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Form ADV Part 1A Item 5K(1) · Answer type: yn · Item 5 - Separately Managed Accounts
Item 5K(1) asks whether the firm has regulatory assets under management attributable to clients other than those listed in Item 5.D.(3)(d)-(f) (separately managed account clients). This identifies RAUM attributable to the non-pooled client categories covered by Item 5K.
The excluded client types in Item 5.D.(3)(d)-(f) are investment companies (mutual funds, ETFs), business development companies, and other pooled investment vehicles (hedge funds, private funds). Separately managed account (SMA) clients represent all other advisory clients - individuals, families, businesses, institutions, and other entities with direct advisory relationships.
“Separately managed account clients” is the Form ADV label for the non-pooled clients included by this question. The label does not prove that every account receives customized holdings, tax work, or individualized service.
5K(1) serves as the gateway question for Item 5K, which explores specific practices for separately managed accounts including borrowing transactions, derivatives usage, and custodian concentration. A Yes answer leads to additional questions about SMA management practices.
The distinction determines whether the firm completes the additional Item 5K questions about borrowing, derivatives, and custodian concentration for these assets.
Firms report Yes when they have RAUM in the client categories covered by the question. A No means the firm does not report such RAUM under this item.
5K(1) - Do you have regulatory assets under management attributable to clients other than those listed in Item 5.D.(3)(d)-(f) (separately managed account clients) (Yes / No).
This is the first question in Item 5K, "Separately Managed Account Clients." A Yes leads to the detailed SMA-specific disclosures that follow.
5K(1) identifies whether the firm reports RAUM for clients outside the listed pooled categories. It does not establish customization, tax management, individual attention, or operating experience.
However, 5K(1) does not indicate the quality of individualized service, minimum account sizes, customization options actually offered, or fees charged for separately managed accounts. These details vary significantly among firms serving SMA clients.
The answer also does not predict investment performance, client satisfaction, or service levels. Some firms excel at SMA management while others may provide better value through pooled vehicle approaches depending on client needs and firm capabilities.
The answer should not be used by itself to decide whether the firm fits an individual investor.
Yes
The firm reports regulatory AUM attributable to separately managed account clients. On Best Investors, find Item 5K on the firm's ADV panel and confirm 5K(1) is Yes. Review individual portfolio management services separately because the two answers measure different facts.
Continue reading 5K(2)-(4) for additional information about the firm's SMA practices including borrowing, derivatives, and custodian concentration that might affect your account management.
Review the firm's total regulatory AUM and client counts as separate reported measures.
No
The firm reports No and does not report RAUM attributable to the clients covered by 5K(1). Review Item 5D and Item 5G for the client categories and services the firm reports before drawing a business-model or client-fit conclusion.