What Investors See in ‘Separately Managed Accounts’: QuickTake

It has become investment gospel: Ordinary investors should park their savings in low-cost mutual funds or exchange-traded funds and leave them there for the long haul — set it and forget it. Now, however, more middle-income investors are choosing a kind of actively managed account that used to be available only to the rich. These “separately managed accounts” are overseen by professional money managers and are personalized for an individual investor’s particular financial situation and investment goals. The downsides are potentially more complex fee structures and greater risk.

1. What are separately managed accounts?

They are highly customized investment accounts ...