What is a 'Unified Managed Household Account - UMHA'

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.

BREAKING DOWN 'Unified Managed Household Account - 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.

RELATED TERMS
  1. Household Income

    Household income is the combined gross income of all people occupying ...
  2. Accounting

    Accounting is the systematic and comprehensive recording of financial ...
  3. Managed Money

    Managed money is a means of investment whereby investors rely ...
  4. Account Aggregation

    Account aggregation is a process by which accounts are linked ...
  5. Manager of Managers - MoM

    A manager of managers (MoM) approach is a type of oversight investment ...
  6. Member of Household

    A member of household may be considered as such if the individual ...
Related Articles
  1. Financial Advisor

    How to Help Clients with Cash Flow Issues

    Sometimes your spending gets out of hand or income has a hiccup. Here's how financial advisors can help clients who have cash flow issues.
  2. Insights

    The 10 Best Cities for Financial Advisors

    If you're an advisor looking for a promising location to practice, consider the combination of high wealth and low market penetration of these locales.
  3. Financial Advisor

    Household Net Worth For Americans Rose In 2015

    Even as household net worth for American households rose in 2015, it failed to translate into economic growth.
  4. Investing

    The Value of Asset Location

    Often overlooked, asset location can create tax efficiency and enhance portfolio returns.
  5. Tech

    How Technology Has Revolutionized Asset Management

    Technology has had a dramatic impact on the asset management industry over the past decade, from more sophisticated strategies and products, to lower fees.
  6. IPF - Broker

    Fidelity vs T. Rowe Price

    Fidelity offers a broad menu of services for banking, investment and trading while T.Rowe Price focuses on long-term investment.
  7. Personal Finance

    The 6 Different Types of Checking Accounts

    Know exactly what you are getting before you open an account with this guide to checking account options.
  8. Personal Finance

    Run Your Family Finances Like a Business

    By using the techniques employed by thriving corporations, your family can be more successful.
  9. Insights

    Fears of Another Recession are Unfounded

    Past recessions have often erupted because people had outspent their incomes, incurred excessive debts, and had to cut back. So far in this recovery, people have shown none of this behavior. ...
  10. Managing Wealth

    Americans Are Getting Richer...Kind Of

    Americans are getting richer – the number of affluent households is growing – but the rate is slower now than it was before the Great Recession.
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