When it comes to finding ways to grow and scale their business, many advisors have found success using Unified Managed Accounts (UMAs). This simple investment solution features the ability to have multiple investments under a single account registration and is grounded in technology that automates trading, tax management, and more. Those efficiencies enable advisors to offer more personalization across client portfolios.
Advisors who are using UMAs are seeing real impact and tangible results: increased efficiency, more time to focus on clients and grow their business, added potential for customization through technology, and more streamlined and personalized experiences for clients. All at scale.
Yet, despite these advantages, some advisors are still hesitant to embrace UMAs. For these advisors, the concerns are largely centered around retaining control of their client’s trading and investment methodology. And some advisors simply avoid UMAs because they aren’t sure how to get started.
The good news is that, for each of these advisor concerns, there are clear and compelling UMA benefits that outweigh them. I sat down with Nick Penrose, Practice Solutions Consultant at Envestnet, to discuss how we are helping advisors turn their hesitation around UMAs into confidence.
Exploring Unified Managed Accounts pros and cons
Control
Objection #1: “I’ll lose control of my clients’ portfolios.”
Many advisors believe that using a UMA means relinquishing control over their client portfolios.
Reality: UMAs add control through automation.
The reality is UMA technology automates trading and rebalancing for advisors. But, as Penrose points out, automated trading can save advisors hundreds of hours annually, freeing up time to focus on client relationships and scaling their business.
At Envestnet, we’re in the final stages of making advisor-traded sleeves available within our UMA solution to give advisors even more precise control over client portfolios. This enhancement is expected to be fully rolled out within the next year, and will allow advisors to easily execute trades directly whenever they need.
Envestnet’s advisor-traded sleeve strikes a balance between efficiency and autonomy, which modern advisors value.
Personalization
Objection #2: “My investment philosophy doesn’t fit a UMA.”
Many advisors who actively manage their client portfolios feel that their clients expect them to be an investment expert, applying their own methodology to select the investment strategies within those portfolios. According to Natixis, 59% of advisors use their own investment models because it allows them to tailor portfolios to specific client needs and interests.1
Reality: UMAs support both custom and third-party models, enabling scalable personalization.
For many advisors, using third-party models as a basis for their approach makes more sense and is more scalable than building custom models for each and every client. Part of the challenge comes with having the time and resources to perform the necessary due diligence on every individual strategy.
When it comes to picking investment strategies for their clients, we suggest advisors consider whether they consistently:
- Select investments that outperform the relative benchmarks
- Provide alpha for clients
- Are profitable in the process
In my experience, when advisors are managing custom portfolios for their clients, the amount of time and effort needed to do so effectively makes them far less profitable than if they leveraged a technology, like a UMA, to do it for them. Advisors mired in portfolio building and execution have little time left to spend on building deeper relationships with clients or providing additional wealth services that their clients need, which in turn, impacts the profitability of their entire business.
Penrose frames this issue as philosophical rather than purely financial. “Many advisors equate their professional worth with stock selection and portfolio control, so handing over part of that process can feel uncomfortable,” he says.
For comprehensive investment research, consulting, and portfolio management with a wide range of models built on that philosophy, advisors can leverage Envestnet PMC. Envestnet’s UMA features vetted strategies and models that not only streamline compliance but also enhance scalability and succession planning.
Efficiency is essential for advisor progress. For firms thinking about the future, UMAs package portfolios in a standardized, repeatable way, making businesses easier to sell, transition, or grow.
Cost
Objection #3: ”UMAs are too expensive.”
When it comes to the cost of UMAs, pricing objections often arise, not because UMAs are too expensive, but because advisors compare the costs to legacy programs they’ve used without accounting for their broader value.
Reality: The value of UMAs lies in the time saved, efficiency gained, and business growth enabled.
The key is to shift the conversation from price to productivity and understand the full value of the UMA. UMAs automate tasks that can typically consume hours, such as trading, rebalancing, and compliance documentation. This frees up advisors to focus on things like client engagement and strategic planning. When advisors frame UMAs as an investment in efficiency and growth, not a line-item expense, the value of UMA becomes crystal clear.
“When advisors frame UMAs as an investment in efficiency and growth, not a line-item expense, the value of UMA becomes crystal clear.”
Nick Penrose
Practice Solutions Consultant, Envestnet
Complexity
Objection #4: “It’s too complicated to get started.”
Many advisors feel overwhelmed by the UMA platform’s sophistication and assume they’re on their own to figure it out. This paralysis by analysis is one of the biggest barriers to UMA adoption. It’s not a technical issue, it’s a mindset issue.
Reality: Envestnet offers hands-on support to guide advisors every step of the way.
The reality is Envestnet provides an entire ecosystem of guidance behind the scenes. With an expansive team of support and service specialists dedicated to assisting advisors, Envestnet is ensuring that help is never more than a call or message away.
We realize that advisors may not be aware of the full service and support that’s available to help them optimize the way they do business. But we have a whole team here who can act as your guide. You won’t go it alone, because they understand the platform, they understand your business, and they can help you tap into the UMA technology to elevate the way you do business.
“Paralysis by analysis is one of the biggest barriers to UMA adoption. It’s not a technical issue, it’s a mindset issue.”
Kipp Cormier
Principal Director, Advisor Sales & Practice Solutions, Envestnet
The bottom line about UMAs
UMAs are much more than an advisor efficiency tool. They are a future-ready solution that helps advisors deliver better client experiences. By consolidating multiple products into a single account and simplifying reporting, advisors can offer clients a cleaner, more streamlined and transparent view of portfolios to their clients. Plus, UMAs enable personalization features, such as tax management and direct indexing, that are automated and scalable.
Features like tax-efficient trading and wash-sale mitigation can help advisors reduce surprises for clients. Plus the automated rebalancing happens seamlessly, so clients get clarity and advisors get capacity.
As Penrose says, “Clients don’t hire advisors for the mechanics of trading—they want someone who can focus on life goals, family priorities, and long-term financial planning. UMAs enable that shift toward deeper, more human advice.”
When advisors take the time to understand what UMAs offer for both their clients and their business, they will find one of the most powerful tools available for building scalable, future-ready practices.
Discover more about the benefits of Envestnet Unified Managed Accounts.
