Difference between FBO and an Omnibus Account

An Omnibus account and an FBO (For Benefit Of) account are different, though they share some similarities in that they both involve managing funds for multiple beneficiaries. Understanding their differences and similarities is crucial:

Omnibus Account

  1. Definition: Manages funds or investments for multiple clients but under a single account.
  2. Usage: Typically used by investment firms or financial institutions for managing investments.
  3. Transparency: The individual identities and investments of clients are not disclosed to external entities.
  4. Record-Keeping: The financial institution maintains detailed records internally to distinguish each client’s holdings or funds.
  5. Control: The managing institution has control over the account and makes decisions on behalf of clients.

FBO Account

  1. Definition: A trust account set up by a third party, where funds are held “For the Benefit Of” specific beneficiaries.
  2. Usage: Often used in scenarios like payroll processing, where funds are temporarily held before being distributed to the intended recipients.
  3. Transparency: The beneficiaries are usually clearly identified, and the funds are designated for their specific use.
  4. Record-Keeping: The account holder keeps records to ensure that funds are properly allocated to each beneficiary.
  5. Control: The account holder is typically a custodian, holding the funds until they can be lawfully disbursed to the beneficiaries.


  • Both manage funds for multiple parties.
  • Require meticulous record-keeping to ensure proper allocation of funds.


  • Purpose: Omnibus accounts are more investment-focused, while FBO accounts are used for holding and disbursing funds to beneficiaries.
  • Transparency and Control: Omnibus accounts have less transparency regarding individual client details to external parties, whereas FBO accounts have clear beneficiary details.
  • Account Management: In an Omnibus account, the institution often actively manages the investments. In contrast, an FBO account is more about holding and disbursing funds as per instructions or legal requirements.

In essence, while both account types involve managing funds for multiple individuals or entities, they serve different purposes and operate under different frameworks. Omnibus accounts are more about collective investment management, while FBO accounts focus on holding and disbursing funds to specific beneficiaries.

This page was last updated on December 3, 2023.

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