Page 18 - South Mississippi Living - December, 2016

COASTNOTES
FINACIALFUTURES
Separately Managed Accounts
story by Suzie Sawyer
Many individuals, particularly those with substantial assets, simply don’t have the time or the inclination to monitor market conditions, research investments, and manage the day-to- day activity within their portfolios.
If this sounds like you, consider the advantages of a separately managed account (SMA).
An SMA is a diversified portfolio
of securities administered by a professional money manager using
a defined investment strategy. With an SMA, your assets are held in an individual account and are not co- mingled with anyone else’s. You maintain direct ownership of the stocks, bonds, and other assets in the account.
Direct ownership offers numerous benefits. First of all, you’ll enjoy complete transparency — you’ll know exactly what you own, as
a comprehensive listing of your holdings will be reflected on your monthly statements.
You’ll also have the ability to exclude or minimize exposure to specific sectors or individual companies. This could be useful if you already own a significant position in your employer’s stock, for instance. In addition to cash,
you can typically fund an SMA with securities you already own, and in most cases, you can transfer securities out of your SMA. However, putting too many restrictions on the manager has the potential to negatively affect performance.
Furthermore, SMAs can be particularly advantageous when it comes to year-end tax planning. Since the cost basis of each security in the account is established at the time of purchase, you can consult your tax professional and direct your manager to take capital gains and losses when they may be most beneficial to you. You can also donate low-cost-basis shares to charity.
Finally, direct ownership lets you maintain proxy voting rights for individual companies in which you own stock.
Once available only to institutions or ultra-wealthy individuals, SMAs are now accessible to a much wider range of investors, as many SMAs require as little as $100,000 to open an account. And SMAs’ fee structure means you pay an annual fee based on assets under management.
While there are thousands of professional money managers to
Article provided by Suzie P. Sawyer, Managing Director/Investment Advisor Representative of Trinity Investment Services, LLC, who can be reached at 228.864.4460. Securities offered through Century Securities Associates, Inc., Member SIPC and FINRA, a subsidiary of Stifel Financial Corp.
Home Office: 501 North Broadway, St. Louis, Missouri 63102, 314.342.4051.
choose from, a financial advisor can perform the due diligence and help you select one that is right for you.
18 SOUTH MISSISSIPPI Living • December 2016
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