What is a Separately Managed Account in the context of a Registered Investment Advisor (“RIA”)?

Definition: This is an account type where the management of the investments held in the account is outsourced to a third party money manager.

When used in an RIA context: “As opposed to managing the client’s assets themselves, the financial advisor opened a Separately Managed Account and chose a money manager to oversee and manage the investments in the account.”

See also: Episode 128, SMA, SMA Manager