Schwab and Morgan Stanley push managed accounts into awkward territory

Morgan Stanley has added tender offer and interval funds to its Select UMA Program. Charles Schwab is recruiting a director to build a long-short separately managed account business. The moves, reported by FundFire and The Daily Upside, are incremental. Yet together they nudge the managed account wrapper into a historically awkward zone: strategies with liquidity constraints or short exposure.

Schwab's job posting describes a role that would assemble a long-short SMA team and coordinate it companywide. Schwab did not respond to questions about the search, including whether the position has been filled, according to The Daily Upside. The search is a bet that long-short strategies can find a retail audience inside a separate account, where shorting and its collateral demands add operational weight.

Morgan Stanley's Form ADV disclosure shows the firm adding tender offer and interval funds to the closed-end mutual funds available on its Select UMA Program. Those vehicles offer periodic rather than daily liquidity, a structure that fits assets that do not trade on an exchange. The expansion lands as Morgan Stanley's advisory platform tops $3 trillion in assets, per FundFire.

Both moves are aimed at the same problem. Advisors want institutional-grade strategies inside an account structure that handles billing, tax management, and rebalancing. The big platforms are responding by stretching what an SMA or UMA can hold. Cerulli expects retail SMA assets to reach $3.6 trillion this year. The next round of platform competition may turn on how well firms manage strategies that do not trade every day.