Unlock greater growth: how UMAs can help reclaim time and elevate your practice
When we talk to advisors, there’s one thing they all would like more of: time with their clients. This puts a priority on technology and product offerings that can help save the precious time that advisors already have. About 40% of advisors’ time is generally spent on investment management and administrative tasks.1
Unified managed accounts (UMAs) can be a valuable tool to save both time and effort for advisory practices.
What is a UMA?
Unlike traditional investment accounts, which tend to require separate accounts for different investment wrappers, UMAs combine multiple investment vehicles, asset classes, and strategies into a single account structure. These can include mutual funds, exchange-traded funds, and separately managed accounts (SMAs) that provide exposure to stocks and bonds. Furthermore, advisors who are registered as associate portfolio managers or portfolio managers can include their own custom-built PM models.
Combining these assets into one streamlined UMA account has several advantages for both clients and advisors.
For clients, introducing the use of SMAs allows for a higher level of customization than one would get from investing in just mutual funds or ETFs. Since the underlying stocks and bonds of SMAs are purchased directly in the client’s account, they also provide more transparency in holdings, returns, and fees. It gives clients a more simplified view of their investments, including tax summaries and a single performance report.
Time saver
With a UMA, an advisor can create model portfolios varying by risk levels and account size. While the advisor manages ongoing portfolio construction, UMAs allow them to download functions such as trading, rebalancing, and fee collection to the head office. Additionally, advisors can supplement their own model portfolios with a selection of portfolios designed by Manulife Wealth and backed by a deeply experienced team of asset allocators, investment product research analysts, and portfolio construction consultants, therefore outsourcing the asset allocation, security selection, and ongoing due diligence. Model portfolios are supported with market commentary, quarterly profiles, and address know-your-product obligations.
72% of advisors report annual assets under management growth of 10% or more since they started outsourcing, while 62% report revenue growth of 10% or more2
Advisors also benefit from the scalability of the model-based practice, as they can attach new clients to an existing UMA model that matches their investment objectives once they assess the clients’ risk profile.
Ultimately, UMAs provide a compelling fee-based program to enhance an advisor’s client offering, with the significant added benefit of freeing up time to better serve clients and grow their business.
