Unified Managed Accounts (UMAs): Definition, Benefits, and Real-Life Examples


Unified Managed Accounts (UMAs) are professionally managed private investment accounts that offer a diverse range of investments, including mutual funds, stocks, bonds, and more. This article delves into the definition, benefits, and key features of UMAs, making it an ideal read for investors looking to optimize their portfolios.

Understanding Unified Managed Accounts (UMAs)

Unified managed accounts, or UMAs, have gained popularity among high net worth investors as a comprehensive solution for managing their investment portfolios. UMAs are a type of privately managed investment account that stands out for their ability to house a variety of investments, such as mutual funds, stocks, and bonds, all within a single account.

The evolution from separately managed accounts

UMAs represent an evolution from the more traditional separately managed accounts (SMAs). While both UMAs and SMAs are professionally managed and frequently rebalanced, UMAs are distinguished by their capacity to pool multiple investments and investment vehicles with diverse objectives. This attribute makes UMAs an appealing choice for investors who seek a more diversified investment approach without the hassle of managing multiple separate accounts.

Unified managed accounts vs. separately managed accounts

To highlight the difference, separately managed accounts (SMAs) are typically focused on a targeted strategy managed as a separate account for the investor. This means that if an investor wished to invest across multiple strategies, they would often need to open and manage multiple SMAs. In contrast, UMAs offer a more holistic solution by consolidating all of an investor’s assets into one account, making it a more efficient and convenient choice.

Investing through a unified managed account

Unified managed accounts are typically offered by banks, brokerage firms, registered investment advisors, and private wealth managers. These providers have expanded their offerings to accommodate the growing demand for UMAs, with technology playing a pivotal role in supporting their expansion.

UMA providers work closely with high net worth investors to integrate all of their assets within a single portfolio. Once the assets are aggregated, the UMA provider collaborates with the client in several ways. They may analyze the portfolio for a comprehensive plan, which could involve an overlay strategy aimed at managing the portfolio from a targeted asset allocation diversification perspective. Moreover, UMA providers offer investors new options with affiliated companies and products that align with the client’s long-term financial goals.

Modern portfolio theory and risk-return optimization

One of the key advantages of UMAs is their capacity to align a client’s total portfolio for risk-return optimization. UMA providers analyze the combined assets, often leveraging the principles of modern portfolio theory, to create an efficient frontier that optimizes the risk-return trade-off for the client.

Comprehensive reporting and tax planning

UMA providers also offer high net worth clients more streamlined reporting on their investments, providing greater support for comprehensive tax planning. This level of service ensures that clients can make informed decisions regarding their tax liabilities and investment strategies.

Customized rebalancing schedules

Rebalancing is a crucial aspect of portfolio management. UMA providers work with clients to determine a rebalancing schedule that aligns with their overall investing strategy. This personalized approach ensures that the client’s portfolio remains in line with their financial objectives.

UMA standards and fees

It’s important to note that UMA standards can vary among providers. Investors typically sign an agreement that details the management of the account, associated fees, allowable investments, and structuring. Speaking of fees, UMA investors usually pay annual management fees based on the total assets under management (AUM). These fees are typically tiered, decreasing as AUM rises, and can range from 1.50% annually to 3%.

Pros and Cons of Unified Managed Accounts

Weigh the risks and benefits

Here is a list of the benefits and drawbacks to consider.

  • Diversification: UMAs allow for a diversified portfolio, reducing risk.
  • Convenience: Managing multiple investments within a single account is convenient.
  • Professional Management: UMAs are professionally managed, ensuring optimal strategies.
  • Fees: UMA management fees can be relatively high.
  • Complexity: UMAs may be complex for investors unfamiliar with their workings.

Examples of Unified Managed Accounts (UMAs)

Unified managed accounts (UMAs) are versatile investment vehicles that can be tailored to a variety of financial objectives. Here are a few examples of how high net worth investors might use UMAs to meet their financial goals:

Example 1: Diversified investment portfolio

One of the primary advantages of UMAs is their ability to offer a diversified investment portfolio within a single account. For example, an investor with a high net worth may wish to diversify across various asset classes, including stocks, bonds, and alternative investments. A UMA can be customized to include these diverse assets while being professionally managed by a UMA provider.

Example 2: Tax-efficient investing

High net worth individuals often have complex tax considerations. UMAs can be structured to optimize tax efficiency. For instance, an investor may want to minimize capital gains taxes by strategically allocating assets and implementing tax-loss harvesting strategies. UMAs can accommodate such needs and offer comprehensive tax planning support.

UMAs: An attractive option for high net worth investors

UMAs are particularly favored by high net worth investors who seek a sophisticated approach to portfolio management. Their ability to accommodate a wide range of investments and provide professional management sets them apart as an attractive option for individuals with substantial wealth.

The role of technology in UMA expansion

The proliferation of technology has played a pivotal role in the growth of unified managed accounts. This subheading delves into how technological advancements have supported the expansion of UMAs by offering investors greater flexibility and accessibility.


In conclusion, unified managed accounts are a sophisticated investment management solution that appeals to high net worth investors seeking diversification, professional management, and streamlined portfolio administration. While they offer numerous benefits, including enhanced diversification and convenience, investors should be mindful of the associated fees and complexities. UMAs provide a comprehensive approach to managing wealth, enabling investors to streamline their investments and optimize their portfolios.

Frequently asked questions

What distinguishes Unified Managed Accounts (UMAs) from Separately Managed Accounts (SMAs)?

UMAs differ from SMAs in their ability to consolidate multiple investments with diverse objectives into a single account, offering a more diversified investment approach. SMAs typically manage a separate account for each strategy, requiring investors to open and manage multiple accounts.

How are UMAs customized to align with a client’s financial goals?

UMA providers collaborate with high net worth clients to integrate all their assets. They offer a comprehensive plan, including overlay strategies, to manage portfolios based on targeted asset allocation diversification. This customization ensures that the client’s total portfolio aligns with their specific financial objectives.

What role does technology play in the expansion of UMAs?

Technology has significantly contributed to the growth of UMAs. It allows for more flexibility and accessibility in managing and overseeing a multitude of investments. This expansion has broadened the offering of UMAs to accommodate the evolving demands of investors.

What are the key benefits of UMAs for high net worth investors?

UMAs offer high net worth investors the advantages of diversification, convenience, professional management, and streamlined reporting. These benefits make UMAs an attractive choice for those seeking a sophisticated approach to portfolio management.

How do UMAs help with risk-return optimization?

UMAs utilize Modern Portfolio Theory principles to optimize the risk-return trade-off for clients. By analyzing combined assets, UMAs create an efficient frontier that aligns with a client’s financial goals, ensuring an optimal risk-return profile.

Key takeaways

  • Unified managed accounts (UMAs) offer diversification and convenience for high net worth investors.
  • UMA providers work closely with clients to optimize their investment strategies and rebalancing schedules.
  • Investors should be aware of UMA management fees and complexities when considering this investment option.
View article sources
  1. What Are Unified Managed Accounts (UMAs)? – Carbon Collective Investment
  2. Streamline Your Asset Management with TAMP – SuperMoney
  3. Managed Account – OGE.gov