An investment account that is owned by an individual investor and looked after by a hired professional money manager. In contrast to mutual funds (which are professionally managed on behalf of many mutual-fund holders), managed accounts are personalized investment portfolios tailored to the specific needs of the account holder.

Whether you refer to them as "individually managed accounts" or "separately managed accounts", managed accounts have gone mainstream. To understand why they have such a strong appeal to affluent investors, consider the history of professional money management. Think back to the robber barons. Those industry titans made their money in heavy industry and then hired professional money managers to oversee their wealth. Likewise, large pension plans, endowments, and other institutional investors have often entrusted their assets to professional moneymanagement firms. With minimum investment requirements of $1 million, the services of these money managers have historically been well out of reach of the average investor.