A technology-enabled tax overlay management programme was recently introduced by Callan Family Office, a registered investment adviser that works with ultra-high net worth families, family offices, foundations, and endowments throughout the United States.
The programme’s goal is to optimise after-tax returns for affluent families.
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As opposed to outsourcing portfolio implementation to outside asset managers who only have a limited understanding of clients’ assets, the platform gives Callan Family Office’s investment partners the ability to make customized, tax-aware trading decisions in client portfolios.
With CFO investment partners using close observation of each family’s overall financial situation to deliver a customised solution for equity portfolio management, clients have more control over the size and timing of capital gains taxes in their portfolios and outcomes are enhanced across complex ownership structures.
The Tax Overlay Management Programme combines direct indexing, a household-level view of assets, and model delivery of third-party active approaches to boost trading across the numerous active and passive Separately Managed Accounts (SMAs) that make up a typical multi-generational UHNW portfolio.
In addition to this, the programme may assist UHNW families and family offices in the following ways:
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By GlobalData- Greater control over capital gains: Model delivery of active strategies gives Callan Family Office portfolio managers greater control over when and how capital gains are realised, while direct indexing accounts can be leveraged to make active strategies more tax efficient.
- Lower investment expenses: The programme reduces costs for both active and passive management by reducing third-party trading and implementation expenses.
- Multi-Account and Entity Optimisation: Coordinating activity across multiple accounts and entities adds value by identifying tax efficiencies that are not visible when accounts are viewed in isolation.
This option has been implemented by Aris Investing LLC’s technology, which drives the Tax Overlay Management Programme with advanced portfolio optimisation, scalable and secure infrastructure, and the tools required to customize portfolio outcomes for ultra-high-net-worth individuals.
Aris is a customizable investing technology platform that allows Callan Family Office to satisfy the unique requirements of its UHNW clients.
Daniel Burke, investment partner at Callan Family Office stated: “Aris solves the challenge wealthy families face when rebalancing accounts with complex ownership structures and a mix of active and passively managed SMAs. By utilising its technology, we can optimize portfolio transitions by managing the transfer of highly appreciated securities between direct indexing accounts and active strategies to avoid triggering taxable events. Additionally, we can directly employ tactical tax-loss harvesting and optimal tax lot selection during portfolio transitions, minimising capital gain impacts when changing active managers or rebalancing manager allocations.”
