Personalized Managed Accounts

The next level of customization in Separately Managed Accounts

What is Personalized Managed Accounts (PMA)?

Personalized Managed Accounts (PMA) are separately managed accounts with a complementary range of services.

Every investor’s needs and preferences are unique. And as wealth grows, so do expectations and complexity—like tax management considerations and category & theme-based restrictions. Yet the level of personalization and customization required to meet each client’s distinct goals can quickly send a practice into disarray.

That’s where Personalized Managed Accounts comes in. PMA is a distinctive solution tailored to investors’ unique and specific needs, featuring:

  • Separately managed accounts
  • Custom overlay services (e.g., tax management considerations and category & theme-based restrictions)
  • Personalized transition management

The potential benefits of PMA

PMA gives you and your clients access to an investing approach that leverages Russell Investments’ extensive investment manager research, selection and monitoring process. This process is our trademark, forming the cornerstone of our advice to global institutional investors for more than 50 years.

But it doesn’t stop there. Now, through PMA, investors have access to the next level of a customized separate account solution that is built entirely around their unique needs. PMA lets you personalize the portfolio at the individual account and securities levels.

Take control and personalize your separately managed accounts with PMA.

PMA empowers you to have:

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Advanced Tax Management

Based on our 35+ years of innovation in tax-managed investing, a toolkit of trading and investment strategies are aimed at reducing tax impact.

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Enhanced Portfolio Personalization

A high level of customization and flexibility is available to meet your clients' unique and complex investment needs.

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Tax-efficient Transition Management

Our custom analysis helps you assess the tax implications of portfolio repositioning and establish an objective transition plan by utilizing a timeline or tax-budget approach.

Achieve all of this while leveraging the Russell Investments partnership to implement Personalized Managed Accounts seamlessly and with little effort on your part.

Use our investor-friendly brochure to help explain the benefits of Personalized Managed Accounts to your clients.

Download PMA brochure

Read our blog post for a quick refresher on the pros and cons of separately managed accounts (SMAs), plus a potential solution for today’s investors: Personalized Managed Accounts.

Read tax management and SMA blog post

Explore the SMAs at the foundation of Personalized Managed Accounts

Depending on your goals and preferences, select one or a combination of our Separately Managed Accounts to form the foundation for your personalized portfolio. Then customize your portfolio with the features that best reflect your goals, circumstances and preferences.

EQUITY

DIRECT-INDEXED SMAs:

Personalized DI All Cap SMA   Overview | Fact Sheet  Lock
Personalized DI Large Cap SMA   Overview | Fact Sheet  Lock
Personalized DI Large Cap Growth SMA   Overview | Fact Sheet  Lock
Personalized DI Large Cap Value SMA   Overview | Fact Sheet  Lock
Personalized DI International SMA   Overview | Fact Sheet  Lock

Explore our Direct Indexing Resource Center

ACTIVE SMAs:

Personalized Large Cap SMA   Overview | Fact Sheet  Lock
Personalized Small/Mid Cap SMA   Overview | Fact Sheet  Lock
Personalized International SMA   Overview | Fact Sheet  Lock

CORE EQUITY SMAs:

Personalized Core Equity SMA   Overview | Fact Sheet  Lock
Personalized DI Core Equity SMA   Overview | Fact Sheet  Lock

FIXED INCOME

FIXED INCOME LADDER SMAs:

Personalized Municipal Ladder 1–5 Year SMA
Personalized Municipal Ladder 1–10 Year SMA
Personalized Treasury Ladder 1–5 Year SMA
Personalized Treasury Ladder 1–10 Year SMA

Overview

MULTI-ASSET

CORE ALLOCATION SMAs:

Personalized 60/40 DI Core Allocation SMA
Personalized 70/30 DI Core Allocation SMA
Personalized 60/40 Core Allocation SMA
Personalized 70/30 Core Allocation SMA

Overview

PMA gives you flexibility and choice

Add custom overlay and exclusion services: These can be added to your Personalized Separately Managed Accounts to provide a truly active approach offering flexibility and a higher level of customization.

Steer your portfolio in the right direction.
Build around your needs.

Custom-design your portfolio:

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Category restrictions

You have beliefs, such as values-based preferences, that may lean you toward or away from specific types of companies. With Personalized Managed Accounts, you can restrict purchases to those stocks, industries and categories in your customized portfolio.

