CheckFree Investment Services announced Monday the launch of new data that can help clients of its leading separately managed accounts platform, CheckFree APL, benefit from the tax-efficiency of managed accounts.
CheckFree reports a 200% increase in usage of gain/loss trade modeling (GLTM) functionality during the critical year-end timeframe (Oct - Dec), when tax treatment needs to occur.
GLTM is designed to assist CheckFree APL clients in executing tax trading strategies; identifying opportunities for harvesting gains or losses; viewing gain/loss data at the tax-lot level; liquidating large portions of an account; and trimming security positions across accounts while assessing the tax implications.
CheckFree is the largest provider of remote processing services, such as trading, portfolio management, accounting, reporting services and data, to broker/dealers, money managers and investment consultants.
In 2003, Financial Research Corp. and the Money Management Institute reported that investment advisors they surveyed apply customization, restriction or tax treatment to only 10% to 25% of accounts they manage.
Unlike mutual funds, where investors often must pay capital gains on appreciation they didn't enjoy, investors own the underlying stock in an SMA. Therefore, SMA investors and their advisors can clearly see what they own and sell their losing stocks to offset other capital gains -- a key advantage for SMA clients.
"Tax-efficiency for separately managed accounts is often preached but rarely practiced. Money managers, who regularly leverage state-of-the-art investment technologies, are better equipped to successfully offset capital gains taxes for their clients," said Alex Marasco, CheckFree's executive vice president and general manager.