Unified Managed Accounts: A Growing Trend in Wealth Management
Unified Managed Accounts (UMAs) have seen a significant rise in popularity in recent years, driven by their ability to consolidate multiple investment types into a single, professionally managed account. Rather than maintaining separate accounts for different investment types—such as a large-cap separately managed account (SMA), a fixed income SMA, and another for mutual funds or exchange-traded funds (ETFs)—a UMA organizes these into distinct “sleeves” within one account, each dedicated to a specific strategy.
This growth is fueled by several key trends and benefits that appeal to investors, particularly high-net-worth individuals, and financial advisors. According to Cerulli Associates, assets in UMA programs are projected to hit $3.7 trillion by 2026. Only the Rep-as-Portfolio-Manager (Rep as PM) segment surpasses UMAs in assets under management. The rise of model portfolios has further fueled UMA popularity, as they provide an efficient vehicle for deploying these models.
Who Uses UMAs and Why?
UMAs are widely used by high-net-worth clients, wealth management firms (e.g., Merrill Lynch, Fidelity Investments, JPMorgan Chase), and turnkey asset management platforms (TAMPs) like Envestnet. Their appeal lies in efficiency, customization, client benefits, and advisor productivity.
“The appeal of UMAs is in how diverse strategies, and securities/ETFs can combine in one account and make it easier to follow for individuals,” Rebecca Conner, CPA, CFP, founder of SeedSafe Financial shared with Connect. “They allow for advanced features such as tax-loss harvesting, asset location strategies, and model-based management all in one place. That is fantastic and something that financial advisors have dreamed of (thank you technology!)”
Investment powerhouses Wellington Management, Vanguard, and Blackstone recently announced a collaboration to create multi-asset investment solutions that span public and private markets. The partnership leverages Wellington’s active management expertise, Vanguard’s leadership in low-cost index and actively managed funds, and Blackstone’s dominance in private markets. The initiative aims to deliver institutional-quality portfolios to individual investors and their advisors.
This follows Apollo’s recent deal with State Street for a new target date fund and BlackRock’s announcement to create UMAs blending public and private markets in the last week. In addition, Charles Schwab recently rolled out its Alternative Investments Select platform to eligible retail clients with more than $5 million in household assets. Manulife Wealth Inc., part of Manulife Wealth & Asset Management, has introduced the Apex Unified Managed Account (UMA) Program.
Last year, wealthtech giant Envestnet announced plans to expand its partnerships with asset managers BlackRock, Franklin Templeton, State Street Global Advisors and Fidelity Investments by committing to planning and sales efforts to deliver personalization UMA capabilities.
By consolidating multiple accounts into one, UMAs simplify asset management tasks and clients experience reduced paperwork and easier tax reporting, enhancing their overall experience. Integrated tools for proposal creation, trading, rebalancing, and reporting streamline advisor workflows, allowing more focus on client relationships.
Challenges with Ongoing Reporting
The success of a UMA program hinges on high-quality investment options and a robust due diligence process to select top-performing managers. Additionally, a seamless advisor experience, supported by integrated technology, is critical for effective implementation.
Despite their popularity, UMAs have drawbacks that temper their appeal for some advisors. Reporting for UMAs presents one of the main challenges, particularly at the sleeve level. While most wealth management firms have tools for household, account, or asset-class-level reporting in traditional multi-account setups, UMAs require detailed sleeve-level performance and position reporting. Some of the challenges include accuracy of sleeve levels, limitations on the platform, and the integration of trade-offs.
“The layering of fees—between asset managers, the platform, and the advisor—can make them more expensive than simpler portfolio solutions. Additionally, the Custodian may control who, and what, can be involved in the portfolio. So, some restrictions may still apply,” added Conner.
Accurate sleeve tagging for each position and transaction is essential but complex, especially when firms rely on multiple vendors for trading, accounting, and reporting. Some primary performance reporting platforms lack native support for sleeve-level calculations. Firms address this by feeding pre-calculated sleeve returns into the reporting tool for display or integrating sleeve input data (e.g., transactions, positions) to enable the tool to calculate returns. Some firms opt to maintain sleeve performance reporting on a separate platform to avoid integration complexity, sacrificing the benefits of a unified reporting system.
Other issues include costs, account minimums and lack of direct control. Management fees typically range from 1% to 3% of assets under management, which can be high for smaller portfolios. UMAs often require minimum investments of $500,000 to $1 million. Investors delegate day-to-day decisions to managers, which may not suit those who prefer hands-on involvement.
With assets projected to grow significantly by 2026, UMAs are a cornerstone of modern portfolio management, particularly for HNW clients and advisors. However, high fees, minimums, and reporting challenges may limit their appeal for some investors.
“Still, UMAs offer a modern, consolidated approach to wealth management that combines flexibility, customization, and administrative ease,” said Conner.