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Individual stock restrictions

You own restricted stock or equity options. Personalized Managed Accounts allows you to limit additional ownership in the company or industry.

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Custom portfolio transitions

You have a concentrated stock position with a low-cost basis and want to avoid triggering significant capital gains if you sold it. With Personalized Managed Accounts you can build around this position or transition out of it over time while minimizing the tax.

Here’s how we can help you maximize your after-tax wealth.

Tax-managed overlay services provide:

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Centralized management

  • Trading
  • Implementation
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Year-around tax management

  • Tax-loss harvesting
  • Wash sale minimization
  • Tax smart turnover
  • Holding period
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Dedicated team

  • Investment professionals focused on potentially maximizing your after-tax outcome

Transition accounts easily and efficiently

Our transition management is customized to your client's personal preferences and makes it easy for you to transition your client's current assets to PMA in a tax-efficient manner. Through our custom transition analysis report, we can develop an optimal transition plan customized to each of your clients’ tax preferences and circumstances.

Our Consultative Review process entails:

1

Provide your client’s existing holding information to the Russell Investments' PMA Service Team.

  • Client’s name
  • Holding information per lot (ticker, date acquired, number of shares, and cost basis per share)
  • Target PMA model strategy (optional)
  • Short-term capital gains tax rate
  • Long-term capital gains tax rate
  • Category & theme-based restrictions (if any)
  • Stock restrictions (if any)
  • Tax budget (if any)
  • Short-term capital gains budget (if any)
  • Long-term capital gains budget (if any)

2

Your Russell Investments team will develop a custom transition proposal with you to take into account all your client’s individual tax preferences and circumstances.

Depending on the target SMA, transition options can include a time-period (immediate, 3- or 5-years), tax, or capital gains budget approach.

A Tax-Budget transition approach is available for: both Personalized Core Equity SMA solutions, and all Personalized DI SMAs. The Timeline approach is available for all Personalized SMA solutions.

3

Choose the optimal transition for your client and complete the PMA Account Onboarding steps.

Additional related materials

PMA Brochure

PMA Brochure

Download PMA Brochure

PMA Brochure

PMA Direct Indexing eKit

Download PMAs Direct Indexing eKit

Personalized DI All Cap SMA One-Pager

PMA Direct Indexing Solutions

Download PMA Direct Indexing Solutions

Research paper: Mitigating taxes while transitioning to a new strategy

Research Paper: Mitigating taxes while transitioning to a new strategy

Download Research Paper

Personalization Options

PMA Personalization Options Brochure
 

Download PMA Personalization Options Brochure

Personalized DI All Cap SMA One-Pager

White Paper: SMA design in the presence of taxes
 

Download White Paper

Transition analysis sample report

Transition Analysis Sample Report
 

Download Sample Report

Separately Managed Accounts

Using Russell Investments’ Separately Managed Accounts, investors can not only gain access to institutional-quality money managers at reduced account minimums, but also implement a tax-efficient approach that leverages Russell Investments’ renowned investment manager research, selection and monitoring.

Separately Managed Accounts

Direct Indexing Resource Center

Our Direct Indexing Resource Center is designed to provide you with the insights and knowledge necessary to confidently navigate the direct indexing landscape. So, let’s dive in and explore how direct indexing can potentially revolutionize your investment approach and redefine your financial success.

Direct Indexing Resource Center

Frequently Asked Questions for Personalized Managed Accounts (PMA)

Separately Managed Account (SMA)

What is a Separately Managed Account (SMA)?
A portfolio of securities managed by an investment firm on an investor’s behalf, offering customization and direct ownership of securities.
What are the benefits of using SMAs for investors?
SMAs provide customization, personalized portfolios, the ability to exclude specific companies or sectors, and potential tax efficiency.
How do SMAs differ from mutual funds or ETFs?
Unlike mutual funds or ETFs, SMAs offer direct ownership of securities, customized selection of stocks, greater transparency and the potential for tactical tax-loss harvesting.
What are some reasons why investors choose SMAs over other investment options?
Some investors choose SMAs for customization, flexibility, higher-level tax management, alignment with personal values or preferences, and the ability to directly own individual securities.
How can SMAs help investors minimize their tax liability?
The individual ownership of securities in SMAs allows for tactical tax-loss harvesting, which can offset gains in the account or other parts of the portfolio, potentially reducing the investor’s tax liability.
Give an example of how SMAs can be used to meet an investor’s customization requirements.
An advisor used an SMA for a client who wanted to exclude oil and gas companies from their portfolio due to environmental concerns, providing a customized solution aligned with the client's values.
How can SMAs help investors diversify a concentrated stock position?
SMAs, particularly those incorporating Direct Indexing, can efficiently and tax-smartly reduce a concentrated stock position, mitigating the risk associated with holding a large percentage of one or a few company's stock.
What are the drawbacks of managing SMAs without the right tools?
Without proper tools, managing SMAs can involve manual entry, frequent monitoring, complex trading activities, and challenges in handling security restrictions and tax management effectively.
How can partnering with a firm like Russell Investments help financial advisors implement SMAs more effectively?
Partnering with a firm like Russell Investments provides access to Personalized Managed Accounts (PMA), offering professional portfolio management, customization, tax management, and seamless implementation, allowing advisors to focus on client relationships.

