Don't Expect Special Attention With 'Separate Accounts'

If you've got half a million dollars lying around, financial advisers have a hot investment product to sell you: a separate account. But it might not be worth the money you pay for it. Long the province of the ultrarich, separate accounts sound exclusive. But as investment minimums have dropped in recent years, so has the level of personalized attention.

A separate account is a customized portfolio of stocks and bonds, often set up by one of the major brokerage houses but run by outside money managers. The accounts typically require an investment of $500,000 or even less, down from minimums of $1 million or more as recently as four years ago.

Because they're made up of individual securities, separate accounts claim to offer tax-planning advantages that mutual funds can't provide. That explains much of their appeal to well-heeled investors. ...