In managing your client’s portfolios, there are numerous tax-related scenarios that require monitoring throughout the year. Your firm’s ability to monitor and set alerts for tax-related transactions dramatically improves the efficiency in managing your client’s overall portfolio tax-efficiency. The AdvisorPeak platform addresses tax analysis across client portfolios in these specific instances:

Tax-loss harvesting/reversals-

For clients who have taxable portfolios, tax-loss harvesting is essential. Realizing both short and long-term losses can offset realized capital gains or capital gains arising from mutual fund distributions and other transactions. 

Another essential aspect of tax-loss harvesting is ensuring wash sale rules are not violated. It’s important not to buy back into a security from which you’ve already harvested tax losses for a client within the 31-day window on either side of the transaction.  Proactive monitoring of gains and losses and setting alerts based upon user defined criteria enable advisors to leverage the tax loss harvesting opportunity the alert identifies.

Short to long-term gains-

Matching and monitoring short and long term capital gains ensures that loss harvesting will result in the most tax efficient strategy for your clients. In addition tracking short to long term gain transitions helps to improve planning.

Raising funds to meet a cash need-

Clients can have various cash needs throughout the year. Perhaps college tuition or a tax payment is coming due. Your ability to monitor the tax status of client accounts helps to direct which securities from these accounts should be considered for sale to meet the cash need. 

If the client is in a position where they have realized capital gains, you may want to consider selling a security with a loss to offset these gains and improve the client’s tax position for the year. Knowing when gains or losses are long or short will help match the same types of gains and losses where possible.

Dividend and capital gains distributions

Alerting when clients will be receiving dividends, and capital gains distributions can help with tax planning. You can quickly examine your client’s holdings to see where tax losses may occur to offset dividends’ tax impact and capital gains distributions. This alert feature is especially useful when capital gain distributions are short-term gains.

At AdvisorPeak, we have created a platform that enables advisors the ability to manage portfolios with a creative and advanced tax- analysis. Tax efficiency is one of the most important aspects of portfolio management for RIA firms, and especially clients. Please contact us for an informational demo of our tax analysis and alert features.