Direct Indexing

What is Direct Indexing?
Direct Indexing is an investment strategy designed to replicate the market exposure of a specific index by holding a representative selection of the securities within that index. Separately Managed Accounts are a common structure used to implement Direct Indexing, providing investors with the ability to directly purchase and own individual securities. This approach gives a high level of customization tailored to each investor’s unique and specific investment needs, such as tax management, value-based considerations, and custom screens.
What is Personalized Indexing?
Personalized Indexing is frequently used interchangeably with Direct Indexing, which creates a portfolio with a representative selection of the securities in a given index in a separately managed account. Personalized Indexing, as well as Direct Indexing incorporates client-directed customization, such as tax management, Environmental, value-based considerations, and custom screens.
What investment challenges can Direct Indexing help solve?
Direct Indexing can help solve investment challenges such as the need to manage taxes or the requirement to impose certain restrictions,
How does Direct Indexing in Separately Managed Accounts differ from commingled product options like mutual funds and ETFS in terms of tax efficiency?
Direct Indexing in Separately Managed Accounts allows for more tax efficiency because investors can selectively harvest tax losses from individual securities, then use those tax losses to offset gains in other areas of their portfolio. In commingled product options, tax loss harvesting depends on overall market performance and the losses are owned by the fund or ETF.
How does Direct Indexing differ from mutual funds and ETFs in terms of personalization?
Direct Indexing offers greater personalization compared to mutual funds and ETFs by allowing investors to directly own individual securities tailored to their specific investment preferences and goals.
How can Direct Indexing help mitigate the tax impact of reducing a concentrated stock position?
Direct Indexing can allow investors to offset capital gains from selling a concentrated stock position with capital losses generated from other securities held in the portfolio, helping minimize the tax implications.
What are some challenges investors face reducing a concentrated stock position?
Investors may hold an emotional attachment to the stock or may face potential tax implications, as the original cost of the shares could be significantly lower than the current price, leading to a large capital gain and subsequent tax bill.
What benefits does Direct Indexing provide in managing tax implications for future taxable events?
Direct Indexing’s ability to utilize individual losses on stocks not only helps manage current tax liabilities but may also provide the flexibility to offset future taxable events, such as the sale of a business, property, or stocks and bonds.
Why is it beneficial to plan for future financial windfalls by using Direct Indexing SMAs and generating tax losses over time?
Planning for financial windfalls by utilizing Direct Index SMAs and generating tax losses over time helps the investor build tax “assets” that can be used in the future to offset the tax liability of the windfall. This could provide significant tax savings for the investor and potentially better overall outcomes.

Transition Analysis

How can a transition analysis help investors when repositioning their portfolios?
A transition analysis can provide investors with a structured plan to migrate from a concentrated or unmanaged portfolio to a customized and diversified investment strategy, such as a separately managed account (SMA), while managing the related tax burden.
What are the two approaches to transitioning a portfolio in a tax-efficient manner?
The two approaches to tax-efficiently transitioning a portfolio are the timeline approach, which controls the length of time over which the transition occurs, and the tax-budget approach, which sets an annual budget for capital gains taxes generated by the transition.
How can a transition analysis assist investors in making decisions about their portfolio transition?
A transition analysis can present the actual tax consequences and tracking error values derived from different transition methods, helping investors choose an approach that aligns with their preferences regarding risk and tax implications.
What is the purpose of assessing tracking error when repositioning a portfolio?
Assessing tracking error helps determine the potential performance deviation between the investor’s portfolio and the targeted benchmark, aiding in the decision-making process during the transition.
How can a tax-managed transition help investors with concentrated or unmanaged portfolios?
A tax-managed transition, utilizing a separately managed account (SMA), allows investors to migrate their concentrated or unmanaged portfolios to a customized and diversified investment strategy, while minimizing the related tax burden.
What role can financial professionals play in guiding investors through portfolio transitions?
Financial professionals can provide valuable guidance by presenting options, performing transition analyses, assessing tax implications and helping investors make informed decisions with their risk tolerance and tax preferences.

