Gerard Michael, President of Smartleaf Asset Management, joined Keith Black, Managing Director of RIA Channel to discuss how advisors can better serve their clients with personalized and tax optimization services.
Smartleaf Asset Management offers a system that delivers automated personalization and tax optimization at scale, allowing advisors to offer unlimited services of this type to all clients regardless of their size. Rather than spending countless hours tediously reviewing, rebalancing, and trading client portfolios, advisors that leverage Smartleaf to automate those tasks have more free time to grow their business and converse with clients.
Tax loss harvesting and rebalancing can be especially valuable during times of market volatility, explains Michael. Advisors that are able to proactively communicate and execute tax loss harvesting opportunities during market drawdowns, demonstrate differentiated value to clients, build deeper relationships and are likely to increase wallet share.
While many firms specialize in financial planning, it might be difficult to measure the value added from this service quantitatively. However, tax savings are easily measurable and can lead to increased referrals from accountants and attorneys who recognize the value of the advisor and these services. Michael notes that one advisor calculated that 16% of all accounts saved more in taxes than they paid in fees over the entire time working with the advisor. The value added may increase for larger accounts, as that proportion of accounts saving more in taxes than they paid in fees rises to 90% on a dollar-weighted basis.