Ultimately, if tax efficiency is important to you, then you'll need to consider that when selecting separate account managers. The same issue applies to customization of separate accounts. Some managers more than others allow investors to tailor their securities selection, particularly the larger the account. For example, investors sitting on large amounts of company or industry stock might be able to direct the money manager to steer clear of those stocks in order to better diversify their overall portfolio. That's difficult to do through mutual funds.
Separate accounts can have other drawbacks.
Moreover, the smaller the size of your account, the more difficult it is to buy enough different stocks to obtain adequate diversification. Shifting from a variety of mutual funds into one or two separate accounts will likely dramatically reduce diversification. Fees are another issue. Fees through brokerage firms generally have come down to around two percent, though that's still higher than the average mutual fund fee, and it may not always include transaction costs. It's possible to find separate accounts with fees one percent or less.