Michael O. AdairManaging Director, Senior Investment Consultant | 2018

Taxes

It’s important to understand the full picture of a client’s investment assets and take a personalized approach to building a tax-efficient investment portfolio.

Most high-net-worth clients have a need to reduce current tax liabilities, avoid unrealized taxes, and prioritize tax-advantaged assets. It’s important to understand the full picture of a client’s investment assets and take a personalized approach to building a tax-efficient investment portfolio. Do you currently address tax sensitivity with your clients?

We recommend the following process:

What follows is a case study illustrating how City National Rochdale was able to significantly reduce a client’s tax liability.

TAX-SENSITIVE PORTFOLIO ALLOCATION AND TRANSITION
A client portfolio had approximately $3.3M in total assets with embedded, unrealized capital gains of over $1.3M. An imminent tax burden was preventing necessary reallocation and diversification, so City National Rochdale created a plan to stage the exit of the existing portfolio.

As a result, a $269,000 tax consequence was reduced to approximately $51,000.

Following a strategic and disciplined process may help reduce a client’s tax burden and increase a portfolio’s long-term value. This approach may allow advisors to win the business of those who have the significant tax burdens that often characterize the working wealthy, as well as retain them with ongoing tax loss harvesting, asset location, and asset prioritization strategies.

For more information about how City National Rochdale can help reduce a client’s tax burden, please see our white paper, Tax Alpha: Enhancing Returns Through Active Management.

It’s important to understand the full picture of a client’s investment assets and take a personalized approach to building a tax-efficient investment portfolio.

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Important Disclosures

The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. This presentation is not an offer to buy or sell, or a solicitation of any offer to buy or sell, any of the securities mentioned herein.

Certain statements contained herein may constitute projections, forecasts, and other forward-looking statements, which do not reflect actual results and are based primarily upon a hypothetical set of assumptions applied to certain historical financial information. Certain information has been provided by third-party sources, and, although believed to be reliable, it has not been independently verified, and its accuracy or completeness cannot be guaranteed.

Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as of the date of this document and are subject to change.

As with any investment strategy, there is no guarantee that investment objectives will be met, and investors may lose money. Returns include the re¬investment of interest and dividends. Investing involves risk, including the loss of principal. Diversification may not protect against market loss or risk. Past performance is no guarantee of future performance.

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