Managed Account

A Managed Account ( German managed account ) is a form of investment in which a private or institutional customer with a third party mandated asset management deposits or stocks of a ( trade ) account. The money can be managed by a corresponding bank department or of investment companies (" Broker "). The Manager seeks to achieve gains in favor of the account by independent trade in financial instruments. Here, the investor grants the administrator of the account Mananged a limited power of attorney to implement this an agreed investment strategy.

Features

With a managed account, the investor is own any of the financial instruments in which the Portfolio invests, and he has insight into the individual transactions. When investing in a mutual fund, however, the investor holds shares in a joint assets.

Since managed accounts are actively managed - ie by a manager - an increased cost than a passive strategy such as an index fund.

Manages a manager multiple accounts using the same strategy as additional technical complexity arises from the fact that he has to perform individually on all accounts the transactions that are possibly also at different brokers with different trading systems. Furthermore, possibly even legal or regulatory requirements must be met.

It's a - for private investors significant - minimum deposit required, which is typically on the order of 100,000 EUR.

Fraud risks

The U.S. regulator CFTC advised to be skeptical of offers, where derivatives to be traded on behalf of clients. In particular, promises, it could high returns can be achieved within a short time, or lack of education about extremely high risks, pointed to fraud.

The collapse of the Phoenix debt service was a prominent fraud case in Germany in connection with managed accounts. The product Phoenix Managed Account constant, high value gains on option market were in prospect, actually, it was a Ponzi scheme, which finally collapsed in 2005.