How do separately managed account programs differ from mutual funds?
Mutual funds pool your money and invest in stocks, bonds and other securities on behalf of all the individual shareholders, who have similar investment or financial goals. The shareholders jointly own the fund's investments, and each share represents an equal percentage of ownership in the fund's assets. The fund's share price is the market value of the securities held - less any fees, expenses, and liabilities incurred by the fund - divided by the total number of shares.

The cost of a mutual fund can vary considerably depending on its investment type (equity, fixed income or international securities) and structure (load or no-load). However, when estimating the cost of a mutual fund, you need to consider transaction costs, custody fees, distribution and marketing costs and service fees for the fund manager.

Separately managed account portfolios, in contrast, are separate securities personally owned by individual investors. When you participate in these portfolio programs, you may benefit from a number of services not offered by mutual funds, such as:

• Investment Policy Statements: In our program, for instance, we generate a written Investment Policy Statement based on your stated financial objectives, and we deliver it to your selected investment manager.
• A portfolio tailored to your needs: We create a customized portfolio addressing your individual needs, as identified in the Investment Policy Statement.
• Due diligence: You may not have the time or inclination to research and identify the right funds or investment managers. We provide the initial search and due diligence, then continue to monitor your manager for you.
• Performance reporting: You receive independent reports, including comparisons to appropriate benchmarks and to your financial objectives. Our Basic and Specialized separately managed account programs offer quarterly performance reports in addition to monthly statements.

Why can't I go to an investment manager directly?
You can. However, with more than 30,000 investment managers in the U.S. today, it could be difficult for you to find the most appropriate manager. The one that achieves the best performance results may not be the best for you; that manager may, for instance, take more risk than you are willing to tolerate. In addition, more seasoned investment managers often have higher account size minimums. And not all management firms are willing to provide personalized attention or address clients' individual needs.

Our programs give you direct contact with the investment manager. The manager uses your Investment Policy Statement (Basic SMA program only) to manage the client's portfolio according to stated objectives.

I thought my Financial Advisor was a professional investment manager.
You and your Financial Advisor work as a team, strategizing your investments. Once your decision is made, your professional investment manager handles your transactions and research needs. This lets you and your Financial Advisor concentrate on your long-term investment plans.

What is dollar-cost averaging?
Dollar-cost averaging involves investing a set amount of money in a mutual fund or security at regular intervals, regardless of price fluctuations. This investment strategy can help you buy more shares when prices are lower and fewer shares when prices are higher; it can provide a more beneficial average share cost and alleviate some of the impact of market fluctuations. This strategy neither ensures a profit nor protects against losses in declining markets. Before you invest, you should consider your ability to continue investing in down markets.

Why is there a $100,000 minimum account size for some programs?
The efficiencies of money management work most effectively at or above that asset level. It is very difficult to create adequately diversified portfolios with fewer holdings.