A managed account is a term used in the world of investing to describe an investment portfolio whereby the funds are being managed by a professional investment manager. For example, if Adam Fernandez opens a managed account with $2 million of assets and hires Giselle Ray as his money/investment manager, it is Giselle’s responsibility to undertake transactions on behalf of the account owner that are suited to their financial needs and goals.

It’s common to have a collection of investment accounts -- a couple of old 401(k)s from previous jobs, your brokerage account that you opened after seeing Warren Buffett in a documentary, and so on. Investment management can help you streamline your financial life by bringing all of these accounts together under one roof, and then executing a coordinated investing plan that’s consistent with your goals.

Managed accounts typically provide a higher level of diversification than DIY investments. They do this by purchasing a wide range of assets, such as stocks and bonds, on behalf of their clients. They also use their expertise to make informed decisions on when to buy and sell. They can also use a variety of tax strategies to offset gains and losses, which can have a significant impact on the overall returns of the portfolio.

Investing with a wealth manager can be an excellent way to build generational wealth for yourself and future generations. However, many people may not be familiar with what a managed account is or how it works. This article will cover the basics of managed investing, the advantages and disadvantages of this approach, and how to determine if it’s the right fit for you.

When it comes to investing, fees can greatly impact your final return. They can reduce your potential profits and even increase the size of your losses. This is why it’s important to understand the different types of fees associated with managed investments and how they affect your bottom line.

Whether you choose an active or passive strategy, fees will eat into your returns over time. Inactive investments, such as passive index funds, are designed to replicate the performance of a market index without trying to outperform it. These funds typically have lower associated fees than actively managed funds, such as those that are managed by a fund manager.

There are many benefits to investing in managed assets, including the ability to generate better returns over a long period of time and access to a wider range of investments that you might not have available to you as a self-directed investor. The specialized training, industry contacts, and experience of wealth managers also allow them to confidently purchase financial products that are not easily accessible by individuals following a self-directed approach.