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# More investors letting pros handle things
- URL: https://www.smdp.com/more-investors-letting-pros-handle-things/
- Published: 2006-05-25T15:00:00.000Z
- Updated: 2026-10-23T18:01:01.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By MIND YOUR BUSINESS BY KIRK G. AGUER*

It seemed that all anyone needed was a modem and a point of view just a few short years ago, when the stock market was reaching all time highs and stock valuations were out of whack. Alas, valuations were recalibrated. Investors are abandoning the self-directed approach to investing in favor of a more disciplined investing strategy. In fact, the total volume of online trades fell to 50.6 million by mid-2001, from a high of 82.3 million in mid-2000, a decline of 39 percent.

What’s next? Many investors are turning to customized professional money management. Until recently, professional portfolio management was reserved only for institutional investors and the super-wealthy. Now, with $100,000 or more to invest, you can gain access to the talents that have managed the wealth of Fortune 500 CEOs and endowment and foundation boards.

WHAT IS A SEPARATELY MANAGED ACCOUNT?

A separately managed account (SMA) is a professionally-managed private portfolio of stocks and bonds that you own. This portfolio is actively managed and guided by a seasoned investment manager.

SMAs offer investors a process-oriented approach to investing, rather than a product sale. The process begins with a financial advisor assessing your financial needs and goals. Your advisor then recommends a portfolio strategy cus-tomized to meet your needs. Once you agree with the strategy, a professional portfolio manager buys and sells stocks and bonds in your portfolio on your behalf. Your portfolio’s performance is systematically monitored by your financial advisor. The SMA service is an ongoing process that enables you to monitor the health of your portfolio and adjusts it accordingly, all with the guidance of your financial advisor.

THE SMA ADVANTAGE Above all, a separately managed account enables you to own a portfolio customized for your changing and longer-term needs. Your stocks and bonds are managed, and monitored, by investment specialists.

If you are looking to grow wealth in a disciplined fashion, SMAs provide: ■ Access to expert money management talent. Minimums are usually between $100,000 and $300,000\. ■ Customization. A portfolio tailored to meet your long-and short-term cash needs. The customization process also enables you to indicate stocks you do not want held in the account for personal, social or environmental reasons. ■ Direct ownership of stocks and bonds. A separately managed account enables you, the investor, to own outright a managed portfolio of stocks and bonds. ■ Tax efficiency. Outright ownership of your securities means you can harvest capital gains and losses as you see fit for tax management purposes. ■ Account transparency. There are no hidden fees. You do not incur transaction costs from the regular sale and purchase of stocks and bonds in the account. The fee is a prenegotiated percentage of your portfolio balance, so the portfolio manager’s and your incentives are directly aligned. The fee is incurred quarterly. ■ Comprehensive reporting. Your financial advisor regularly monitors the portfolio. You receive a detailed quarterly report of your account balance, asset allocation, and all the activities in the account during the period.

THE BROADER FIT Whether you are seeking to generate income or preserve your current lifestyle in retirement, a separately managed account enables you to better handle the wealth management process. Across the financial industry, the SMA is considered the “next generation” of investments for the individual investor. It offers you access to the professional money management coupled with on-going guidance from your financial advisor. The SMA service is available for your taxable portfolio, 401(k) rollover, IRA and trust assets. (Kirk Aguer is a financial advisor at Morgan Stanley. To reach him, call him at his Santa Monica office at (310) 319-5220.)

*Originally published in the Santa Monica Daily Press print edition on May 25, 2006.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/052506.pdf?ref=smdp.com)