CHICAGO, Sept. 29, 2021 /PRNewswire/ -- Envestnet
| PMC (PMC) announces the rollout of its Fund Strategist Tax
Management Service, enabling financial advisors to seamlessly
manage the tax consequences of fund strategist portfolio (FSP)
accounts, in either third-party manager or proprietary home office
mutual fund and exchange-traded fund (ETF) models, in accordance
with their clients' investment goals. The new offering applies to
all model portfolios available through Envestnet's Fund Strategist
Network, consisting of more than 140 strategist firms and over
2,000 portfolios.
"For many investors, capital gains taxes are the largest expense
in their portfolios. Our Fund Strategist Tax Management Service
makes it easy to manage capital gains tax liability for clients
invested in fund strategist portfolios all year long, in an
automated and continuous way," said Erik
Preus, CFA, Managing Director of Envestnet | PMC.
"With this offering, we have addressed the tax-related headwinds
traditionally associated with outsourcing
advisor-as-portfolio-manager accounts to third-party institutional
managers. Now, instead of having to liquidate account holdings
right away upon investing in an FSP, regardless of the tax
consequences, we can help advisors potentially manage their
clients' tax costs according to individual investment
goals."
PMC's Fund Strategist Tax Management Service, powered by an
integration with Aladdin technology to help advisors optimize
portfolios, calculates the potential tax implications of adding the
service either to an existing account, or moving client assets from
an existing portfolio to a new model portfolio, on the Fund
Strategist Network, based on three possible levels of tax
sensitivity. Depending on the selected tax-sensitivity
level—Moderate, High, or Very High—the service will estimate
tracking error to recommend trades that would balance a client's
tax cost with portfolio risk.
"Tax management is a key value-add for helping investors achieve
financial well-being," said Venu
Krishnamurthy, Co-Head of the Aladdin Wealth Tech business
at BlackRock. "We are glad to see a pioneer like Envestnet meet
critical advisor needs for at-scale personalization using the
Aladdin platform's powerful engines."
Beyond the initial model purchase, the Service provides ongoing
value by managing to the client's tax sensitivity. When the model
manager modifies an FSP's asset allocation or underlying funds, it
may require the client to sell some holdings in their FSP account
to buy others, leading to the possible realization of taxable
gains. As part of this Service, PMC will evaluate the tax cost of
executing those adjustments against other possible trades, and
their expected tracking error, and may make trades that differ from
the model if they reduce the client's realized gains and are
appropriate based on the client's indicated tax-sensitivity
level.
The Fund Strategist Tax Management Service was developed in
response to feedback PMC has received from advisors. While many of
these advisors want to move more client assets into model
portfolios, they are often prevented from doing so because their
clients hold low-cost-basis individual equity or mutual fund
shares. The high tax bills resulting from transferring these
holdings to model portfolios would be detrimental to clients, often
causing their advisors to forego the broader benefits that model
portfolios can bring to their practice and clients in the long
run.
"Managing a client's portfolio while ignoring tax liabilities
can derail an otherwise sound investment strategy," said Dana
D'Auria, CFA, Co-Chief Investment Officer of Envestnet.
"Across the Envestnet organization, we are committed to
providing tax-managed solutions that help advisors create a
hyper-personalized, holistic wealth management experience where
capital gains taxes can be managed throughout the year, and
mitigated in line with every client's specific circumstances and
goals."
Envestnet | PMC, which has more than 15 years of experience
focusing on tax-efficient investing, automates Tax and Impact
Overlays for more than $10 billion in
client assets at more than 100 firms, as of June 30, 2021. To learn more about PMC's Tax
Overlay Services, including the Fund Strategist Tax Management
Service, please contact PMCOverlayServices@envestnet.com.
About Envestnet
Envestnet refers to the family of
operating subsidiaries of the public holding company, Envestnet,
Inc. (NYSE: ENV). Envestnet is transforming the way financial
advice and wellness are delivered. Our mission is to empower
advisors and financial service providers with innovative
technology, solutions, and intelligence to make financial wellness
a reality for everyone. Nearly 108,000 advisors and more than 6,000
companies—including 17 of the 20 largest U.S. banks, 46 of the 50
largest wealth management and brokerage firms, over 500 of the
largest RIAs, and hundreds of FinTech companies—leverage Envestnet
technology and services that help drive better outcomes for
enterprises, advisors, and their clients.
For more information, please visit www.envestnet.com, subscribe
to our blog, and follow us on Twitter (@ENVintel) and LinkedIn.
For more information on Envestnet | PMC, please visit
www.investpmc.com.
Through a holding company subsidiary, BlackRock, Inc.
("BlackRock") owns a non-controlling interest in Envestnet's parent
company, Envestnet, Inc. (NYSE: ENV).
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.
Clients 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.
Media Contact:
Dana
Taormina
JConnelly for Envestnet
973.647.4626
envestnetpr@jconnelly.com
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SOURCE Envestnet | PMC