WealthTech on Deck Tax-Efficient Strategies for Maximizing Investor Returns with Martin Cowley
Taxes are a reality for all investors. Their effects can significantly affect financial outcomes and take a big bite out of investment returns. In response, advisors look for strategies that minimize tax liabilities while maximizing returns. As tax alpha may be the holy grail for many investors, what investment strategies can they use to maximize their financial outcomes?
In this episode, Jack talks with Martin Cowley, Executive Vice President of Product Development at LifeYield. As one of the pioneers in building UMH solutions in the industry, Martin is an expert at building platforms across the wealth management ecosystem. At LifeYield, Martin and his team focus on finding the client's unique circumstances and then determining the best way to serve them.
Martin talks with Jack about five ways to achieve tax alpha through a comprehensive advice platform. He discusses how these strategies work and how advisors utilize them to help clients reach their financial goals.
Key Takeaways
- [01:11] - An overview of Martin's key role at LifeYield.
- [05:58] - Tax harvesting as a means of improving tax alpha.
- [08:40] - How single-account management differs from coordinated multi-account management.
- [11:38] - The importance of asset allocation when it comes to taxes.
- [19:04] - How rebalancing and income generation can work together.
- [21:16] - What asset allocation and rebalancing can do for income sourcing.
- [28:53] - Martin's three key takeaways.
- [31:30] - What Martin likes to do outside of work.
Quotes
[10:16] - "The fact that you can see multiple tax lots across more than one account gives you more room for efficiency. It gives you more tax lots to pick from." - Martin Cowley
[17:53] - “Tax harvesting is good, it's a part of our toolkit. But asset allocation does mitigate the need for tax-loss harvesting, especially considering it dissipates over time.” - Martin Cowley
[18:42] - "A transition from an existing set of assets over to a new model can be made a lot more efficient by putting controls on gain realization and potentially breaking up the move over a year or more depending on what works for the clients and their appetite for taxes." - Martin Cowley
[29:07] - "Tax harvesting is well-established and it's a vulnerable exercise, but it's more valuable when you spread it across multiple accounts to the extent that you can." - Martin Cowley
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