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What is a separately managed account (SMA)?

A professionally managed portfolio where you own every security directly, in your own account.

Sep 21, 2026 | 6MIN

Author

Vise

Return

What is a separately managed account (SMA)?

A professionally managed portfolio where you own every security directly, in your own account.

Sep 21, 2026 | 6MIN

Author

Vise

Return

What is a separately managed account (SMA)?

A professionally managed portfolio where you own every security directly, in your own account.

Sep 21, 2026 | 6MIN

Author

Vise

In this article

How an SMA works

What sets an SMA apart

SMA vs. mutual fund or ETF

SMA vs. UMA

Minimums and fees

Who it's for

How Vise approaches separately managed accounts

How an SMA works

A separately managed account (SMA) is a portfolio of individual securities you own directly, managed by a professional to a set strategy. Unlike a mutual fund or ETF, where you hold a share of a pool, an SMA holds the securities in your own name, which allows customization and security-level tax management.

You open an account in your own name at a custodian, the firm that holds the assets, and a professional manager buys and manages securities in it according to the strategy you choose. Because the holdings belong to you rather than to a shared fund, you can see every position at any time and, within the strategy, set preferences or restrictions on what the account holds.

What sets an SMA apart

Direct ownership changes what the account can do, in three ways:

Transparency

You see every security and its cost basis, not just a single fund price.

Customization

You can exclude companies or sectors, apply values-based screens, or tilt the portfolio, all within the manager’s strategy.

Tax management

Because each security is held individually, losses can be harvested at the security level to offset gains, which a single fund share can’t do.

SMA vs. mutual fund or ETF

In a mutual fund or ETF, you own a share of a pool alongside everyone else, and you can inherit the fund’s capital-gains distributions at year-end even if you only just bought in.

In an SMA, you own the securities directly, so you’re taxed only on the transactions in your own account, and the portfolio can be tailored to your situation. The trade-off is that a fund is simpler and usually cheaper.

SMA vs. UMA

An SMA runs a single strategy. A unified managed account, or UMA, holds several strategies (different SMAs, funds, or asset classes) as sleeves inside one account, managed together.

Minimums and fees

SMAs have traditionally required higher minimums than funds, often in the six figures, because building an individual portfolio takes more securities and oversight. Technology has since lowered those minimums considerably. Fees are usually charged as a percentage of the assets managed.

Who it’s for

An SMA generally fits investors who want direct ownership, the ability to customize a portfolio, or tax management they can’t get from a pooled fund, particularly those in taxable accounts and higher tax brackets.

Direct Indexing is one of the most common equity SMAs, and bond ladders are a common fixed-income version.

How Vise approaches separately managed accounts

Vise, which manages investment accounts for financial advisors, delivers everything it manages as separately managed accounts: Direct Indexing, municipal and Treasury bond ladders, and a tax-aware Long Short strategy. Three things distinguish the approach:

Managed at the security level

Because every position is owned directly, Vise’s optimizer works lot by lot: harvesting losses, honoring each client’s restrictions, and weighing taxes on every trade it proposes.

No account is traded in isolation

SMAs in the same household are coordinated: before any trade, wash-sale checks run across every account sharing the client’s tax ID.

Sleeves in one account

Several strategies can run side by side as sleeves of a single unified managed account, with harvesting that works across the sleeves rather than stopping at each one’s edge.

Direct ownership creates the opportunity, not the outcome. An SMA gives its manager openings a pooled fund never has: a loss to harvest here, a restriction to honor there, a choice of which shares to sell when raising cash. Whether those openings become after-tax value depends entirely on how the account is managed.

That is why Vise checks every account, every day, at current prices. Every potential trade is weighed in one optimization, against taxes, risk, and the client’s restrictions, before it is placed. The structure creates the openings; acting on them every day is what captures the value.

See how Vise delivers Direct Indexing and fixed income as separately managed accounts.

Learn More

1. Capital losses offset capital gains — IRS Topic No. 409, Capital Gains and Losses (IRC § 1211(b)). https://www.irs.gov/taxtopics/tc409

2. A fund's capital gain distributions are reported as long-term capital gains "regardless of how long you owned your shares in the mutual fund or REIT" — IRS Publication 550, Investment Income and Expenses, "Capital Gain Distributions"; IRS Topic No. 404, Dividends and other corporate distributions. https://www.irs.gov/publications/p550 · https://www.irs.gov/taxtopics/tc404

Vise AI Advisors, LLC ("Vise") is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of Vise by the Commission. Third party logos are property of their respective owners and are not affiliated with Vise. The information set forth herein is intended to be informational in nature and is not intended to be investment advice. Please consult with a qualified professional advisor for advice specific to your situation. All investing involves risk, including the risk of loss of invested principal. Past performance is not an indicator of future results.

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1 Vise "Platform Assets" encompasses assets actively managed by Vise as well as assets that Vise aggregates, monitors, and uses to generate customized proposals. As of 6/1/2026.
2 This calculation is based on total realized losses as of 12/15/25 and assumes a long-term capital gains tax rate of 20% and a short-term capital gains tax rate of 41%.
3 Source: Cerulli Associates, U.S. Asset and Wealth Management Edition, 2021

Images and graphs on this page are for illustrative purposes only. Does not represent actual client results. Past performance does not guarantee future results.

Tax-Loss Harvesting Disclosures

Vise AI Advisors, LLC (“Vise”) is an SEC-registered investment adviser. The material presented is for informational purposes only and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Nothing on this website should be construed as personalized investment advice, which can only be provided in one-on-one communications.

Investing in securities involves risks, including the potential loss of money, and past performance does not guarantee future results. Historical returns, expected returns, and probability projections are provided for informational and illustrative purposes and may not reflect actual future performance.

Product images shown are for informational and illustrative purposes only and may not reflect how they will appear within the product. Third-party trademarks and service marks referenced are the property of their respective owners.

The portfolio built for your biggest client.
For every client.

Book a Demo

Product

Resources

Company

521 Broadway
New York, NY 10012

+1 201 375 3969

Form ADV

Form CRS

Images and graphs on this page are for illustrative purposes only. Does not represent actual client results. Past performance does not guarantee future results.

Tax-Loss Harvesting Disclosures

The portfolio built
for your biggest client.
For every client.

Book a Demo

Product

Resources

Company

521 Broadway
New York, NY 10012

+1 201 375 3969

Form ADV

Form CRS

Images and graphs on this page are for illustrative purposes only. Does not represent actual client results. Past performance does not guarantee future results.

Tax-Loss Harvesting Disclosures

What is a separately managed account (SMA)?

What is a separately managed account (SMA)?

What is a separately managed account (SMA)?

How an SMA works

What sets an SMA apart

Transparency

Customization

Tax management

SMA vs. mutual fund or ETF

SMA vs. UMA

Minimums and fees

Who it’s for

How Vise approaches separately managed accounts

Managed at the security level

No account is traded in isolation

Sleeves in one account

See how Vise delivers Direct Indexing and fixed income as separately managed accounts.

The portfolio built for your biggest client.For every client.

The portfolio built for your biggest client.For every client.

The portfolio builtfor your biggest client.For every client.

The portfolio built for your biggest client.
For every client.

The portfolio built for your biggest client.
For every client.

The portfolio built
for your biggest client.
For every client.