While most fund managers with more than one client account maintain trade and expense allocation policies and procedures, the overlap in investment strategies of client accounts can often lead to acute conflicts of interest when making allocation decisions. This three-part series examines why the management of both a commingled fund and a managed account with the same – or similar – investment strategy presents conflicts of interest for a fund manager. This third article reviews the trade and expense allocation risks that can arise when investment managers make allocation decisions between a commingled fund and managed account client with the same or overlapping investment strategy and suggests several best practices for managing those conflicts. The first article explored the increased use of separately managed accounts by institutional investors; ways that separately managed accounts differ from single investor funds; and the general conflicts of interest that can arise for an investment manager when managing multiple client accounts. The second article analyzed how the enhanced transparency and liquidity rights typically retained by separately managed account clients, when compared to investors in the commingled fund, give rise to conflicts of interest for an investment manager and suggested several best practices for managing those conflicts of interest. See “Eight Bad Excuses Fund Managers Have Raised Trying to Avoid SEC Sanctions for Fee and Expense Allocation Violations and Undisclosed Conflicts of Interest” (Oct. 13, 2016); and our three-part series on fee and expense allocation practices: “Practices Fund Managers Should Avoid” (Aug. 25, 2016); “Flawed Disclosures to Avoid” (Sep. 8, 2016); and “Preventing and Remedying Improper Allocations” (Sep. 15, 2016).