Whether separately managed accounts are ultimately a product or a process, they ultimately require convincing the client to sign on the dotted line. In fact, SMA clients have to sign on many dotted lines. And as with any sales process, financial advisers find a variety of ways to persuade their clients to pick up that pen.

On one side stands a group of advisers and marketers who describe separately managed accounts as a kind of new and improved mutual fund. Jerry Wade of Wade Financial Management in Minneapolis might be said to be in that camp. He says that lately, his team often explains the advantages of SMAs by talking first about the shortcomings of America's favorite investment vehicle.

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