Personalized Investment Management with WealthADV 
What are UMAs and OPM?

Unified Managed Accounts (UMAs) are revolutionizing the service delivery landscape for independent, fee-based financial advisors. UMAs are an investment management solution designed to overcome the shortfalls of mutual funds and separate accounts while providing an effective way to achieve diversification and tax-efficient personalization for clients. Overlay Portfolio Management (OPM) is the core process that drives a Unified Managed Account (UMA). It requires coordinating the investment recommendations among multiple managers with any client restrictions or mandates, generating and blocking trade orders, trade execution with the various custodians, and active management of taxable events.

Overlay Portfolio Management balances the investment decisions and trades of individual managers, with the investment needs of clients (e.g. rebalancing, restrictions, cash flows, tax management), to implement a personalized investment solution for each individual client. Nobody understands their clients’ specific needs better than advisors themselves. Each client has a unique risk tolerance, a different cost basis for each security, gains and losses from outside assets, unmanaged securities such as company stock or stock options, and other factors that make each client unique in how their portfolio should be managed. The RIA acts as the investment “quarterback” for the client, coordinating and customizing investment decisions to best suit clients’ constraints, risk tolerance, and tax profile.

Taxes and expenses are and have been a large thief on the net returns of clients. The overlay portfolio manager can affect a meaningful reduction in this performance drag. Through combining multiple portfolios in a single, unified account operational and custodial costs are reduced, and client reporting simplified. With sophisticated overlay portfolio management technology, rebalancing and cross-manager tax management are easily facilitated across the client’s complete asset allocation. The impact on taxes from loss harvesting can go beyond just the potential current year benefit once carried forward losses are considered, and the added transaction costs from redundant positions and potential wash sale violations can be avoided.

UMAs and OPM allow financial advisors to better serve their clients with greater productivity, resulting in an overall improvement in client retention and firm profitability. WealthADV is the industry’s most sophisticated and flexible platform for UMAs and OPM. Financial advisors continue to direct the investment of their clients’ accounts while WealthADV implements those investment directions, enabling the delivery of personalized investment management services to clients while the financial advisor benefits from operating efficiency and scalability.