Though still in its infancy, Smith Barney’s unified managed account has gathered more than $500 million in assets in just two-and-a-half months. The UMA, as it is referred to, allows reps to monitor a variety of structured products—separate accounts, exchange-traded funds and mutual funds—within one account, with one statement, thereby making it easier to explain to clients.
The UMA has been heralded as the next stage in the managed account arms race, designed to improve upon multi-style accounts and overlay management by putting more control of the investing process back in the hands of financial advisors.
And while these accounts, at this time, do not include individual equities or fixed-income instruments, Smith Barney Consulting Group director Norman Nabham says coming versions should be able to include those types of products as well. The different types of products in the UMA are limited to about 400—the funds and managers included are researched first before being approved to the program.
The UMA technology has the ability to handle tax-related issues that come with managers that have duplicate positions. However, what many in the industry viewed as a problem in previous years—managers doing things that are potentially at odds with each other (say, selling GE while another buys it)—isn’t necessarily an issue, according to Glenn Regan, head of research for Smith Barney’s consulting group. Leaving aside tax concerns, Regan says that the firm has a “different philosophy,” saying that there’s nothing necessarily wrong with managers who own the same stock. “It’s not about one stock, one sector.”