Parametric believes UMAs will continue to grow as they offer significant benefits to all parties:
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Benefits to Clients
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- One account / one set of paperwork
- True separate account management
- Enhanced tax-efficiency across entire equity portfolio
- Structured rebalancing
- Total account after-tax reporting
- Smaller investor receives complete allocation
- Direct ownership of positions, transparency of holdings
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- Customizable for individual investor social or other restrictions
- Ability to transition existing assets across entire asset allocation
- Less tax penalty when making manager changes
- Tax-aware withdrawals across entire portfolio
- Investor control over taxable events
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| Benefits to Advisors |
- One account
- Customization
- Integration with client's financial life
- Administrative simplicity
- Transition analysis puts consultant on same side as client
- Tax management across all accounts
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- Competitive offering with all firms
- Ability to fulfill all parts of asset allocation in one account
- Automatic rebalancing
- Shift client focus to strategy, not individual pieces
- Easy implementation of client restrictions
- Consistency of offering within firm / office
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| Benefits to Managers |
- No account management
- No small accounts
- No trading/reconciliation
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- Reduced account closings in periods of underperformance
- Margin protection
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| Benefits to Program Sponsors |
- Competitive latest generation offering for recruiting and retaining top brokers
- Significantly lower operational costs - 1/3 to 1/5 the number of accounts
- Increased fee-based business
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- Improved diversification for clients
- Reduced paperwork and account service activities - restriction management, cash flow management, open and close account activity with single firm
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