What is a Managed Account and How Can it Benefit You?

Posted on 2011-07-09 (UTC) by under Investing.

Investment is confusing, especially if you've never done it before. As with a lot of things, managing investment is generally something best left to the professionals — especially if your investment is sizable.

There are a range of investment options to choose from, and if you're a first time investor, it is very important you get guidance from an advisor who really understands investment and how you can make the most of it.

Your investment manager will oversee your managed funds, offer you advice and undertake investment activity on your behalf.

What is a managed account?

There is so much economic and financial terminology involved with investment that the entire process can become confusing and even overwhelming. It is really important if you intend to start investing, that you understand as much as you can, from the simple terms, through to the decisions your investment manager is asking you to make. When starting your investment process, take the time to do some research to familiarise yourself with processes and jargon — spend time on line and get yourself some basic books to get you started. Most importantly sit with your investment manager and don't be afraid to ask a lot of questions so you feel comfortable becoming an 'investor'.

Kick starting your terminology search, a 'managed account' is basically an investment account that you, as an individual investor, own. Your managed account is looked after by your investment manager, in consultation with you. A managed account shouldn't be confused with a mutual fund, which is a similar account, but share trading isn't undertaken by your account manager for you as an individual, but rather, for a number of investors called 'mutual-fund' holders.

What are the benefits of a managed account?

There are many benefits of a managed account, a lot of which pertain to your money being more controllable and your investment more unique and tailored to suit your needs and goals.

1. Customisation

A major benefit of a managed account is that the account is customisable to your needs, as you are the only investor involved. You can work closely with your investment manager to tailor the investment so it suits your budget, goals and expectations. Make sure your investment manager has worked with accounts of all sizes so they know how best to manage your fund.

2. Control

As an individual investor, you have more control over your investment as you and your investment manager don't need to consider other parties — such as in the case of mutual funds — before making decisions. This means the decision making comes down to you – another important reason to educate yourself as much as possible.

3. Liquidity

As with any group endeavour, all parties need to be considered when undertaking activity. Imagine needing to ask a group if you wanted to remove cash from the ATM? In the case of a managed account, given you are the only party, your investment is more liquid as you can make immediate decisions, withdraw with you ease and continue the process as it suits you.

Author Bio: Tom Mallet is an Australian freelance writer and journalist. He writes extensively in Australia, Canada, Europe, and the US. He’s published more than 500 articles about various topics, including cash loans and car insurance.



Similar Articles:
«
»