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Key takeaways

  • An agency account allows you to remain the principal of your investment account, with an investment manager making portfolio decisions on your behalf.

  • Types of agency accounts include individual, joint-owners, corporate entities and trusts.

  • You can authorize your investment manager to have sole discretion in making investment decisions, or you can choose to be part of the decision-making process.

If you want to invest but don’t want to spend time researching individual stocks or moving your holdings as the markets change, you may want to consider an investment agency account.

 

What is an agency account?

An agency account is a type of investment account that allows an investment manager to make portfolio decisions on your behalf, based on your broadly stated investment goals.

As the principal of your account, you still have control, but you no longer need to deal with the day to day of investing. You might want to consider this approach if you find the efficiency and expertise of it appealing.

 

Types of agency accounts

There are four types of agency accounts:

  • In an individual account, assets are held in the name of an individual. This option best suits people who don’t share finances with a spouse or family member.
  • In a joint-owners account, assets are held in the name of one or more owners. This type of account is often used by married couples or by parents and their minor children.
  • In a corporate entities account, assets are held in the name of an entity. This approach is often used by a limited partnership or a limited-liability company.
  • With trusts, the principal or principals serve as the trustee. Trusts are often used on behalf of minors or incapacitated individuals. However, spouses can form a revocable trust, naming each other as trustees and giving each full access to the account.

 

How an agency account works

Managing investment assets can be time consuming and complex. An investment manager can help simplify the process. Potential benefits include:

  • Easy management of cash through a variety of money-market cash sweep vehicles.
  • One convenient statement and fee.*

An investment manager may be given one of two forms of authority in making investment decisions:

  • A management agency, in which you authorize your investment manager to have sole discretion in making investment decisions based on a predetermined investment plan. You’ll be notified after decisions are made, but this setup allows the investment manager to act quickly in responding to market shifts. If you decide to alter your investment plan, you can work with your investment manager to change strategies at any time.
  • An advisory agency, in which you and the investment manager have shared discretion. Under this arrangement, the investment manager consults with you before executing each trade, allowing you to remain involved in the decision-making process. In practice, this results in an account that feels very similar to a traditional brokerage account. The trade-off is the time it takes to obtain your consent before executing trades.

 

Managing investments is not a task that suits everyone. Contact a wealth specialist if you feel you may benefit from the support and professional oversight of an agency account.

*For more information, please request a copy of the U.S. Bank Investment Management Fee Schedule.

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Investing
High net worth

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The information provided represents the opinion of U.S. Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

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