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SEI's Latest Enhancements in Tax Management

SEI Investments, a recognized leader in financial technology and asset management, announced recent enhancements to its integrated tax management capabilities targeting separately managed accounts (SMAs) and unified managed accounts (UMAs). These advancements are designed to provide financial advisors the tools necessary to create customized investment portfolios that align more closely with their clients' tax preferences and investment goals.

Expanded Capabilities for Advisors

With an increasing shift towards tax-aware investing strategies, financial advisors are seeking efficient methods to help high-net-worth clients navigate the complexities of tax management. According to a recent survey, a staggering 92% of advisors serving this segment report a growing demand for tax guidance. In response to this emerging need, SEI's upgrades focus on three key areas: expanding asset eligibility, enhancing tax transition flexibility, and providing greater control over gains budget management.

The upgraded capability to incorporate eligible mutual funds along with exchange-traded funds (ETFs) and individual securities expands the opportunities for advisors to transition existing portfolios while mitigating potential tax implications. This flexibility allows for more strategic portfolio adjustments, enabling advisors to pursue optimized after-tax outcomes more effectively.

Moreover, the enhanced tax transition functionality offers an innovative solution for portfolios containing significant unrealized gains. By allowing a gradual transition that encompasses tax-sensitive objectives alongside traditional tracking-error constraints, SEI enables advisors to balance their clients' investment strategies in a calculated manner. This newfound flexibility can significantly reduce the risk of abrupt tax liabilities that could arise from major portfolio shifts.

Systematic Control Over Capital Gains

Another major highlight of SEI's recent enhancements is the introduction of greater systematic control over capital gains realizing. Advisors can now establish specific annual net realized gains targets. This refined control aligns portfolio operations with client tax preferences and broader financial planning objectives, providing a structured framework that advisors can depend on.

Erich Holland, Head of SEI's U.S. Wealth Advisor Business, emphasized the importance of integrating tax efficiency into the investment process. He noted, "Investors no longer view tax efficiency as an added benefit; it's expected to be a fundamental component of portfolio management. These enhancements showcase our commitment to making tax management more intentional and seamlessly integrated into the overall investor experience."

As demand for tailored tax awareness grows, these advancements in SEI's tax management system are strategically timed to facilitate advisors' efforts in maximizing their clients' after-tax returns. The firm has built upon nearly two decades of tax overlay experience, ensuring that their offerings not only meet regulatory expectations but also address the evolving needs of the market effectively.

Looking Ahead

The financial landscape is constantly shifting, and with it, the expectations of investors. With 76% of firms marking improved tax management capabilities as a top priority, SEI is uniquely positioned to support advisors in this regard. The enhancements to tax-loss harvesting coordination, wash-sale awareness, portfolio optimization, and investor reporting are set to empower financial advisors. By integrating these capabilities into a coherent tax-management framework, SEI is helping to redefine how investment portfolios are structured and maintained in an increasingly complex regulatory environment.

In conclusion, as the lines between tax and investment management continue to blur, SEI’s proactive approach in enhancing its tax management capabilities represents a critical development in the financial services sector, facilitating improved portfolio performance and investor satisfaction that aligns with changing demands. With nearly $2.1 trillion in assets managed, SEI remains committed to advancing financial solutions that empower advisors and benefit investors.

About SEI

SEI is a global innovator in financial services, dedicated to delivering tailored solutions that enable clients to optimize their capital deployment in a beneficial manner. With an extensive suite of services catered to various financial needs, SEI plays a pivotal role in helping advisors and investors reach their financial objectives. For more information, visit seic.com.