Held-away assets

Held-away assets are client assets an advisor can see and advise on but does not custody or directly manage — most commonly workplace retirement accounts such as a 401(k).

The most common case

A workplace retirement plan. The client cannot move it while employed, the advisor cannot trade it directly, and for many households it is the largest single investment account they own.

Why ignoring it breaks the advice

Allocation is a property of the whole household balance sheet. A managed account built without reference to a large held-away account is being built against incomplete information, and the two can easily duplicate the same exposure.

How firms deal with it

Some advise on it without executing, giving the client instructions to implement. Some use services that trade held-away accounts under limited authority. Some account for it in the allocation and manage around it.

Each approach carries different operational and regulatory implications, and the choice should be deliberate rather than default.

Whether it counts in AUM

Generally not, unless the firm has discretion. That is one of the reasons firm-to-firm comparisons of AUM are less comparable than they look.