Investing in Separate Accounts

Rating:
Summary: Don't believe the naysayers, this is the best
Review: I have heard and read about the booming separate account (aka wrap account) market, but until now I have not been able to find any books on the subject. I am glad to now finally have something to "sink my teeth into". [In sharp contrast, a search for books about "mutual funds" on Amazon.com produced "585 results"!]

Davidson and Freeman do an excellent job of sharing their wealth of knowledge on the subject of separate accounts while O'Connell brings his superb writing skills to create a very lucid book. Such readability is a rare quality for investment-related tomes in my opinion. (b/t/w - I've also enjoyed some of O'Connell's other books such as "CNBC Creating Wealth" and "401k Millionaire"). The book even has a certain "tongue in cheek" humorous facet which brought a smile to my face from time to time (last time I remember that happening with a personal finance book was when I read "The Wealthy Barber").

A worthy read.

Rating:
Summary: Best book explaining mutual funds and separate accounts out
Review: I've read this book and it expained the differences between separate accounts and mutual funds very clearly. Especially with the scandal in mutual funds it is obvious it is better to be personally managed than to be part of a school of fish. One reviewer of this book ranted about the separate accounts industry, but did not recognize this book addressed many of the issues he raised. He, unfortunately, is angry at a manager and took it out on the industry. That is like buying a bad carton of milk and considering the entire dairy industry is spoiled.

Separate accounts are without a doubt the best way to get personalized financial service without the worries. Just keep in mind, use reputable managers and follow the advice of this book.

Enjoy!

Rating:
Summary: Be Careful!
Review: Separate accounts are the darling of the investment industry. They are targeted at wealthy investors, and they charge significantly higher fees than mutual funds. Moreover, because the fees are billed as a percentage of assets they generate consistent income for money managers and brokers, in contrast to brokerage commissions which decline when investors stop trading in down markets. In other words: separate accounts are big earners for Wall Street.

This book advocates separate accounts, and in so doing runs counter to two widely accepted findings of academic finance: (1) active management fails to beat the market indexes, and (2) keeping costs (ie. fees) down has a dramatic impact on long term investment returns.

If you're going to read this book, make sure you read the myriad of arguments on the other side of the debate. (The debate is actually rather lopsided.) You can find material in book form or for free online. For the former, try works by John Bogle on mutual funds, William Bernstein on asset allocation and indexing, and Chandan Sengupta for a basic outline of the arguments for indexing. For the latter, try the material at ABetterWayToInvest which has a chapter on separately managed accounts.

Rating:
Summary: Don't believe the naysayers, this is the best
Review: This book does a great job disspelling the myths put out by mutual fund lackeys who so greatly fear separate accounts. For example, it powerfully and accurately demonstrates that the total cost of funds (with trading, advice, loads, unrealized cap gains, and management fees of which many are never disclosed)is typically higher than separate accounts (which typically have a fully-disclosed bundled fee). The naysayers fail to recognize the fee trends and discounts prevalant in the industry today that make separate accounts more than competitive. Further, the "index" crowd ignores three facts demonstrated in this great book:

1. Separate Accounts offer index options if investors want them,
2. Index returns lagged active managers significantly in the recent bear market, and
3. There is no perfect index to follow so they're not the panacea they're made out to be.

This book overall addresses and overwhelms the simplistic arguments against separate accounts. When used in the proper context, separate accounts are superior in every respect. They also are immune from the manipulation suffered by funds that has been so well documented in recent months due to their high level of transparency.

I highly recommend this book to anyone who wants to get a fair review of investment options. This work should not be ignored.

Rating:
Summary: Excellent Explanation
Review: This book is an easy-to-read explanation of the Separate Accounts industry. After reading this you'll ask yourself, "Why am I throwing money away at mutual funds?" This is a must read for anyone interested in improving their financial net worth!