As baseball legend Yogi Berra said, “It’s déjà vu all over again.”

My colleague Harry Bartle embraced separately managed accounts (SMAs) early on, as I did. He sold SMAs by positioning them as a customized, tax-efficient way to own comparable funds with the advantage of harvesting tax gains and losses.

“With a mutual fund, you get a tax bill,” Harry said, recalling what he told advisors. “With an SMA, you own the securities and can harvest losses!”

Today, we know there are multiple levers to push and pull to achieve tax alpha and better financial results. Tax harvesting is only one of those levers.

We’re also evolving financial advice from the practice of managing individual products to coordinated, multi-account management with the goal someday of household-level portfolio management. 

An important way to move down that path is multi-account UMAs.

Multi-Account UMAs: The Bridge To Household Management
As executive vice president of LifeYield, Harry works with the country’s largest financial firms. Here’s what he sees:

“Financial planning does a great job assessing clients’ investing timelines, goals and risk tolerance. From there, advisors increasingly look to implement models that suit their clients’ needs. 

“Meanwhile, we know asset location is the best way to improve tax efficiency. And UMAs are the backbone for most advisors today.”

Harry suggests that firms implement an asset location API on top of their UMA platforms to amplify tax efficiency.

“Firms don’t have to rip out their ‘plumbing’ because an API call from their planning system is easy to implement,” Harry said.

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