What Is a Separate Account?

A separate account is an investment portfolio owned by an investor and managed by a professional investment firm—typically 澳洲幸运5官方开奖结果体彩网:registered iওnvestment advisors (RIA). Although separate ac⛦counts are usually opened through a broke💞rage or financial advisor, they may also be held at a bank or opened with an insurance company.

Sometimes these accounts are referred to as separately managed accounts (SMA) or individually ma𝓡naged accounts.൲

How a Separate Account Works

A separate account is commonly utilized by 澳洲幸运5官方开奖结果体彩网:institutional investors or wealthy retail investors who have at least six figures to invest and want to partner with a professional 澳洲幸运5官方开奖结果体彩网:money manager to focus on a single, customized investing o♈bjective. In general, the minimum investment required to open a separate account can be $100,000 or more.

Money managers offer investors targeted strategies for their separate account assets. In a separate account, funds are not pooled with the investments of other investors like they are, for example, in a 澳洲幸运5官方开奖结果体彩网:mutual fund. Investors can choose from a range of approaches in order to create a portfolio𒁏 that is oriented towards their individual in⛎vestment goals.

An RIA or portfolio manager is in charge of making investment decisions on a day-to-day basis. Typically, they are supported by expert analysts. Armed with discretionary authority over the account, the dedicated manager hired by the investor actively makes investment decisions pertinent to the individual, considering the client's needs and goals, 澳洲幸运5官方开奖结果体彩网:risk tolerance, and asset size.

Special Considerations

When considering whether or not to open a separate account, investors should educate themselves on the fee structures of professional money managers. While their fee structures vary, they can be very expensive. RIAs and portfolio managers' fees typically range from 1% to 3% of 澳洲幸运5官方开奖结果体彩网:assets under management (AUM).

Other Types of Separate Accounts

Insurance Investment Products

Separate accounts are also available to investors through 澳洲幸运5官方开奖结果体彩网:insurance companies. Insurers offer investment products that can be kept separately from any general insurance investments. One example is a 澳洲幸运5官方开奖结果体彩网:fixed annuity.

When you buy a fixed annuity, the insurance company decides how to invest your funds and provides you with a specific, guaranteed return at regular intervals. Because the policyholder is guaranteed a payout for a specified term or for life, fixed annuities are usually used to generate income for 澳洲幸运5官方开奖结果体彩网:retirement.

Personal Separate Accounts

Individual investors can open various other kinds of accounts that can be opened and managed as a separate account. For instance, many 澳洲幸运5官方开奖结果体彩网:brokerages offer self-directed trading accounts that can be managed through an onlineಌ platform.

In addition, 澳洲幸运5官方开奖结果体彩网:individual retirement accounts (IRAs) are SMAs that are used by individuals to save for retirement. 澳洲幸运5官方开奖结果体彩网:Checking accounts and savings accounts held at banks are a🌼lso considered to fall under this category.