Tax Personalization, Values-Based Portfolios and the New HNW Advice Model

High net worth clients expect more personalized advice across their full financial life. So, to break it all down for me and to hear about the trends, I'm joined by Michael Fetherling. Michael, thanks so much for sitting down with me.

Thrilled to be with you this afternoon. — So, let's talk about tax management a little bit because it's obviously table stakes at this point when it comes to high net worth clients, but most advisors aren't necessarily delivering it the way they should that truly feels individualized and like they're adding value. What does genuine tax personalization look like and how can Invest at help advisors?

Yeah, I think that the personalization of our tax management comes out through our long-term gain budget declaration. So, think about delivering personalization at scale. So, we like to have advisors build UMA models and use them over and over.

That creates efficiency. You can then apply a tax overlay on top of those accounts and then personalize it by meeting with the client, establishing what your annual gain budget is, and the algorithm is going to, you know, non-stop aggressively look to harvest short-term losses to eliminate short-term gains. You will receive that long-term gain agreed upon budget every year.

And that's an important distinction that we do because our tax optimization capability personalized as it is, as important I think it can keep going in perpetuity. Where some of the, you know, great competing managers in the industry that do this type of tax optimization, they may do aggressive realization to eliminate gains period, and you get to a a trade lock state. So, we we chose to avoid short-term gains cuz they're taxed at the highest level, establish that long-term gain budget, which is consistent with your annual financial plan, and then let the optimization framework give you that gain target, but we will harvest losses above and beyond and as we can.