Overlay manager in partnership with BMO’s Nesbitt Burns. Placemark Investments will provide the overlay management for Canadian brokerage BMO Nesbitt Burns’ unified managed account (UMA) platform. The new platform – the first of its kind in Canada, say Placemark and Nesbitt Burns – provides account-level Canadian and U.S. currency capabilities and French- and English-language support for advisor desktops.

“Clients have told us that they want a simpler way to manage their assets,” Sarah Widmeyer, managing director of Nesbitt Burns’ “Managed Assets” group, says in a press release. “Right now in this industry you need multiple accounts and investment vehicles to get a diversified solution.”

Some consider the UMA helpful in that regard because it provides reasonably broad allocation across different asset classes and styles, usually at lower investment minimums than it would take to secure similarly representative holdings in distinct accounts. A Nesbitt Burns UMA has an investment minimum of $121,400 – which comes to a nice round $150,000 in Canadian dollars.

Alphabet soup

The Money Management Institute (MMI), a Washington, D.C.-based an association of separately managed account (SMA) managers and sponsors, defines the UMA as “a single custodial account [that] has been created by one agreement, with the capacity to hold a wide variety of investment vehicles.” In addition, reporting to UMA owners “should be available in a single report with analysis for the total UMA as well as its sleeves.” The MMI also stipulates that “overall management” of the UMA must be assigned to an overlay manager, whose job – in the active sense of the term at least – is to rationalize duplication across the UMA while enhancing its overall tax efficiency.

Generally speaking, a UMA differs from a multiple-discipline account (MDA) by including not just different equity styles, but also different asset classes including “SMAs, [exchange-traded funds], hedge funds and other alternatives,” says Placemark CEO Lee Chertavian.

To confuse matters though, some players contend that an MDA can include fixed income without stretching the definition, while others say that the inclusion of a fixed income sleeve automatically makes it a UMA. “‘UMA’ has become the buzz word of the [SMA] industry,” says Chertavian. “So rather than change the product, some players just change the definition.”

In an attempt to resolve another UMA-inspired definitional dispute, the MMI has recently coined the acronym “UMH,” or “unified managed household,” to describe one-view reporting on a family’s taxable and tax-deferred investments, which can’t be included in a single registered account.

Next up?

Nesbitt Burns UMAs come in two flavors, “pre-configured model portfolios based on the input of specialist teams at BMO Nesbitt Burns and a] open-architecture offering that allows advisors to create completely custom portfolios,” according to a Placemark press release. In other words, investors can choose between an all-proprietary selection of managers and one that includes outside managers.

In addition to supporting U.S. and Canadian currencies as well as both of Canada’s official languages, Nesbitt Burns' platform can accommodate managers from both sides of the border, a must-have given Canadian investors’ liking for U.S. assets.

Though he emphasizes that Dallas and Wellesley, Mass.-based Placemark isn’t actively hunting for international partners, Chertavian figures the dual-currency and dual-language capabilities his firm helped craft for Nesbitt Burns could turn heads abroad. “We anticipate this will be the first of many international UMAs and investment management products we will develop,” he says.

Chertavian won’t say if Placemark’s next cross-border partnership will be with the Royal Bank of Canada’s (RBC) Dominion Securities unit, but it’s tempting to think so. Last year Placemark landed the overlay role on the UMA platform of RBC Dain Rauscher, RBC’s U.S. retail brokerage subsidiary. In addition, RBC Technology Ventures provides venture funding to Placemark.

Besides Nesbitt Burns and Dain Rauscher, Placemark’s UMA clients include Piper Jaffray, McDonald Financial Group, Janney Montgomery Scott and, in partnership with FundQuest, JPMorgan Chase.

Nesbitt Burns is part of Toronto, Ontario-based BMO Financial Group, still better known as the Bank of Montreal. –FWR

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