SMAs Not Just For The Rich

Separately managed accounts aren’t just for the rich anymore: Several banks are now offering the products to more customers at lower fees and with smaller minimum investments than are traditionally offered by brokerages, which cater to wealthy clients. The Wall Street Journal reports that U.S. Bancorp, Northern Trust, Charles Schwab and Bank of America are some of the names looking for smaller-ticket business. BofA this year plans an SMA product with a $250,000 minimum for a variety of investments, rather than requiring multiple accounts, each with its own investment minimum, while Compass Bancshares has slashed fees to as low as 40 basis point, where the norm is 100 to 300 bps. The number of SMAs in the U.S. has jumped 35% since 2001, according to the Money Management Institute, and assets under management in SMAs will hit $1 trillion by 2009, Cerulli Associates estimates.