Managed accounts, a cornerstone product for big brokerages, are now also becoming increasingly popular at community banks, industry experts say. These accounts, also called separate or individually managed accounts, are portfolios created for wealthy customers. Such accounts, typically having assets of a few hundred thousand to a few million dollars, provide more flexibility and tax benefits than mutual funds, because they allow investors to own stocks directly. One indication of how popular the accounts have become is that Morningstar started rating them for the first time last year.
Citizens Banking Corp., of Flint, Mich., began offering separate accounts in November. "We're ramping up right now," said Jim Schmelter, an executive vice president at Citizens. "Our clients understand what the products are now, and there is strong demand." The $8 billion-asset banking company's separate account assets are now in the "low seven-figure range," Schmelter said. Eventually, Citizens would like to have all its eligible customers in such accounts.