ESI is happy to announce that we have greatly expanded the number of separately managed accounts, SMA’s. Efforts were made to provide sufficient representation to asset class, market capitalization, investment style and management strategy.
Below are a list of SMA managers:
| Alliance Bernstein | Boston Partners | Columbia | Earnest Partners | Mondrian | Principal | Tom Johnson |
| Baird | Clearbridge / Legg Mason | Congress Asset Mgmt | Fidelity Advisor | Nuveen | QP Envestnet PMC | |
| BlackRock | Cohen & Steers | Davidson Asset Mgmt | Goldman Sachs | PIMCO | Redwood |
When do SMA’s fit for clients? Here are some additional details for your reference:
What are separately managed accounts?
Separately managed accounts, or SMAs, are portfolios of individual securities managed by a third-party asset manager.
What are the account minimums for SMAs?
The minimum account for the SMA’s is $150,000. However, minimums will vary by SMA manager, (e.g. $100,000 – $250,000).
What are the fees for SMAs?
There is a platform fee, (i.e. custody, trading, account administration and technology) which is determined by the size of the account and will decrease at various breakpoint levels. The platform fee begins at 34BPS for $150,000. The manager fee varies by manager and investment strategy. The fees can be reviewed on the Illuminations site.
Why would clients invest in SMAs?
- SMAs may be customized to meet the individual investor’s needs, goals, and principles. Securities may be excluded at a sector or individual company level at the client’s request.
- SMA’s offer a higher level of collaboration – through overlay strategies – to help ensure the portfolio aligns with goals, risk preferences, tax objectives and investment restrictions.
- SMA investors directly owns all securities in the account. That’s different from a mutual fund, which is a pool of securities that many investors jointly own.
- There is generally more transparency of the securities’ current value. Investors in an SMA can easily see the current value of their investments. The value of a separately managed account can be easily monitored daily. Clients receive regular, reporting, including the purchase and sales activity in the account. The account statements outline the securities owned, the number of shares, and many other details. All this information and communication leads to greater transparency and serves as the basis to better understand what clients own.
- Tax management by optimizing investment decisions – gain and loss management – around taxes on a year by year basis.
- SMAs are generally comprised of general securities which typically do not have internal expenses and may assess lower expenses than actively managed mutual funds.
- Time efficiency. SMAs are managed by 3rd party asset managers, which allows the advisor to focus on their client relationship goals and not on investment research and management responsibilities.
How do I learn more about SMAs through Illuminations?
ESI will be presenting a webinar on the expanded SMA’s and opportunity on July 13th at 2PM EST. CLICK HERE TO REGISTER.
The Illuminations website contains the manager specific information, (e.g. investment strategy, expenses, portfolio composition and performance history).
If you have questions or would like to pursue offering SMAs for your clients, please contact ESI Business Development at 800-344-7437.
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