Bank of America, the nations third-largest bank, announced on Monday the launch of a new product for financial advisers that will enable their high net worth clients to customize their portfolios.
The program, Consulting Service Portfolio Strategies, will be offered at $150,000 account minimums and distributed through the more than 1,150 financial advisors in Banc of America Investment Services. The move comes on the heels of decisions by other major banks including Citigroup and J.P. Morgan Chase to go after the mass affluent.
The product aims to capitalize on the growing popularity of multiple discipline accounts, which are separately managed accounts that enable investors to own outright individual securities picked by fund managers. Multiple discipline accounts offer better diversification than the traditional managed account with much less paperwork.
In addition, they allow the end client to harvest tax losses on a stocks or bonds that have fallen out of favor.
Among the money managers available to investors in the program are Marsico Capital Management, NorthRoad Capital Management, Fox Asset Management; and Eagle Asset Management, along with proprietary Banc of America Capital Management investment options.
"Portfolio Strategies provides the ease and simplicity of a single separately managed account, along with the investment diversification, potential tax advantages and rebalancing opportunities so needed by investors today," said Dan McNamara, managing director, Consulting Services Group, in a press release.
Bank of Americas program is comprised of seven portfolios with investment minimums ranging from $150,000 to $450,000 for each portfolio. Annual fees and expenses can cost anywhere from 0.85% to 3% of the total asset value depending on the size of the account.
The separately managed account business had $506.63 billion in assets under management at the end of 2003, according to the Money Management Institute. The industrys leading trade group estimates that number will grow to more than $1.1 trillion by 2007.