Customization, Values- and Faith-Based Investing, and Charitable Giving

What are some customization options that investors may seek when it comes to their investment portfolios?
Whether you need to restrict certain securities or industries due to existing business interests, or you are looking to apply values-based preferences, the Personalized Managed Accounts program can accommodate your personalization needs, while monitoring the portfolio to ensure it is aligned with your appropriate risk and return profile.
What advantage does the Personalized Managed Accounts program offer in terms of customization?
The Personalized Managed Accounts program, including direct indexing strategies, allows investors to customize their equity portfolio based on their investment goals and beliefs, such as category & theme-based restrictions (including Catholic values, Environmental impact, Human rights & social impact and Shariah aligned).For more personalization options, click here.
How can offering a portfolio aligned with clients' values differentiate financial advisors?
By offering the option for clients to select a portfolio that supports their values, financial advisors can differentiate themselves from their peers and guide clients to invest in a way that aligns with their individual beliefs.
How does the PMA program support charitable giving?
Charitable giving through the PMA program enables investors to gain tax efficiency while supporting causes aligned with their beliefs. This allows an investor to donate individual stocks that fit the charity’s focus and principles.

PMA

What does PMA mean?
PMA means Personalized Managed Accounts, which are comprised of separately managed accounts with a complementary range of services.
How can Personalized Managed Accounts (PMA) enhance customization and tax management?
PMA, offered by Russell Investments, provides a comprehensive solution for implementing customization, tax management, risk balancing, preference screens, and year-round monitoring, relieving investors and advisors of implementation stress.
How does the Personalized Managed Accounts (PMA) program work?
Our PMA program is a distinctive solution tailored to an investors’ unique and specific needs featuring: separately managed accounts (SMAs); custom overlay services such as tax management considerations and category & theme-based restrictions, and personalized transition management to address embedded gains and other portfolio transition needs.

Depending on an investor’s goals and preferences, one, or a combination of our SMAs offered through the PMA program will form the foundation of the investor’s personalized portfolio. Then select one or multiple features to customize the portfolio to best reflect unique needs or select from a list of pre-defined exclusions.
What types of separately managed accounts are offered through the PMA program?
We offer Direct-Indexed, Active and Core Equity separately managed accounts (SMAs).
What are the advantages of the PMA program?
Our PMA program provides advisors and their clients with the flexibility to tailor each solution to their individual needs. That could include:

  • Maximizing after-tax wealth
  • Aligning values-based preferences with investments
  • Diversifying a concentrated stock position
  • Limiting purchases in stocks or industries already owned
  • Developing an optimal tax-efficient transition plan
Mutual funds are an acceptable option for most investors who don’t need tax management or customization. But tax-managed mutual funds may help investors with non-qualified assets where taxes are an important consideration. SMAs can be a great option for many investors with specific needs. With PMA, advisors can offer investors a higher level of customization and comprehensive tax management, while also targeting a specific outcome.
How to choose the best investment strategy under the PMA program?
If you are an investor, contact your financial professional. If you are an advisor, contact your Russell Investments Sales Team.
Why choose Russell Investments for Personalized Managed Accounts?
At Russell Investments, we've been a leader in investment innovation since the firm's founding in 1936. Our PMA program gives financial professionals and their clients access to an investing approach that leverages Russell Investments' extensive investment manager research, selection and monitoring process. The program is a distinctive suite of solutions for financial advisors and their clients that can be customized to each investor’s unique and specific needs.

Our PMA program leverages the best that Russell Investments has to offer. It features a dedicated team of portfolio managers, quantitative research analysts and service teams, centralized trading and implementation, as well as automated year-round tax management capabilities, including tax-loss harvesting, wash-sale minimization, tax-smart turnover and holding-period management. Ultimately, these customized SMAs will help clients meet their desired outcomes by minimizing the impact of taxes and transaction costs while maintaining tracking error to a target portfolio. We leverage technology to help investors achieve growth and optimal after-tax outcomes.