FAQ'S
Q: What are Unified Managed Accounts (UMAs)?
A: Unified Managed Accounts (UMAs) are privately managed accounts that combine multiple investment managers into a single, customized account, while seeking to increase tax efficiency where appropriate.
Q: What is Overlay Portfolio Management?
A: UMAs employ an overlay management strategy designed by Parametric to provide coordination across multiple investment managers, enhance tax efficiency and automatically rebalance the portfolios - all in a single account.
Q: What are the benefits to investors in using an UMA?
A:
- Simplicity - Multiple asset classes and investments in a single account with one set of new account paperwork, one statement, one report.
- Coordination - Complete account coordination including account rebalancing, risk control, account restrictions and tax lot management.
- Customization - Direct ownership of individual securities provides opportunities to restrict holdings and customize portfolios.
- Tax Efficiency - Advanced overlay portfolio management strategies are used to maximize tax efficiency.
Q: How do I work with Parametric to build a UMA program and how long does it typically take?
A: Parametric builds custom UMA programs for sponsors. Parametric takes great pride in meeting the deadlines the sponsor firms set for the rollout of their programs. We have had several sponsors roll out a custom UMA program with 90 days of project initiation.
Q: Who is Parametric?
A: Parametric is a Seattle-based investment firm specializing in managing structured equity portfolios. They are widely recognized for their pioneering research in the field of tax-efficient investing. They are the leading overlay portfolio manager in the industry, managing more portfolios and assets than any other independent overlay portfolio management firm.
Q: Who will have discretionary authority on the accounts?
A: Parametric is the overlay manager and will be responsible for trading the equity portion of the portfolio. The fixed income managers will continue to have discretion on the fixed income portion.
Q: What methods will Parametric use to add tax-efficiency to the portfolio?
A:
- Tax Aware Transition of Pre-Existing Securities
- Tax Aware Withdrawals
- Tax Efficient Rebalancing
- Short Term Gain Deferral
- Systematic Tax Loss Harvesting
- Tax Lot Management Between Managers
- Avoidance of Wash Sales
- Tax loss harvesting
Q: How will rebalancing occur?
A: Parametric has developed many flexible rebalancing options based on percentage, time, sponsor directed or combination. Parametric will automatically establish the rules and implement all the rebalancing - it is no longer the responsibility of the financial advisor.
Q: How much (beyond the simplicity, customization & coordination) can Parametric's overlay management add to the return of taxable accounts?
A: The benefit from overlay management can vary over time. Over the last three and a half years in live portfolios, Parametric's overlay management has added over 1% in after-tax value.
Q: Can I customize the UMA?
A: Each investor can mandate restrictions on their account - individual securities, social restrictions, or industry groups. Parametric has the ability to customize or preset allocations depending on the needs of the program sponsor. Manager selection is also determined by the program sponsor.
Q: Can I transition existing assets into the UMA?
A: Yes, Parametric will provide a transition analysis that evaluates the current positions at the tax-lot level and transition pre-existing holdings as tax-efficiently and with as low a turnover as possible. Portfolios will generally be transitioned within 2 business days.
Q: How long will it typically take to invest?
A: After receiving all necessary paperwork and receiving approval to trade, portfolios will be fully invested within 2 business days.
|
