Unified Managed Household Account (UMHA)

What is a Unified Managed Household Account?

A unified managed household account (UMHA) is a privately managed account that consolidates multiple unaffiliated products including mutual funds, ETFs, and individual securities. The account allows immediate family members, such as parents and children, to access the account. This type of account allows for ease of administration for the financial institution and greater transparency for the investing family.

Understanding Unified Managed Household Accounts (UMHA)

Unified managed household accounts (UMHAs) operate on a single, integrated system, which allows a financial advisor to view various assets and product types to create performance reports. This holistic view also will enable financial advisors to customize investment decisions for each client in the context of their household and to simplify operational procedures that are typically complex and cumbersome. In some UMHA programs, clients can create account groups for each investment goal. The system supports groupings with individual performance reports, billing and statements.

Since this account offers complete transparency, family members can gain a deeper understanding of their assets. Meanwhile, asset management firms can designate a central relationship manager for large families that have accounts located in different parts of the business. Unified managed household accounts (UMHAs) can streamline paperwork, simplify fees and allow for more sophisticated tax management.

Considerations for a UMHA

Consumers should be aware of several factors when consolidating accounts into a UMHA. Often, UMHAs are discretionary programs, meaning the financial advisor has the authority to make investing decisions. As with mutual-fund advisory programs, the investor selects a model based on risk tolerance and goals, and the firm takes care of rebalancing or even changing asset allocations altogether, depending on the degree of discretion inherent in a particular program. Therefore, a UMHA's performance will depend largely on the company's success in selecting securities and making adjustments to the allocation. Investors should be selective when choosing the firm that will manage their UMHA.

That said, because of the transparency and simplicity of having all securities under one roof, investors have an opportunity to earn better risk-adjusted and tax-managed returns due to comprehensive oversight, execution, and reporting.  They may also save on fees that are typically charged for each account. Fee discounts may be available based on your household’s assets under management.

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