Clearstead Advisors, a Cleveland-based private wealth manager, has partnered with Boston-based Smartleaf Asset Management, an SEC-registered RIA, which will provide direct indexing, tax-optimization and other services for the portfolios Clearstead manages.
While most providers only offer such services for a sleeve of the portfolio, Smartleaf offers it for the entire portfolio, according to Gerard “Jerry” Michael, president of Smartleaf Asset Management.
“Tax and risk are properties of the portfolio as a whole, not of a sleeve,” he said. “This is a portion of the portfolio and we’re going to manage it holistically, [which] should lend to higher after-tax expected returns [and] lower overall dispersion of returns.”
Clearstead handles the selection of funds for the portfolio along with investment guidance; Smartleaf will incorporate any client conditions with the portfolio such as ESG or religious preference, Michael said. It will also implement tax optimization on a daily basis, along with tactical asset allocation, re-balancing, and other actions, he added.
The partnership will allow Clearstead advisors to spend more time with their clients, the companies said.
“Our clients ... are firms that have chosen to move beyond product performance or trade-oriented value propositions,” Michael said. “We see our job [as] to free up that advisor to have 100% of their day to deal with prospects and clients, but with the option to have unlimited personalization and tax optimization.”
The partnership will allow Clearstead’s advisors to focus more on the value-added aspects of their job, including nurturing client relationships, business development, and getting the right asset allocation, said Aneet Deshpande, chief investment strategist at Clearstead.
Smartleaf launched in 2020 with about $350,000 in assets and has grown to where it is anticipating crossing the $20 billion mark in assets under management within the next year, according to Michael.