Merrill Lynch today announced the launch of a new report system that tracks and displays tax-loss harvesting information achieved through its Tax Efficient Management (TEM) Overlay Service.
Advisors can use the Tax Efficient Management (TEM) Potential Tax Savings Report to show their clients how much savings they have accumulated with the tax management strategy over a specific period of time, according to Jay Link, head of fiduciary programs and platforms for Merrill.
“We’ll be calculating the value of the losses that we realized on the client’s behalf and then, using the client’s tax rates, [we] will provide an estimate of how much in tax savings they’re realizing,” he said in an interview.
Three years ago, the New York-based firm began offering clients on its fiduciary platform Merrill One, the TEM Overlay Service at no additional charge. The overlay provides services such as tax-loss harvesting.
“What we attempted to do with these overlays is mitigate a lot of ... risk by using services like tax-loss harvesting and short-term gains deferral,” Link said. “Importantly, we want to systematize those services and take the burden off advisors and clients from having to do that themselves through ad hoc requests.”
As time goes on, the reports will become increasingly comprehensive, Link explained. Merrill plans to expand the data included in the reports to include the tax-loss harvesting investors realized in their accounts for all of 2024 and 2023, he said.
The reports will illustrate the savings in a dollar amount to make it easier for investors to grasp the impact tax-loss harvesting has had on their investments, Link said. Merrill anticipates advisors can use the reports in client meetings to demonstrate their overall investment performance.
The reports will be available through Merrill’s platform on the Client Review Center for no additional charge, according to Link.