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InsightsNavigating Investment Management: A Comprehensive Look at SMA, UMA, and UMH for High-Net-Worth Families

March 14, 2024 • 3 MIN READ Author Avatar

Investment management plays a crucial role in preserving and growing wealth for high-net-worth families. With an array of options available, it’s essential to understand the nuances of different investment vehicles. In this blog post, we will delve into three distinct types of investment management: Separately Managed Accounts (SMA’s), Unified Managed Accounts (UMA), and Unified Managed Household (UMH). By examining their features and benefits, we will explore why Unified Managed Household stands out as an optimal choice for high-net-worth families.

Separately Managed Accounts (SMA’s)

Separately Managed Accounts (SMA’s) are individual investment accounts managed by professional portfolio managers. Each account is tailored to the specific needs and preferences of the investor, providing a high level of customization. SMAs offer transparency and direct ownership of securities, allowing investors to have a clear view of their portfolio holdings.

Benefits of SMAs:

  • Customization: Tailored investment strategies to meet individual client needs.
  • Transparency: Investors have visibility into the underlying securities within their portfolio.
  • Tax Efficiency: SMAs can offer tax advantages through strategies like tax-loss harvesting.

Unified Managed Accounts (UMA)

Unified Managed Accounts (UMA) combine various investment products, such as mutual funds, exchange-traded funds (ETFs), and individual securities, into a single, integrated account. UMA’s provide a comprehensive approach to portfolio management by streamlining the investment process and consolidating assets.

Benefits of UMA:

  • Diversification: UMA’s offer diversification across different asset classes within a single account.
  • Efficiency: Consolidated management simplifies reporting and administration.
  • Professional Management: Access to professional portfolio management for a diverse range of investment options.

Unified Managed Household (UMH)

Unified Managed Household (UMH) takes the integration concept further by considering the entire financial picture of a high-net-worth family. It consolidates multiple accounts, including taxable and tax-advantaged accounts, trusts, and more, into a cohesive strategy that aligns with the family’s overall financial goals.

Benefits of UMH for High-Net-Worth Families

  • Holistic Approach: UMH considers the family’s complete financial situation, providing a more holistic investment strategy.
  • Tax Optimization: Coordinated management can enhance tax efficiency across various accounts and entities.
  • Comprehensive Reporting: UMH offers consolidated reporting on the family’s entire financial portfolio, simplifying oversight and decision-making.

While each investment management approach has its merits, Unified Managed Household (UMH) stands out as the preferred choice for high-net-worth families. Its holistic approach, tax optimization, and comprehensive reporting provide a level of integration and efficiency that aligns seamlessly with the complex financial needs of affluent households. As the investment landscape evolves, UMH emerges as a strategic solution for those seeking a unified and personalized approach to wealth management.

How We Can Help

At Verus Financial, we specialize in working with high-net-worth families achieve the life they’ve earned. Our deep-rooted understanding of families and their inter-workings, from both a finance and personal standpoint, have helped us create, maintain, and grow generational wealth for our clients.

Contact us today!