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.