Dimensional Fund Advisors, a global leader in systematic investing, today unveiled the firm’s expanded separately managed accounts (SMAs) offering, which broadens access to customized Dimensional investment solutions. Dimensional’s tech-enabled platform is at the forefront of a trend toward more personalized investment options that previously were often available only for seven- and eight-figure account minimums.
Discretionary accounts that allow investors to exclude select securities within broader strategies, SMAs have long been used by ultra-high-net-worth and institutional investors with unique holdings requirements. By lowering the typical separate account minimum from more than $20 million to $500,000, Dimensional is empowering financial professionals to offer flexible solutions to a broader set of individual investors.
The new SMA platform integrates hundreds of customization options for their clients, including preferences around tax management; environmental, social, and governance characteristics; and industry and security exclusions. The offering is intended to help financial professionals implement tailored solutions within well-designed, highly diversified, and cost-efficient portfolios.
With more than four decades of expertise applying financial science to investment solutions and more than 20 years managing SMAs, Dimensional brings deep portfolio-design and management capabilities to the firm’s expanded SMA solutions. Underpinning the new offering is a digital SMA Center, which was developed in-house in consultation with financial professionals to optimize user and investment experiences.
Key benefits of Dimensional’s SMA offering include:
- Systematic Pursuit of Higher Expected Returns: The firm’s SMA solutions are based on Dimensional’s core investment strategies—which begin with systematic tilts toward sources of higher expected returns (stocks with smaller market capitalizations, lower relative prices, and higher profitability)—rather than commercial indices that are often the starting point for direct-indexing products.
Delivering a Personalized Investment Experience: Dimensional’s SMA platform helps financial professionals tailor investments to an individual’s needs and human-capital considerations, allowing for flexibility with specific securities and sector holdings.
Multifaceted Tax Management: Dimensional SMAs apply a broad range of tax-management considerations to help investors improve after-tax returns while meeting income needs and identifying opportunities for charitable giving.
Thoughtful Incorporation of ESG Considerations: The SMA Center provides a transparent and intuitive set of environmental, social, and governance considerations that let advisors align their clients’ investments with their values.
An Efficient and Robust Approach to Proxy Voting: Depending on the options available through their client’s custodian, advisors can help clients select a proxy-voting policy that is most consistent with their preferences, including socially focused or sustainability-focused approaches.
Purpose-Built for Financial Advisors and Their Clients: Dimensional leveraged its deep relationships with financial professionals throughout the development of the SMA Center to accommodate design and functional preferences that make onboarding, launching, managing, and monitoring SMAs an easy and scalable process. Dimensional complements the digital SMA platform with a knowledgeable SMA solutions team to deliver a seamless investment experience.
“The future of wealth management will be marked by continued personalization of investments and client service,” said Dimensional Co-CEO Dave Butler. “Our expanded SMA offering is a natural extension of Dimensional’s investment process delivered in a customizable vehicle, and it furthers our aim to offer more choice in how financial professionals serve their clients.”
The expanded SMA offering is another example of Dimensional’s commitment to delivering the firm’s research-driven investment philosophy and rigorous implementation in different formats to meet unique needs. The digital platform allows advisors to implement customized portfolios for a greater number of investors at scale. By complementing a Dimensional SMA with Dimensional mutual funds or ETFs, an advisor can help address personal preferences while applying a consistent investment approach across an investor’s overall portfolio.