Wealth Management
Investors’ demand for tax-efficient investing is fueling rapid growth in separately managed accounts (SMAs), which now top $500 billion in tax-managed assets—up 67% since 2022. Unlike mutual funds or ETFs, SMAs allow investors to directly own securities, enabling personalized tax management such as loss harvesting.
Direct indexing remains the most popular strategy, but providers are expanding into active equity and fixed-income SMAs to capture additional tax alpha. Challenges arise with active managers, since balancing loss harvesting with stock-picking discipline can dilute investment ideas, though new approaches like substitute stock lists aim to resolve that.
Fixed-income SMAs offer fewer opportunities, but rising rates in recent years did create harvesting potential, while model portfolios are also integrating tax-aware transitions to ease client moves without triggering large gains.
Finsum: Overall, tax-managed SMAs are expanding across asset classes and portfolio models, giving advisors more tools to reduce investors’ tax burdens.
MarketAxess Holdings has launched Axess IQ Connect, a new web-based platform giving wealth managers and private banks real-time access to fixed-income market data. The tool enables advisors to connect with trading desks, monitor liquidity, and view AI-powered bond pricing through CP+, all from any device.
It builds on the company’s Axess IQ system, adding features like interactive watchlists and optional order management for client trades. MarketAxess, which serves about 2,100 firms worldwide, continues to expand its electronic trading and data solutions for the fixed-income market.
The company recently reported stronger-than-expected earnings for Q2 2025, though shares slipped as Jefferies lowered its price target while maintaining a Hold rating.
Finsum: Data and new technology offerings can help advisors better serve their clientele.
Derivative income ETFs, built around covered call strategies, have surged in popularity as investors seek higher yields. These funds generate income by selling call options on stocks or indexes, with the trade-off being limited upside potential during strong market rallies.
Yields can vary widely depending on how aggressively options are written, with higher payouts often signaling greater risk. The largest products in this space track benchmarks like the S&P 500 and Nasdaq, though smaller providers have introduced sector and single-stock versions.
While income potential is attractive, investors should weigh opportunity cost, since these strategies often trail the broader market over time.
Finsum: With interest rates likely to fall, option premiums, and thus fund income, may decline, but yields remain compelling compared to traditional dividend ETFs.
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Independent financial advisors switching broker-dealers increasingly want an easy transition, product flexibility, and strong support for growth. Consolidation in the industry has narrowed the pool of broker-dealers, pushing many advisors to consider RIA firms for greater freedom and fewer compliance burdens.
Still, many advisors remain with BDs to retain transactional business alongside fee-based growth, making hybrid models attractive. Technology like DocuSign has lowered barriers to moving, allowing advisors to transition books of business more quickly and with less disruption.
Competition for top talent is fierce, with broker-dealers offering higher transition payouts and low-cost platforms to attract advisors.
Finsum: While RIAs continue to grow rapidly, BDs aren’t going away but must evolve to meet advisor demands or risk falling behind.
Copper prices rose about 2% Wednesday after Freeport-McMoRan warned of major production losses from the suspension of its Grasberg Block Cave mine in Indonesia following a deadly mud rush.
Operations remain halted after two workers were killed and five remain missing, cutting Q3 copper and gold sales by about 4% and 6% versus prior estimates. The impact will be harsher in Q4, with PT Freeport Indonesia’s copper and gold output expected to be negligible compared with forecasts.
Looking ahead, 2026 production could fall 35% below prior projections, with a full return to pre-incident levels unlikely before 2027. Freeport expects its Big Gossan and Deep MLZ mines to restart later this year, while Grasberg’s phased ramp-up begins in 2026, and it has declared force majeure with insurance recovery capped at $700 million.
Finsum: The disruption at one of the world’s largest copper mines comes as global supplies remain tight, further lifting copper prices.
The IRS and Treasury finalized Secure 2.0 rules on catch-up contributions for 401(k) and similar plans, which apply to workers age 50 and older. Beginning in 2027, those earning more than $145,000 from their current employer must make catch-up contributions on a Roth (after-tax) basis, though some plans may implement the change as early as 2026.
Until then, investors can still choose between pretax and Roth contributions if their plan allows. Experts say now is the time to work with advisors to run multi-year tax projections to determine whether to accelerate pretax contributions before the rule takes effect or embrace Roth sooner.
For 2025, contribution limits rise to $23,500 with an additional $7,500 catch-up for those 50+, and workers ages 60–63 can make a “super catch-up” of $11,250.
Finsum: The key takeaway, according to advisors, is not to sit on the sidelines as the new rules approach, but instead actively plan for the transition.