Paul and his father wrestled with issues of tax-smart investing and decumulation, including as his father, who lived to 94, was aging and found himself with much of his wealth in highly appreciated stock.
Subsequently, as his in-laws aged, Paul dug into what strategy to use to minimize capital gains taxes on the appreciated stock after one member dies (set up a separate account for the appreciated stock so it steps up at the first death).
Realizing that these and other problematic tax issues were impossible for most investors and advisors to handle manually, Paul committed to developing tax-minimizing, risk-managing, multi-account software.
“You need software for everything because everything depends on the exact numbers,” Paul said.
Paul said that risk management is complicated by the many investors with concentrated positions, such as in the technology sector. Guiding their investment choices to spread risk is another uphill task advisors have.
“So, if you look at what challenges clients present to advisors, there’s really a wide variety,” he said. “And the advisor needs … to be able to tell a simple story to clients so they can agree to follow his or her recommendation—and continue to do so when their friends suggest, ‘I have this great advisor who visits me on Nantucket.’”
Jack Sharry is the EVP and chief growth officer of LifeYield and host of the WealthTech on Deck podcast. He is on the board of Next Chapter, a leadership community dedicated to improving retirement outcomes.