Originally published in ThinkAdvisor | by Jeff Berman | March 20, 2020
Tech tools can be used to help clients offset volatility
Tax efficiency technology offered by fintech firms can be handy tools for advisors to use with their clients amid the tremendous volatility we are seeing these days in the stock market, according to executives from Orion Advisor Services, LifeYield and MyVest interviewed by ThinkAdvisor this week.
A bear market like we’re in now, with extreme volatility, is where tax management strategies and tools shine.
Excerpts from the full article below:
MyVest portfolio management solutions, were “built to help enterprise-level firms deliver personalized portfolios at scale,” according to Anton Honikman, its CEO. “This includes automating the daily monitoring, rebalancing, trading, and reporting on holistic multi-account portfolios that the advisor can customize for each client,” he explained.
The current volatility has created “opportunities” from unrealized tax losses, especially with portfolios that need to now be rebalanced, he told ThinkAdvisor.
MyVest offers a “comprehensive approach to tax management,” as well as asset location and “smart” short-term gain deferral, he said. The “scalable technology part” of what MyVest and the other firms are offering is “really valuable in today’s highly volatile market,” he noted, explaining:
“The ability to scale portfolio management best practices through automation helps advisors stay on top of all their portfolios, plus avoid overlooking things like wash sales and deferring short-term gains.”
Asked whether he was seeing more tax-loss harvesting activity since the start of this bear market, he replied: “It’s still early days in learning from our customers what’s driving their higher trading activity. Drivers can be a combination of rebalancing portfolios back to target, model portfolio and investment strategy changes, tax management and investors’ liquidity demands,” he noted.
Read the full article on ThinkAdvisor.