What Is a Unified Managed Account?

For certain investors, a unified managed account (UMA) can help streamline investment management. It is professionally managed and can hold a variety of different investments. It can be a beneficial tool if you have a high net worth and substantial assets, but first, it is important to understand how it works.

A financial advisor can help you create a financial plan for your investing needs and goals.

Unified Managed Account Definition

In simple terms, a unified managed account combines several different investments, including these, into a single account:

• Mutual funds
• Exchange-traded funds (ETFs)
• Individual stocks and stock options
• Bonds
• Options
• Commodities
• ADRs
• Separately managed accounts (SMAs)

A separately managed account holds several investments belonging to a single investor. This account is managed on behalf of the investor using a single asset allocation strategy.

For example, you may hold a mix of stocks and bonds inside an SMA. This is similar to how a mutual fund works, except you aren’t pooling money with other investors.

The different investments, or sleeves, inside a UMA resemble a house’s structure. For example, the UMA is a roof over various investment rooms. Consequently, each room serves a different purpose.

The SMA typically has a single investment strategy or focus. However, a UMA incorporates multiple strategies across multiple individual investment positions.

Investing in a Unified Managed Account

Unified managed accounts are available from wealth managers and other financial institutions.

For instance, if you want to open one of these accounts, you first work with an advisor, wealth manager or portfolio manager to decide which assets you want to hold inside the UMA. Once you select your assets, they will be aggregated and collected into the unified managed account.

The next step is developing an investment strategy for managing UMA assets. However, this strategy differs for each investor who uses a UMA, as it depends on several unique features.

• Objectives
• Diversification needs
• Investment timeline
• Risk tolerance
• Risk capacity

Meanwhile, money managers also construct unified managed accounts with tax efficiency in mind.

UMAs are rebalanced frequently to keep the account’s asset allocation aligned with your needs and preferences. Strategic rebalancing keeps your comprehensive financial plan in focus.

Unified Managed Account Advantages

UMAs have several benefits that may appeal to investors.

First and foremost, they are a way to consolidate and streamline asset management. This is advantageous if you have a large portfolio covering a broad range of assets.

Instead of going from one account or investment to the next to track returns or performance, a UMA makes it easier to compare performance across different holdings side by side. Similarly, it becomes easier to compare how different investment strategies are performing in your portfolio, so you can determine where you need to adjust.

Unified managed accounts can also benefit you if your money manager’s strategy minimizes both tax efficiency and risk, while still achieving your target returns. It also simplifies year-end tax reporting and accounting, since there’s less paperwork to manage. You only receive a single Form 1099 to report gains across all of your investments. ¹

Regular rebalancing will help ensure that your total portfolio remains aligned with your goals over time.

Unified Managed Account vs. Other Account Types: How It Compares

It helps to compare UMAs to alternatives suitable for a high-net-worth investor.

UMA vs. Separately Managed Account

A separately managed account holds a single investment strategy that is managed on your behalf. It offers direct ownership of the underlying securities and is customizable for tax purposes.

However, it is built on a single approach. If you want exposure to large-cap equities, a fixed income strategy and an alternative investment allocation, you will need three separate SMAs, each with its own minimum, reporting and fee structure.

Instead, a UMA consolidates all these strategies into a single account. The manager oversees rebalancing and tax management across all sleeves simultaneously rather than treating each sleeve individually.

For investors with complex, multi-strategy portfolios, this coordination produces better tax outcomes and a cleaner view of total performance than managing multiple SMAs separately.

UMA vs. Traditional Brokerage Account

A traditional brokerage account gives you direct control over what you buy and sell, with no minimum beyond what individual securities require.

However, this flexibility comes with a tradeoff. You are responsible for coordinating across positions, harvesting losses, rebalancing and managing the tax implications of every transaction. Either you manage this yourself or you can work with a team of professionals.

In contrast, a UMA shifts that burden to a professional manager who handles it with your full financial picture in view. For an investor with $1 million or more spread across equities, bonds and alternative assets, the coordination a UMA provides is difficult to replicate through a self-directed brokerage account without significant time and expertise.

UMA vs. Multi-Account Wealth Management

Some high-net-worth investors work with multiple managers across multiple accounts. Each is responsible for a specific asset class or strategy.

This arrangement can provide access to specialized expertise but also creates fragmentation. Each manager optimizes their own sleeve without visibility into what the others are doing.

For example, tax-loss harvesting in one account may inadvertently trigger a wash sale in another. Rebalancing decisions made independently across accounts can push the total portfolio out of alignment with the investor’s actual target allocation.

A UMA addresses this by placing oversight of all sleeves under one roof. The overlay manager sees the full picture and makes decisions that account for interactions between strategies, rather than treating each in isolation.

For investors with complex portfolios, the centralized view is one of the primary reasons to consider a UMA.

Which Structure Fits Which Investor

A traditional brokerage account or a single SMA is sufficient for investors with straightforward portfolios and a single primary investment strategy.

An account can become more complex for several reasons.

• Multiple asset classes
• Tax considerations
• Alternative investments
• Multiple inherited accounts

Regardless of the reason, the coordination costs of managing separate structures increase.

A UMA becomes more compelling when coordination costs are high enough that a single managed structure yields better after-tax outcomes than handling investments independently.

Who Uses a Unified Managed Account?

There are a few considerations to help you determine whether a UMA is right for you.

• Higher account minimum requirements. For example, you may need $500,000 or $1 million in assets. By comparison, a separately managed account may have minimums closer to $50,000 or $100,000. If you’re not a high-net-worth investor, you may not need a unified managed account.
• UMA fees. Every UMA provider differs in fees. However, it’s typical to pay 1% to 1.5% annually for account management. Meanwhile, you may be able to minimize fees to some extent if your financial institution uses a sliding scale. That fee may decrease as your assets under management (AUM) increase.
• Portfolio management goals. If you have a very broad, diverse portfolio, a UMA can help. However, if you prefer a more hands-on approach, you may lose some control with a unified managed account.

Bottom Line

A unified managed account can be a good choice for high-net-worth investors. It can consolidate assets into a single account while maintaining individual investment strategies for those assets. When considering a UMA, pay close attention to the minimum investment requirement. Also, consider the overall track record of the money manager who will manage your account.

Investment Tips

• Consider talking to your financial advisor about the advantages and potential disadvantages of investing through a UMA. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• A unified managed account is just one tool you can use to create a financial legacy to pass on wealth. An estate plan can include provisions for investment accounts. As a result, it can divide your assets according to your wishes. That extends through your lifetime and beyond.

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