• Government
• Profession
• Business
• Opinion
• Health

• Health reform
• H1N1
• P4P
• EMRs
• Medicare
• Liability
• AMA House
• » More

• Book Excerpt
• Business Pitch
• Meetings
• » More

• Contract Language
• Ethics Forum
• In the Courts
• Practice Management
• Technically Speaking
• » More

• Issue dates
• Regions
• Health plans
• Sections
• News briefs
• Columns
• Editorials
• Letters
• Writers
• Other years

• Search tips
• E-mail alert
• Radio
• RSS
• Mobile
• Subscribe
• Institutions
• Staff directory
• Advertising
• Permissions
• Reprints
• News media
• Site guide
• Useful links
• About
• Premium
• Contact

Investment vehicle offers customized portfolio

Personal Finance. By Katherine Vogt, amednews staff. May 9, 2005.

• PRINT|
• E-MAIL|
• RESPOND|
• REPRINTS|
• SHARE

Until recently, only the uberelite were given keys to an investment vehicle known as a separately managed account. With these, the superwealthy essentially had customized securities accounts maintained under the careful eye of a trained professional.

But in the past few years, more and more investment firms have begun offering separately managed accounts to clients with fewer assets. The result has been a surge in the popularity of these accounts among everyday investors like physicians.

"More and more, separately managed accounts are becoming today what mutual funds were 10 years ago," said Sean Clark, chief investment officer of Clark Capital Management Group Inc., a Philadelphia-based wealth management firm. "They're in people's vocabularies, and most investors have enough assets to get into a managed account program."

The numbers paint a dramatic picture: Assets under management in such accounts grew by 15.9% in 2004 to reach $576 billion, according to the Money Management Institute, a trade organization. By 2008, the institute projects the accounts will hold $1.3 trillion in assets.

The accounts are touted for their transparency, tax efficiency, customization and costs. But skeptics remain unconvinced that separately managed accounts offer much in the way of savings or other advantages over similar investment vehicles like mutual funds or exchange-traded funds, which are like a hybrid of a mutual fund and a stock.

Still, they have unique properties that might attract some folks. They essentially function as an individual investment account, managed by a professional and customized to fit the investor's needs or objectives. The manager may choose most of the stocks and bonds held in the account, but does so in a way that aligns with the investor's wishes and strategy.