WHAT ARE THE BENEFITS OF MANAGED TRADING ACCOUNTS?

There are numerous investment and business benefits of managed trading accounts. They have become increasingly popular among wealthy investors. Investors are provided with a great array of choices when it comes to investing in the financial market. However, there are a lot of uncertainties as well. This is why investors are advised to go with managed trading accounts. It lets them stay on top of their financial game while allowing them to explore more options. Here are some points to consider about your managed trading account:

  • Money managers cannot transfer funds from your account

  • Money managers cannot withdraw cash from your account

  • The managed trading accounts only have authority to place trades on your behalf

  • You control your account 100% of the time

  • Your managed trading account is 100% in your name

Let's jump right on to the main benefits.

#1 A Fiduciary looking out after your best interests

When the money manager is charging you a fee, they are required to work under a fiduciary standard of care. That means the money manager cannot cheat you in any manner. The fiduciary standard of care is more stringent than your sustainability standard, which is relevant to commissionable transactions. As per the Center for the Fiduciary Standard, money managers earning a fee have a fiduciary responsibility towards investors. Under the Investment Act of 1940, the money managers are held to legal standards. The money manager is legally required to place your interests before theirs, not mislead you, act with prudence, and avoid any conflicts of interest.

The Center for the Fiduciary Standard holds the money manager to the same level of care that lawyers and doctors have to give to their clients.

#2 Ongoing monitoring and rebalancing

Different investments come in and out of favor over time. Money managers proactively rebalance your accounts and monitor the market cycle to give you an added peace of mind that someone is looking after your money. In addition to that, don't consider that the manager dynamically approaching to rebalancing is just any marketing fluff. Depending on how your money manager rebalances, you can earn up to an extra 0.5% per year from the process, since investments are systematically sold high and bought low.

A managed trading account makes the process of rebalancing and monitoring simple, and with a professional money manager by your side, it won't eat up much of your time.

#3 Specialized management and oversight

Well, selecting individual bonds and stocks can be a time-consuming and research-intensive process. And if you have no market knowledge, you will end up having a bad investment. When it comes to managed trading accounts, the money managers are certified and trained to potentially do it, allowing you to find better investments.

It stands for no reason that you will benefit from the professional management of your funds and oversight of the complete selection and allocation of all the numerous funds as well. You would benefit from multiple layers of professional management and oversight using a managed, fee-based account approach.

#4 Greater Investment Access

Another benefit of having a managed trading account is that you control your funds. This means that you can control your deposit amount, and stop and start when you like. This is something that not everybody understands, especially the beginners. When you open a managed trading account, you control the amount of money you invest.

Although there are minimum account balance requirements, you control your initial deposit. Your money manager will go through all the paperwork to make you understand how it all works. You can start and stop any time you want. If you want to close your managed trading account, you need to discuss it with your money manager.

Final Words

Now that you know everything you need to know about managed trading accounts, it is time to give it a thorough review and start researching the best money managers and brokers to help you invest your money.

We have tried to cover every aspect regarding managed trading accounts. If you have any queries with respect to the topics discussed, feel free to ask.