Separately managed accounts’ claim that they pick only the cream of the crop to manage investors’ money appears to have dogged it in the fourth quarter, The Wall Street Journal reports. Disappointed in less-than-stellar returns, investors withdrew assets from SMA accounts held at brokerage firms at a far more rapid pace than they did from mutual funds.

Investors redeemed about 4% of SMA assets held in these accounts, versus only 1.2% of mutual funds.

When selling investors on SMAs, said Cerulli Analyst Emily Tillman,“The story of the investment manager is usually a large part of the sale. When performance lags, products and managers who were sold on performance tend to suffer the most.”

On the other hand, brokers selling investors on mutual funds tend to emphasize an array of choices to create the right asset allocation and balance to meet their investment goals.

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