by Robert B. Jorgensen, Robert Jorgensen
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Product Description
The first investor-friendly book on IMAs
By 2010 nearly five million households will invest more than $2.6 trillion in individually managed accounts (IMAs). Today nearly $470 billion is invested in IMAs, yet not one book has clearly addressed the topic-until now. Individually Managed Accounts: An Investor's Guide shows investors what IMAs are, how to use them, and the related pros and cons of investing in them compared to other investment alternatives.
Robert Jorgensen, CIMA (San Diego, CA), is the founder and CEO of RunMoney. He also founded Lockwood Pacific Investment Group and held senior positions at E. F. Hutton and Salomon Smith Barney. He is a regular speaker at numerous financial forums.
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Average Customer Review:
2 of 2 people found the following review helpful:
 Separately Managed Accounts are the Wave of the Future!, 2006-02-02
Mr. Jorgensen has written a relatively easy-to-follow book regarding the Separately Managed Account (SMA) segment of the financial services industry.
The best point about the book is it's consistent message that SMA's are now readily available and accessible to the "smaller" investor. With technology, institutional-level money managers can now provide their services to investors who do not qualify for, what was in the recent past, an average of a $1 Million minimum account size.
Where the book fails is in its lack of clarity regarding "active" vs. "passive" management vs. "do-it-yourself" management. There are certainly many academic studies that indicate that "passive" (i.e., index funds) investing consistently beats "active" management. However, all of those studies compare actively managed mutual funds vs. passive (indexed) mutual funds (or, more often than not, to the indexes themselves which an investor CANNOT directly invest in)...they do NOT compare the results of separately managed accounts that are actively managed by institutional-level money managers for individuals.
This is the crux of the issue: an investor who has a Separately Managed Account is NOT participating in the Mutual Fund investment world, thereby eliminating many, if not all, of the problems and reasons outlined in the book that cause "active" managers (of Mutual Funds) to underperform the "passive" indexes.
Additionally, the era of "buy and hold" has come and gone. So, sure, an investor (a "do it yourselfer" or someone using a stock broker to help them pick stocks) can reduce their trading costs by buying a portfolio of individual stocks and sitting on them. Who, as an individual investor, wants to be stuck with the Enron's, the WorldCom/MCI's, the Global Crossing's, the Tyco's, etc. of tomorrow? The average individual investor typically does not have the resources and/or the time to do the in-depth research on each of the individual positions that they would need to hold in an account in order to achieve the required asset allocation needed to minimize risk. And, the average stock broker did not get their clients out of those stocks before they tanked.
The world has changed, and the SMA is the answer.
5 of 8 people found the following review helpful:
 Watch out!, 2004-10-04
Separate accounts are the darling of the investment industry. They are targeted at wealthy investors, and they charge significantly higher fees than mutual funds. Moreover, because the fees are billed as a percentage of assets they generate consistent income for money managers and brokers, in contrast to brokerage commissions which decline when investors stop trading in down markets. In other words: separate accounts are big earners for Wall Street.
This book, like others by authors including Freeman, advocates separate accounts, and in so doing runs counter to two widely accepted findings of academic finance: (1) active management fails to beat the market indexes, and (2) keeping costs (ie. fees) down has a dramatic impact on long term investment returns.
If you're going to read this book, make sure you read the myriad of arguments on the other side of the debate. (The debate is actually rather lopsided.) You can find material in book form or for free online. For the former, try works by John Bogle on mutual funds, William Bernstein on asset allocation and indexing, and Chandan Sengupta for a basic outline of the arguments for indexing. For the latter, try the material at ABetterWayToInvest which has a chapter on separately managed accounts.
2 of 6 people found the following review helpful:
 I'll never invest in a mutual fund again...., 2004-03-03
Clear and concise. Managed accounts used to be for the wealthy. Things have changed though...investors can get into a separate account for $25,000 or less. The Jury is in... there is no doubt that many money managers beat the indexs (the good ones). These guys are professional money managers NOT MARKETERS who sell for commissions. Consequently, this allows them to focus on what's important, managing assets. Further, after one calculates the true costs (including transaction costs) mutual funds are slightly more expensive than the average separate account manager. The problem with mutual funds is that they typically are required to invest a minimum of 75% of the investors assets at ALL TIMES! Remember 9-11? Who wants to be in full-on in the market then?! Separate account managers were able to flee the equities markets because they aren't bound by the "diversification" restrictions that mutual funds are. Stuff to think about....
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