Exclude Securities
A separate account money managers willingness and/or ability to allow a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) to exclude certain securities from being held in a particular account in this product. The reason for this exclusion may be related to client restrictions (i.e. no "sin" stocks), or because the client may own a particular security in that product in a different account.
Modify Sector Weightings
A separate account money managers willingness and/or ability to allow a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) to modify sector weightings. For example, the money manager’s model portfolio may call for a 10% allocation to technology stocks, but the end client may want to always restrict the allocation to technology stocks to 5% or less.
Consult Portfolio Manager
A separate account money managers willingness and/or ability to allow a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) to consult with the portfolio manager and administrator on a regular basis. This communication may take the form of quarterly phone calls, e-mails, or visits with the portfolio administrator or manager.
Consult Portfolio Administrator
A separate account money managers willingness and/or ability to allow a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) to consult with the portfolio manager and administrator on a regular basis. This communication may take the form of quarterly phone calls, e-mails, or visits with the portfolio administrator or manager.
Tax Lot Harvest Report to Advisor
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a regular statement detailing trades that were made in a particular client’s account to take advantage of tax lot harvesting (i.e. selling a security with a capital loss to offset a security that was sold with a capital gain in order to reap tax benefits).
Access Daily Portfolio Holdings
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with access to the daily holdings, risk, MPT, and performance information in their particular account. This would normally be accomplished via online account access.
Access Daily Performance
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with access to the daily holdings, risk, MPT, and performance information in their particular account. This would normally be accomplished via online account access.
Access Daily Risk Stats
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with access to the daily holdings, risk, MPT, and performance information in their particular account. This would normally be accomplished via online account access.
Annual Tax Document
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a regular statement detailing trades that were made in a particular client’s account to take advantage of tax lot harvesting and that can be filed directly with the IRS. Normally the information would be imported right into a client’s 1099 Form.
Tax-Optimization Software
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a tax optimization software package. This software may have been developed internally at the money manager’s office or may use non-proprietary software offered by vendors like Northfield or LifeHarbor or PlaceMark Investments.
Tax-Lot Trading Strategies
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a strategy or proposal of a strategy to harvest tax loss/gains as they occur. This may be a decision to give the money manager discretionary control to implement a pre-defined tax lot trading strategy for a particular’s clients account.
Harvest Tax Losses
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a strategy or proposal of a strategy to harvest tax losses if they will have a material impact on the client’s account.
Long-Term Cap Gain Use
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a strategy or proposal of a strategy to evaluate whether or not a particular trade will occur in the model portfolio based on the fact that the trade may or may not result in long-term capital gain tax treatment. In other words, does the money manager use in addition to fundamental or technical analysis any sort of tax analysis from a timing perspective in a proposed position?
Taxable Income Streams Analysis
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a strategy or proposal of a strategy to evaluate whether or not a particular trade will occur in the model portfolio based on the fact that the security or securities in question may provide high dividend income which would then be taxed to the end investor as ordinary income. That is, does the money manager evaluate dividends and the tax consequences of holding a dividend paying stock when evaluating a proposed position?
Sell High Cost Positions First
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a strategy or proposal of a strategy to evaluate whether or not to sell newer additions to a position in the portfolio (usually additional trades that occurred at a relatively higher cost basis) first when liquidating or trimming back on a particular position. Selling high-cost positions first may or may not have an effect on the overall taxable effect of that particular position change in the portfolio.
Flag Short-Term Gain Before Trade
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a means of providing the portfolio manager information about the fact that a potential trade that he or she may want to make would incur a short-term tax event. Generally, short-term tax rates are the highest of all and generally are to be avoided. This system would also provide the exact date when a position would "go long" (i.e. be held for more than one year) so that a portfolio manager could evaluate whether they would want to wait the additional time before executing that position change.
Analysis of Loss Candidates
A separate account money managers willingness and/or ability to provide a client (either the actual investor, a broker or financial advisor representing the end investor, or a program sponsor with who the money manager is providing this separate account product to) with a means of providing a proactive analysis of securities that may be sold based on the fact that they may be attractive loss candidates. For example a security that may currently have a neutral or hold rating within the money management firm may be considered for sale if it could be determined that it would be an attractive loss candidate.