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.

Tags:

Investing

Share:

Copy link to clipboard

Related articles

Your guide to understanding investment fees

Review the different types of fees related to investing and how to find out what you’re getting for the fees you’re paying.

Continue reading

Market psychology: What is behavioral finance, and how can it affect your investing decisions?

Our investing decisions can be affected by natural biases—it’s all part of human behavior. Learn what behavioral finance biases are and how you can account for them when you invest.

Continue reading
Find an advisor or banker

Disclosures

Start of disclosure content

Investment and insurance products and services including annuities are:
Not a deposit • Not FDIC insured • May lose value • Not bank guaranteed • Not insured by any federal government agency.

U.S. Wealth Management – U.S. Bank is a marketing logo for U.S. Bank.

Start of disclosure content

U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

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.

U.S. Bank does not offer insurance products but may refer you to an affiliated or third party insurance provider.

U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.

Equal Housing Lender. Deposit products are offered by U.S. Bank National Association. Member FDIC. Mortgage, Home Equity and Credit products are offered by U.S. Bank National Association. Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice.

Start of disclosure content

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.