Managed Account

A fee-based investment management product for High Net Worth Individuals

Managed accounts are individually tailored investments designed to meet the specific objectives and needs of today's sophisticated investors.

A managed account allows investment in a diversified portfolio or a specific strategy run by an asset manager. Unlike a mutual fund, the assets are owned directly by the investor and managed by a professional asset manager.

The assets stay on the investor's account, generally in a custody account, where the financial assets are kept safely.

The asset manager receives a proxy to act in respect of the custody account, but has no power to transfer money out of it without the approval of the investor.

The asset manager passes orders to the custodian bank which then buys and sells financial instruments in accordance with the instructions received.

Which type of assets?

Virtually any types of assets may be managed under a managed account, such as:

Bonds, shares, trading of securities
Derivatives such as futures, options, CFDs, etc
Currencies, forex
Commodities such as gold, cotton, sugar, precious metals
Mutual funds, hedge funds, funds of funds

Recently the trend also includes:

Private equities, investments in private companies
Art collections, wines, classic cars and jewellery

Advantages of managed accounts

When compared to mutual funds (where the assets are managed by a fund manager on behalf of several mutual-fund holders), they are:

Personalised investment portfolios tailored to the specific needs of the account holder
Security that the assets are kept safe and segregated at the investor's custodian bank
Cost efficiency
Greater transparency in respect of the assets, types of deal, costs and fees charged on the operations
Access to the manager's policy
Control of the risk
Facility to consolidate the positions with other accounts