Along with turnkey asset management programs, which allow advisers to outsource functions such as manager research, portfolio construction and performance reporting in order to gain operational and cost efficiencies, unified managed accounts are gaining popularity.
The way a UMA works is this: A financial adviser outsources their investment strategies for their client’s portfolio to a technological platform, which provides the open architecture to allocate assets across all financial asset classes and to regularly rebalance.
Through these programs, there is automatic diversification so advisers don’t have to worry about asset-reallocation, and both the adviser and the client are able to monitor the account in real time. Other benefits: the UMAs offer a wider choice of asset managers. Efficiencies help keep costs down for client and adviser. And advisers like the transparency the UMAs offer “because they can gain complete visibility on all their client's financial assets,” according to Celent.
Not all overlay technologies have proven themselves equal, though. Technologies have improved, which have allowed UMAs to be used with more mass-affluent clients, but they still have room to improve even more.
Tom Steinberger, a senior vice president at
“That’s the next evolution of our business,” he said during a recent discussion at the
This is especially important for high-net-worth clients who tend to have many advisers who do not talk to one another. “We’ll continue to see this technology evolve further,” Steinberger said.
