# Unified Managed Household Account (UMHA): Overview, Pros and Cons

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## What Is a Unified Managed Household Account (UMHA)?

A unified managed household account (UMHA) is a privately managed account that consolidates multiple unaffiliated products including mutual funds, ETFs, and individual securities. This type of account allows immediate family members, such as parents and children, to access the account.

A unified managed household account allows for ease of administration for the financial institution, along with greater transparency for the investing family.

### Kay Takeaways

*   A unified managed household account (UMHA) combines unaffiliated investment products, such as securities and mutual funds, into a single account.
*   A UMHA allows multiple immediate family members to access the same account.
*   The firm at which the account is held will designate an account manager who is responsible for rebalancing the account so it continues to meet the clients' risk tolerance and goals.
*   Pros of a UMHA include streamlined management, lower fees, and simplification.
*   Returns from a UMHA will depend on the success of the account manager in rebalancing and otherwise managing the held assets.

## Understanding Unified Managed Household Accounts (UMHAs)

Unified managed household accounts (UMHAs) operate on a single, integrated system. This system allows a financial advisor to view various assets and product types to create performance reports. In some UMHA programs, clients can create account groups for each investment goal. The system supports groupings with individual performance reports, billing, and statements.

The asset management firm where the UMHA is located will designate a central relationship manager for large families that have accounts located in different parts of the business. Often, UMHAs are discretionary programs; this means the account's financial advisor has the authority to make investing decisions. As with mutual-fund advisory programs, the investor selects a model based on risk tolerance and goals, and the firm takes care of [rebalancing](https://www.investopedia.com/terms/r/rebalancing.asp) or even changing asset allocations altogether, depending on the degree of discretion inherent in a particular program.  

## Pros and Cons of a UMHA

Consumers should be aware of both the advantages and drawbacks of consolidating accounts into a UMHA.

Pros

*   Transparency
    
*   Streamlined management
    
*   Lower fees
    
*   Simplification
    

Cons

*   No private accounts
    
*   Success depends on management
    

### Pros Explains

*   **Transparency**: Since this account offers complete transparency, all family members with access to the account can gain a deeper understanding of their assets.
*   **Streamlined management**: Because all the securities, mutual funds, and ETFs held by a household are managed through one account, investors have an opportunity to earn better risk-adjusted and tax-managed returns due to comprehensive oversight, execution, and reporting.  
*   **Lower fees**: Investors can reduce the number of fees they must pay since all their assets are held in a single account. Fee discounts may be available based on your household’s assets under management.
*   **Simplification**: [Financial advisors](https://www.investopedia.com/terms/f/financial-advisor.asp) can customize investment decisions for each client in the context of their household, which simplifies operational procedures that may otherwise be complex and cumbersome. UMHAs also streamline paperwork and allow for more sophisticated tax management.  
    

### Cons Explained

*   **No private accounts**: A UMHA combines access and assets; if you want private investments or anything to be held by a single household member, you will need a separate account.
*   **Success depends on management**: A UMHA's performance will depend largely on the account manager's success in selecting securities and making adjustments to the [allocation](https://www.investopedia.com/terms/a/assetallocation.asp). Investors should be selective when choosing the firm that will manage their UMHA.  
    

## Who Should Open a Unified Managed Household Account?

A unified managed household account is often most appropriate for high-net-worth individuals with a complex financial picture. They are most likely to benefit from combining their disparate assets into a single account, especially for the purposes of wealth management and tax planning.

## What Are the Fees Associated With a UMHA?

Investors with a UMHA will typically pay an annual or quarterly fee; this fee is usually a percentage of their total assets under management (AUM). This fee will vary depending on the institution at which the account is held and may decrease as assets under management increase.

## What Are the Tax Benefits of a UMHA?

Because all a the account holder's investments are held in a single account, the account manager can make investment decisions that maximize returns while minimizing the investor's tax burden. This can streamline tax planning and reduce the amount of taxes the investor ultimately owes.

## The Bottom Line

A unified managed household account (UMHA) combines multiple unaffiliated investment products, into a single managed account. It can hold assets such as securities, ETFs, and mutual funds. Multiple immediate family members can access the account. This structure allows for streamlined management, lower fees, and simplified paperwork and tax management.

Because a UMHA is a managed account, it will have an account manager who is responsible for rebalancing the assets in the account to ensure that it continues to meet the account holders' long-term goals and risk tolerance. The returns generated by a UMHA largely depend on the skill and success of this account manager, so investors should carefully choose the firm at which they plan to open a UMHA.