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Finance: What is an Omnibus Account? 111 Views
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Description:
An omnibus account is an investment account in which a collection of investors have invested their capital to own a pro rata share of that cooperative investment. Either that, or it’s a lot of buses.
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Transcript
- 00:00
Finance a la shmoop. What is an omnibus account?
- 00:06
Herbi just eats leaves, Carni just eats meat, Omni well it's pretty much [Different buses eating stuff]
- 00:12
everything. So yeah an omnibus as in bus-i-ness or business account services is
- 00:18
a bunch of investors who've all pitched in or wired in their capital to become a
- 00:22
percentage owner of that omnibus account. Why would people do this? Scale, volume,
Full Transcript
- 00:28
discounts size, heft. When you have a lot of money in an account basic things like [Lots of money in a suitcase]
- 00:34
audit and legal fees and brokerage services and the fees with them and
- 00:38
other one-off costs get amortized across a lot of people in dollars invested [Definition of Amortization]
- 00:44
rather than being laid entirely or solely on one investor where they can
- 00:49
then be a meaningful percentage of the total and with an omnibus account you [Bus labelled Omni eating leaves]
- 00:53
also get anonymity since it's a broker dealing in street name with the account [Anonymity stamp]
- 00:58
interfacing with the street well investors can live if they want in the
- 01:02
lovely dark shadows of Erewhon. Omnibus accounts are sort of like your own [Full moon in a dark sky]
- 01:08
custom mutual fund without the whole nav, net asset value stamp requirements at
- 01:13
the end of each trading day and all the other regulations and filings and legal
- 01:17
crap needed for publicly offered securities it's like having a fully [Book labelled my very own omnibus account]
- 01:21
gassed up bus with a working GPS and Waze system you can drive anywhere you [Guy sat on a bus]
- 01:26
want on the investing landscape you don't have to tell anyone outside of
- 01:29
your own partners about it, and it works great as long as you all want to eat the
- 01:34
same kind of financial cooking.. [Omni asking Carni if he is going to finish his food]
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