Unified Managed Household Account UMHA Overview
Contents
Unified Managed Household Account (UMHA): Overview
What is a Unified Managed Household Account?
A unified managed household account (UMHA) is a privately managed account that consolidates multiple unaffiliated products including mutual funds, ETFs, and individual securities. The account allows immediate family members, such as parents and children, to access the account. This type of account allows for ease of administration for the financial institution and greater transparency for the investing family.
Understanding Unified Managed Household Accounts (UMHA)
Unified managed household accounts (UMHAs) operate on a single, integrated system, which allows a financial advisor to view various assets and product types to create performance reports. This holistic view also enables financial advisors to customize investment decisions for each client within their household and simplify operational procedures that are typically complex. Some UMHA programs allow clients to create account groups for each investment goal, with support for individual performance reports, billing, and statements.
UMHAs offer transparency for family members to gain a deeper understanding of their assets. Asset management firms can designate a central relationship manager for large families with accounts in different parts of the business. UMHAs streamline paperwork, simplify fees, and facilitate more sophisticated tax management.
Considerations for a UMHA
Consumers should consider several factors when consolidating accounts into a UMHA. UMHAs are often discretionary programs, where the financial advisor has the authority to make investing decisions. Investors select a risk-based model, and the firm handles rebalancing and asset allocation adjustments. Therefore, a UMHA’s performance depends largely on the company’s success in selecting securities and making allocation changes. Investors should carefully choose the firm to manage their UMHA.
With the transparency and simplicity of consolidating securities, investors have an opportunity to earn better risk-adjusted and tax-managed returns through comprehensive oversight, execution, and reporting. They may also save on fees typically charged for each account. Fee discounts may be available based on your household’s assets under management.