Investment professionals can utilize specialized Separately Managed Accounts (SMAs) as a way to mitigate the risk of their clients. SMAs can be customized by investing in certain securities or certain strategies. They may, for example, wish to screen for equities or fixed income and invest according to a selective or opportunistic strategy.
Investment professionals can also leverage SMAs to provide access to other asset classes and fulfill objectives not traditionally served by mutual funds or exchange traded funds (ETFs). SMA portfolios can provide exposure to the same risk premiums targeted by alternative investments such as private equity or commodities that broaden the scope of diversification. Meanwhile, SMA strategies may be utilized for a variety of purposes, such as providing retirement income, protecting against inflation, and as a hedge against volatile markets or market sectors.
SMAs also provide an option for financial professionals to give clients a more interactive illustration of their financial situation. With the power of technology, clients can access their portfolios and have input on their allocations, and even change their tax hedging strategies and investment preferences. Savvy advisors can utilize SMAs as illustration and probing tools by walking their clients through their portfolio and advising them on their allocation and how this portfolio fits in with their overall financial plan.
An SMA is a great way to help achieve goals such as retirement, education or other savings goals.
But more importantly, SMA strategies can be utilized to serve a specific purpose in a client’s financial plan. An SMA is a great way to help achieve goals such as retirement, education or other savings goals. Through various portfolio allocation strategies, interactive user interfaces and quantitative methodologies, advisors now have the power to utilize SMAs to not only simplify the portfolio allocation process but to better help their clients and better educate them along the way.
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4Thought utilizes separately managed accounts that have a unique low-cost , high-impact investment methodology? Financial Professionals can access a potentially more effective risk mitigation approach for their clients.