Tax management for financial advisors
Uncover opportunities that can enhance client outcomes and differentiate your practice with tax management services designed to lower tax bills and optimize investment returns.
The importance of holistic wealth management tax strategies
No longer just a separate service handled by tax professionals, tax planning has become an integral part of comprehensive wealth and investment management. Clients, especially high-net-worth investors, expect advisors to address their unique tax situations alongside their investment goals. By delivering personalized tax strategies that aim to optimize long-term outcomes and making tax planning part of every financial decision, advisors can elevate their practice and establish themselves as true wealth partners.
More than 90% of ultra-high-net-worth investors
expect their wealth manager to provide tax planning and estate transfer advice. Yet less than 25% report receiving these services.1
Make tax management a year-round strategy
While many factors affecting portfolio performance are beyond an advisor's control, taxes aren’t necessarily one of them. That’s why year-round wealth management tax planning is critical. Instead of waiting until end of year to evaluate tax implications, advisors need to take an always-on approach to address market shifts and clients’ changing goals. From strategic rebalancing during market downturns to timing asset sales around major life events, proactive advisors can minimize tax drag throughout the year by capitalizing on tax-saving opportunities as they arise.
Line break
Strategies to manage the tax burden and maximize returns
Unified managed accounts
By consolidating SMAs, mutual funds, ETFs, and individual securities into a single brokerage account, UMAs help simplify management and make it possible to integrate tax-smart strategies at scale.
Tax-loss harvesting
Selling an investment at a loss for the purpose of offsetting capital gains can be an effective tool in managing an investor’s current tax liability under existing tax laws.
Direct indexing
With direct indexing, investors essentially create their own index fund, but by investing in the stocks directly, which can provide distinct tax advantages over conventional mutual funds.
Tax-advantaged and tax managed accounts
Tax-advantaged accounts like a traditional IRA, Roth IRA, and 401(k) work alongside tax-managed accounts to help investors optimize their overall tax strategy and manage tax liabilities under current tax laws.
Line Break
Make tax management your competitive edge with Envestnet
Taxes can be a client’s biggest expense – but they don’t have to be. An always-on approach that leverages tax overlay can make a significant difference. With Envestnet’s Tax Overlay, advisors can deliver ongoing tax support, customized for each client’s unique tax needs, preferences, and goals. Once preferences are set, our service continuously monitors the client’s portfolio, tracking year-to-date gains and identifying opportunities to offset them through tax-smart trades.
Let's talk!
Partner with Envestnet to deliver tax-smart wealth management
Envestnet insights
-
Guide
Fundamentals of Tax-Loss Harvesting
Tax-loss harvesting is the intentional selling of portfolio positions at a loss for the purpose of offsetting capital gains and managing an investor’s tax liability. Review our guide on tax-loss harvesting
-
Guide
Guide to Holistic Tax Management
In this guide for financial advisors, we will explore how a holistic tax overlay may be used to manage equity portfolios in taxable accounts.
-
eBook
Tax Planning Strategies for Retirement
More than 90% of ultra-high-net-worth investors expect their wealth manager to provide tax planning and estate transfer advice, while ONLY 25% answered that they are actually receiving that service.
-
On-Demand Webinar
Holistic Tax Management: What are Advisors Missing?
Advisors have full plates, and client tax planning plus tax-loss harvesting take significant time. This session shows solutions to proactively manage taxes and deliver active, holistic tax management.
1Source: CEG Insights (Spectrem Group) 2023 Report
Disclosures
The information, analysis, and opinions expressed herein are for general information only. Nothing contained in this document is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Investing carries certain risks and there is no assurance that investing in accordance with the portfolios or strategies mentioned will provide positive performance over any period of time. Investors could lose money if they invest in accordance with the portfolios or strategies discussed herein. Past performance is not indicative of future results.
Neither Envestnet, Envestnet | PMC™ nor its representatives render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor. Client must carefully determine if the use of tax overlay services is appropriate for their circumstances, risk tolerance, and investment objectives. Tax management services are limited in scope and are not designed to permanently eliminate taxes in the account. In providing tax overlay services, Envestnet will allow Client's account to deviate from Client's selected investment strategy. Client's account may experience significant performance differences from the selected investment strategy due to Client's selection of tax overlay services. Envestnet makes no guarantee that the account's performance will be within any range of the selected investment strategy or the strategy´s benchmark. If Client subsequently disables tax overlay services this may result in the recognition of significant capital gains.