Managed accounts are personalized investment portfolios tailored to your individual needs. This portfolio of securities is entrusted to a professional money manager who will manage your portfolio to meet your specific objectives and needs. In the past, this level of customization was only available to large institutional clients.

Comparing Managed Accounts, Mutual Funds and Individual Stocks

There are many variables to consider when choosing between managed accounts, mutual funds or individual stocks. Managed accounts can provide some unique advantages that allow you to build a comprehensive, customized solution for your investment needs.

Is a Managed Account Right for You?

Many factors go into deciding if a managed account is the right decision for you. Depending on your long-term goals and your current financial situation, the right solution will be the one that best fits your financial plan. Managed accounts may be appropriate for investors who have:

  • Significant investable assets
  • Need for personalized advice
  • A unique portfolio
  • Tax concerns
  • Long-term investment goals
  • Customization requirements

The following chart outlines some of the key differences and similarities between managed accounts, mutual funds and individual stocks.

 

Managed accounts

Mutual funds

Individual stocks (Outside a managed account)

Access to Professional Money Managers

Yes

Yes

No

Diversification

Diversified portfolio of securities

Diversified portfolio of securities

Client and FA determine diversification strategy

Ownership

Clients own the securities purchased on their behalf by their manager

Clients own shares in a pool of securities

Clients own the securities they purchase

Cost Basis

Client cost basis for each security established at time of purchase – specific to client

Client buys existing portfolio – may potentially buy into unrealized capital gains/losses

Client cost basis for each security established at time of purchase – specific to client

Customization

Ability to restrict securities to meet client preferences

Customization generally not available at the portfolio level

Clients purchase individual stocks to build a customized portfolio

Gain/Loss Distribution

Managers can provide potential tax advantages by opportunistically taking gains and harvesting losses

Gains are distributed at year-end – losses cannot be distributed, but may be harvested to offset future gains

Ability to take gains and harvest losses as needed

Funding

Cash or existing securities

Cash

Cash or existing securities

Fees

Clients pay an asset-based fee

Multiple pricing structures are available including: asset-based fee, no load, front-end load and level load

Clients pay either commission for securities bought and sold or an asset-based fee

Expenses

No additional expenses

Internal management expenses vary from fund to fund

No additional expenses

Minimum investment

Typically $100,000 per manager for equity managers – may be higher for fixed income managers

Varies by fund company – may be as low as $250

No minimum

Investment transparency

Clients own specific security holdings in their account that can be readily viewed

Specific security holdings are reported quarterly

Clients own specific security holdings in their account that can be readily viewed

 

Many factors will go into your decision to build your investment portfolio. Work with a Farm Bureau advisor to help determine which solutions are right for you.

Source:
RBC Correspondent Services, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC, provides clearing and execution services for FBL Marketing Services, LLC.
The referenced product and/or service is made available through that relationship.
Non-deposit investment products: Not FDIC insured; Not bank guaranteed; May lose value
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Investors should consider the investment objectives, risks, and charges and expenses of a fund carefully before investing. Prospectuses containing this and other information about the fund are available by contacting your financial advisor. Please read the prospectuses carefully before investing to make sure the fund is appropriate for your goals and risk tolerance.