SMArtX update helps smooth out tax drag in SMAs

SMArtX Advisory Solutions, a turnkey asset management platform provider with a focus on managed accounts, has introduced a new tool aimed at enhancing tax efficiency for financial advisors.

The firm’s newly unveiled SMArtX Transition Analysis Tool is designed to help advisors transition client accounts to new investment models with minimal tax impact.

SMArtX serves a diverse clientele from across the wealth industry including RIAs, broker-dealers, asset managers, custodians, and fintech companies.

“Our goal with the Transition Analysis Tool is to support the modern advisor who seeks to enhance their clients’ financial well-being while scaling their business,” Jonathan Pincus, CEO of SMArtX, said in a statement.

The SMArtX Transition Analysis Tool simplifies the complex process of transitioning portfolios. By leveraging automation and customization capabilities, the tool cuts the need for manual calculations, mitigating risks of human error and allowing advisors to focus on client service and business growth.

By comparing clients’ current holdings with new investment models, the new tool pinpoints opportunities to preserve existing positions and reduce unnecessary selling.

The tool can also generate custom scenarios that take into account specific financial goals while aligning them with a defined tax budget.

SMArtX also highlighted its new tool’s automated tax-aware selling capabilities, which helps enable the automatic liquidation of legacy positions within specific tax parameters.

“Our mission is to equip advisors with the next-gen tools needed to excel in investment management and better serve their clients,” said Chief Product Officer Alex Thompson.

The appeal of managed accounts is on the rise, with a report from Escalent Financial Services in February finding that financial advisors are more likely to ramp up their allocations SMAs from 18 percent currently to 26 percent in 2025. The trendline is even sharper for high-net-worth advisors, with average allocations expected to climb from 23 percent to 31 percent.

Last week, Dimensional Fund Advisors unveiled its own unified managed accounts platform, an evolution of its pre-existing separately managed accounts platform, to help advisors customize their clients’ investments to an even finer degree.