According to data from the financial technology platform 55ip, a record number of financial advisors are taking advantage of tax-loss harvesting opportunities for their clients. Data from its platform revealed that across client portfolios through Q3, the 2022 YTD tax savings benefit for model portfolios of ETF and mutual funds was 2.99%. Going back to 2020, the annualized tax savings across clients in model portfolios on their platform was 2.82%. The tax savings illustrates the value of ongoing tax loss harvesting within client portfolios throughout the year, compared to those not harvested for tax losses. 55ip, which is a wholly owned subsidiary of J.P. Morgan Asset Management, offers advisors trading and rebalancing capabilities, in addition to automated, personalized, and optimized tax outcomes. Paul Gamble, Chief Executive Officer of 55ip stated “The growth of model portfolios is one of the fastest growing trends in asset and wealth management, but concerns about the tax implication of transitioning and managing client accounts have been a major barrier to broad use by advisors. Volatile markets can be emotionally and financially challenging for investors, but our data indicates they can also present potential opportunities for meaningful benefits from a tax perspective.”

Finsum:Based on data from 55ip’s platform, a record number of advisors are implementing tax loss harvesting in their clients’ model portfolios.