it necessary to make proper adjustments to security selections within the portfolio. Another potential benefit of professionally managed accounts is that tax gains and losses can be actively managed. The investor pays only on capital gains actually earned.
While a professionally managed account cannot guarantee a profit or protect against loss, utilizing the services of a professional money manager may help investors focus on their long-term goals — while allowing them to turn over time-consuming portfolio analysis to a professional. Professionally managed accounts have become popular in recent years due to their combination of tax efficiency, flexibility, and the opportunity to work with leading institutional-quality money managers. To find out if a managed account is right for you, contact your financial advisor today.
Jana Swenson is a Vice President/Investments with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, and can be reached by calling the firm’s Murrieta, California office at (951) 461-7220 or toll-free at (866) 894-2461.