What is Separately Managed Account?

Separately managed account (SMA) is an individual managed investment account where the portfolio is managed in accordance with a mandated investment strategy.

All investors in the investment strategy have their portfolio invested in the same way. Investment decisions are made by an investment manager and executed on behalf of all investors by the managed account operator.

A separately managed account is offered typically by a brokerage firm through one of their brokers or financial consultants and managed by independent investment management firms (often called money managers for short) and have varying fee structures. With such a broad definition, many types of accounts might fit the definition of an SMA.

There is no official designation for the SMA but there are common characteristics that are represented in all SMA programs. These characteristics include an open structure or flexible investment security choices; multiple money managers; and a customized investment portfolio formulated for a client's specific investment objectives or desired restrictions.




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