Three levers affect investor outcomes—cost, risk and taxes—and of those, the most influential is taxes. At LifeYield, we have more than $2 trillion in client assets under administration. We consistently observe that investors are half as tax efficient as they could be.
Suppose people have been saving and investing industriously. They could see a significant rise in their taxes if they (with your help) haven't been using tools in your arsenal for multi-account asset location, rebalancing, tax harvesting and—for those in retirement—tax-efficient withdrawal sequencing and income sourcing.
Failing to focus on the tax effects of investment activities can cost investors hundreds of thousands of dollars over their lifetimes. Mainstream investors like your clients need help understanding the lifetime cost of taxation and how you can help them increase their returns by saving money on taxes.
WIN was a bust in part because it expected consumers to solve a macroeconomic problem by saving more of their money and spending less on goods and services. With tax-wise advice, you’re showing investors how not just to weather inflation but also how to thrive. And that’s a double-win.
Paul R. Samuelson is the chief investment officer and co-founder of LifeYield.