Vestmark’s long history of maintaining tax-lot-level detail within multiple “sleeves” for a single client means that we are uniquely positioned to optimize tax outcomes.
When you’re transitioning the assets of an inbound client, we can implement solutions designed to minimize taxes in several ways, such as by identifying unrealized tax losses or mapping a portfolio of individual securities into one or more index-like portfolios.
Vestmark’s Overlay Management Service seeks to identify and capture tax optimization opportunities and eliminate tax inefficiencies by finding the best execution of a particular trade across a client’s entire portfolio.
Overlay management can also improve outcomes when rebalancing accounts that have strayed from their target allocations. By executing tax-optimal sales and attempting to recognize offsetting tax losses when taking gains, Vestmark seeks to improve the after-tax performance of portfolios.
Maintaining tax-lot-level detail within a portfolio of SMAs presents opportunities to capture tax losses as they materialize. Vestmark uses tax-lot-level accounting to accelerate tax-loss recognition and defer capital gain recognition for a better after-tax experience. Harvested tax losses can offset realized capital gains elsewhere in a portfolio, potentially improving the after-tax performance of a client’s entire account.
Major life events can either inject new funds into a portfolio or require a distribution of funds. Vestmark can tax-optimize these events to match a client’s needs in a range of scenarios, such as diversifying a concentrated position, making a significant charitable donation, or funding the purchase of a vacation property.
For added flexibility, accounts can be opened with cash or transferred-in assets, with funds set aside as a tax reserve at the client’s discretion.
But many advisors may not be aware of the differences between after-tax reporting standards of the CFA Institute and the requirements of the IRS. We outline key things that advisors should keep in mind when discussing such projections with clients.
VAST’s extensive investment platform is comprised of tools to address diverse client goals.
Implement personalized tax management strategies, accommodate unique objectives and apply client-driven security screens and exclusions.
Gain more time to deepen client relationships, sharpen your competitive edge and grow your business.
There are several investment-related risks associated with tax loss harvesting. There is potential that the tax loss harvesting may:(i) negatively affect the overall performance of an investor’s portfolio; and (ii) result in a temporary overweight and/or underweight of certain sectors, securities, and/or cash in an investor’s portfolio that influences performance, and VAS will not consider any other account that the investor may have. Tax-loss harvesting involves the risks that the new investment could perform worse than the original investment and that transaction costs could offset the tax benefit. VAS may repurchase securities after the end of the tax loss “wash sale” period at a price higher than that for which they were sold. Securities sold for the purpose of tax loss may or may not be repurchased by VAS following the 30-day wash sale period. VAS cannot prevent wash sales that may occur in other accounts besides the account to which the tax loss harvesting was applied. Furthermore, VAS cannot prevent wash sales that may occur due to investor or financial advisor requests that impact trading in the account.