Managed Account

Written By
Paul Tracy
Updated June 12, 2021

What is a Managed Account?

A managed account is an investment account in which a financial advisor or other kind of money manager is responsible for managing in the best interests of a client or beneficiary.

How Does a Managed Account Work?

Let's say John Doe opens a managed account with Jane Smith, who is a financial advisor. The account has $3 million of assets. Because the account is a managed account, Jane Smith is responsible for ensuring that the assets are invested according to John's wishes. Jane Smith might hold cash, assets or title to property for the benefit of John Doe. Her job is to appropriately manage the assets in the account and ensure that they are disbursed in the best interests of the client. This means that Jane Smith can buy and sell without prior approval from John Doe.

Why Does a Managed Account Matter?

Managed accounts involve fiduciary duty, which is one of the most revered and powerful aspects of the financial world. Fiduciary duty requires a person to act in the best interest of his or her clients, and when a named fiduciary does not do so, the consequences can involve civil or even criminal penalties.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Managed Account.
Be the first to ask a question

If you have a question about Managed Account, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Managed Account, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Managed Account

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms