Managed account

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Managed account

An investment portfolio one or more clients entrusted to a manager who decides how to invest it.

Managed Account

A brokerage account or any other account where the monies therein are invested by another party. For example, a person may have a discretionary account at his/her brokerage. This allows the brokerage to invest the funds in the account as it sees fit, in accordance with the account holder's investment goals and the prudent person rule. Other examples of managed accounts include annuities and IRAs. What distinguishes a managed account from other accounts is the fact that the account holder does not manage it himself/herself. See also: Separately managed account, Managed money.

managed account

An investment account that is managed by a broker or other professional. Managed accounts are designed for investors lacking the time or expertise to make their own decisions.

Managed account.

A managed account is a portfolio of stocks or bonds chosen and managed by a professional investment manager who makes the buy and sell decisions.

Each managed account has an investment objective, and each manager oversees multiple individual accounts invested in the same basic portfolio to meet the same objective.

While managed accounts resemble mutual funds in some ways, with a managed account you own individual securities rather than shares of a common fund.

You may also be able to request that the manager avoid certain investments, which you can't do with a mutual fund. And, through your broker, you might ask the manager to sell certain holdings in your account to realize capital gains or losses.

There are no phantom gains in managed accounts. Those gains can occur if a mutual fund realizes a profit from selling an investment and credits you with a capital gain even if there's no actual increase in your account value.

However, the minimum investment is usually substantially higher for a managed account -- often $100,000. Plus the annual fees, which are included in the amount you pay the financial professional who recommends the account, may be higher than the fees on a mutual fund of similar value.

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Managed accounts are allowed as a qualified default investment alternative in retirement plans, but they face significant challenges preventing them from overtaking target-date funds as the QDIA of choice.
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Summary paragraph: Managed accounts tailor portfolios to the needs of individual participants