What is a 'Unified Managed Account - UMA'

A unified managed account (UMA) is a professionally managed private investment account that can include multiple types of investments all in a single account. Investments may include mutual funds, stocks, bonds and exchange traded funds. Unified managed accounts are often rebalanced on a specified schedule.

BREAKING DOWN 'Unified Managed Account - UMA'

The unified managed account is one of a few options a high net worth investor has for managing their assets. The unified managed account is an evolution of the separately managed account, which is similar in that it is a professionally managed account which is rebalanced often. However, separately managed accounts are typically not known for pooling multiple investments and investment vehicles with varying objectives. Separately managed accounts are a high net worth investment alternative, usually offered by an investment manager, that typically focuses on a targeted strategy managed as a separate account for the investor. If an investor wanted to invest across multiple strategies they would likely have to open multiple separately managed accounts.

A unified managed account is often a better alternative for an investor seeking to combine multiple investments. The UMA removes the need to have more than one account and can combine all of an investor’s assets into one account.

Investing through a Unified Managed Account

Unified managed accounts are typically offered by the same banks and brokerage firms as separately managed accounts. Their offering has also broadened to include registered investment advisors and private wealth managers. Technology has been a driving factor supporting their expansion. A unified managed account provider has a much greater overall fiduciary responsibility since they serve as the overseer for a multitude of investments which can include stock positions, employee stock option plans, third party separate account management and more.

UMA providers work with high net worth investors to integrate all of a client’s assets. Once the assets have been aggregated a UMA provider will work with the client in a number of ways. The UMA provider can examine the total portfolio for a comprehensive plan. UMA account planning can include an overlay strategy that seeks to manage the portfolio from a targeted asset allocation diversification approach. UMA providers also offer investors new options with affiliated companies and products that an investor may want to invest in over time. Often a UMA provider will analyze the portfolio to conform with modern portfolio theory given the comprehensive efficient frontier for which the combined assets create. A UMA provider's alternative options may help a client to better align their total portfolio for risk-return optimization.

UMA providers also offer high net worth clients more streamlined reporting on their investments with greater support for comprehensive tax planning. UMA providers also work with clients to determine a rebalancing schedule that fits their overall investing strategy.

UMA standards vary by provider and investors will typically sign an agreement detailing the management of the account, its fees, and its allowable investments and structuring. UMA investors typically pay annual management fees based on total assets under management. Fees usually decrease with greater assets under management and can range from 1.50% annually to 0.30%.

RELATED TERMS
  1. Advisor Account

    An advisor account is an investment account where investment ...
  2. Money Manager

    A money manager is a person or financial firm that manages the ...
  3. Account Activity

    Account activity generically applies to whenever a movement of ...
  4. Funds Management

    Funds management is the management of a financial institution's ...
  5. Due From Account

    A due from account refers to an asset account in the general ...
  6. Multiple Managers

    Multiple managers refers to the multiple involvement of different ...
Related Articles
  1. Investing

    Separately managed accounts: A mutual fund alternative

    It takes a hefty minimum investment to get in on an SMA, but these offer some distinct advantages.
  2. Financial Advisor

    Preparing for a Career as a Portfolio Manager

    Find out what it takes to win a spot in one of the most coveted financial careers, portfolio manager.
  3. Trading

    Forex Basics: Setting Up An Account

    The line between profitable forex trading and ending up in the red may be as simple as choosing the right account.
  4. Investing

    Wrap It Up: Terms and Benefits of Managed Money

    Read here to find out if you should have your money managed by professionals.
  5. Managing Wealth

    Asset Manager Ethics: Acting In the Benefit of Clients

    Investment managers should always act to benefit the client. Learn what actions managers should take on a client's behalf.
  6. Personal Finance

    Private banking versus wealth management

    Discover the various ways in which private banking and wealth management services coincide, as well as the significant differences between them.
  7. Investing

    A Day In The Life Of An Accountant

    An analysis of the accountant profession, who becomes an accountant, what they do, where they work, and salary ranges.
  8. Small Business

    Best Checking Accounts For Small Businesses

    What you need to know to choose the best checking account for your small business – and where to look.
  9. Personal Finance

    Handling High-Yield Savings Accounts

    Is a high-yield savings account right for you? Read on to find out what they have to offer.
RELATED FAQS
  1. What types of accounts are available for forex trading?

    There are many different types of forex accounts available to the retail forex trader. Demo accounts are offered by forex ... Read Answer >>
Trading Center