UMAs Power Wealth Management

Terry Flanagan

The Unified Management Account has become a staple of the wealth management industry because of its ability to use a single account for asset allocation, and access to multiple SMAs (separately managed accounts) and mutual fund sub-asset classes or styles (e.g., large-cap value).

Technology plays an important role in successful managed accounts and UMA businesses. “UMAs came into being about seven or eight years ago, the idea being to put everything into one account at a broker firm or custodian,” said Harry Clark, chairman and CEO of Clark Capital Management, which manages $2.8 billion. “With sleeve technology, you can pre-package programs for clients with various investment vehicles in the same account.”

Clark Capital Management has introduced the Personalized UMA (PUMA), which allows financial advisors to select the most appropriate individual strategies and combine them into a single account. It is designed to help financial advisors address the unique needs of their clients in a more scalable and efficient way.

Since 2007, the firm has offered Unified Managed Accounts (UMAs), combining multiple asset classes and strategies into one account. However, these UMAs, like other industry UMAs, are model-driven and limited in their customization capabilities.

“We offer pre-packaged UMAs, but until now you really couldn’t tailor them to the client’s exact needs,” said Clark. “Today’s client demands more versatility and customization, and we want to give advisors what they need to meet those expectations. It is absolutely essential to address scalability and simplicity when providing personalized services.”

According to a 2013 report by research firm Cerulli Associates, UMA assets garnered 7.7 percent of all managed account assets in 2012, double the 3.8 percent Cerulli recorded in 2008.

Argentus Capital Management said that six Newfound Research portfolios are now available through its AlphaNavigator Unified Managed Account Platform. This enables investors to invest directly in Newfound managed account solutions. “We are excited to partner with Newfound Research and bring their suite of portfolios to advisors across the RIA and broker-dealer spectrums,” said Doug Gill, CEO at Argentus Partners, in a release.

The Newfound portfolios offered through Argentus include risk managed global, income and equity long/short sectors, and 3% and 4% target excess yield.

The PUMA offers the ability to combine Clark Capital strategies into a single account, to adjust the portfolio to meet clients’ changing needs without repapering the account, and household level performance reporting.

Clark Capital’s portfolio consists of ETFs, individual stocks and bonds. ETF styles include sector vocation, style rotation, international, alternatives, and a global macro. Bonds include tax free bond portfolios, taxable bond portfolios, high yield and neutral duration. Individual stock portfolios, include all cap (small, mid and large), mid cap, small cap portfolios, ADRs and high dividend large cap portfolio.

The PUMA enables portfolio managers to combine their efforts in a highly targeted way. “We put these building blocks into unified managed accounts, so the rep can pick and choose what to put in the client’s personalized unified managed account,” Clark said. “We’ve been managing UMA assets for years from a risk standpoint; now we can deliver a truly client-centered strategy.”

Featured image via Roman Gorielov/ Dollar Photo Club


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