Managed accounts are individual investment accounts offered by financial consultants who provide advisory services and managed by independent money managers using an asset-based fee structure.

A managed account investment program combines several services in a customized solution to investing. These services include investment planning, policy development, manager search and selection, portfolio management, performance measurement and trade execution. All of these valuable services are wrapped together into a comprehensive investment program. Rather than paying separately for these services, investors using a managed account pay a single fee.

In a managed account, everyone shares a common objective-to see that the investors’ portfolio grows in value.

Managed Account Investment Process

To provide this customized service, financial consultants:

• Develop a sophisticated analysis of the client’s financial needs
• Determine appropriate investment objectives
• Select and monitor independent professionals who will manage the client’s funds according to specific disciplines and styles to reach the client’s financial objectives

MMI’s Separately Managed Accounts Operations Communications and Data Standards describes, diagrams and defines a standard set of operating and communications process flows and message specifications for the Managed Accounts industry. This document will serve as the SMA industry repository for current and future standards. The MMI Standards are copyrighted to the Money Management Institute; however, MMI imposes no license fees for use of its data standards and makes its standards available for industry use without charge.

Managed Account Benefits

• A customized investment approach to reach specific financial objectives
• An asset-based, rather than a commission-based, fee structure. One fee includes investment counseling, portfolio management, brokerage fees, and ongoing account administration.
• Investments are managed for tax efficiency (i.e. the portfolio manager will structure the portfolio and time the transactions to mitigate the tax impact while maximizing performance in line with the investor’s goals.)
• Investor’s ability to make specific portfolio requests, such as tax-related trading, avoidance of specific stocks, etc.

The Money Management Institute was created in 1997 to serve as a forum for the managed account industry’s leaders to address common concerns, discuss industry issues, work together to better serve investors and coordinate with public policy makers.