What is a Separately Managed Account (SMA)
A Separately Managed Account (SMA) is a professionally managed investment account tailored to the specific financial goals and preferences of an individual investor or institution. Unlike pooled funds such as mutual funds, SMAs offer direct ownership of assets, allowing for greater customization, transparency, and tax efficiency. Investors can collaborate with financial advisors to create a strategy aligned with their risk tolerance, time horizon, and unique investment objectives. SMAs provide flexibility and control, making them a popular choice for high-net-worth individuals and institutions looking for bespoke investment solutions.
Why SMAs are important
SMAs are significant for investors who prioritize personalized service and strategic flexibility. They offer advantages such as eliminating fund-level tax implications, customizing portfolios to align with ethical or social considerations, and maintaining full transparency in asset selection. For family offices, SMAs provide an effective means of managing diverse financial needs and aligning investments with long-term wealth preservation goals.
