The new index solution, designed to achieve tax alpha along with efficient returns, enables advisors to choose a starting index and apply active screens such as investment styles, factor tilts and investment preferences
Adhesion Wealth®, an outsourced investment management platform for registered investment advisors (RIAs), today announced the launch of its Personal Indexes investment solution to help advisors deliver a customized tax-advantaged investment option to clients. The new solution enables advisors to choose a starting index and apply active screens such as investment styles, factor tilts and investment preferences in a vehicle designed to achieve tax alpha.
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“Minimizing tax liability while managing portfolio risk is an important component of the overall value advisors bring to their clients,” said Barrett Ayers, President of Adhesion Wealth. “Adhesion’s proprietary personal indexing tools and replication techniques provide tax-aware portfolios that focus on tax-loss harvesting while demonstrating index-like tracking characteristics – saving advisors time and helping them in their pursuit of delivering better client outcomes.”
Personal Indexes are an expansion of Adhesion Wealth’s Investable Index Series, which track major market indexes except with a smaller subset of equity holdings, all individually owned by the investor. The entire Investable Index Series, available exclusively to Adhesion clients, is designed to be a low-cost investment solution that offers minimal deviation from the underlying index except with the tax and customization benefits not available from mutual funds or ETFs.
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Key features of Adhesion Wealth’s Personal Indexes program include:
Personalized Portfolios – Advisors can implement active screens to create indexes that are unique to their practice and available exclusively to their clients. Along with screening for components such as specific sectors, an advisor can optimize an index strategy based on other client preferences, such as ESG criteria, investment styles and factor tilts like momentum, volatility or valuation.
Tax-Managed Trading – Advisors can use Adhesion’s personal indexes as a vehicle to provide tax alpha in ways not available with ETFs or mutual funds, such as tax-harvesting individual securities, capital gain deferment, tax lot optimization, reducing unnecessary trades and tax expenses, and incorporating current holdings into an index-based portfolio.
Tax-Advantaged Transitions – Personal Indexes can help advisors generate tax-advantaged transitions around index-based strategies while preserving the client risk profile, keeping an eye towards potentially enhancing after-tax returns, unwinding concentrated stock positions, tax-aware transitioning of investment accounts and retirement and estate planning.
Index-Like Behavior – Personal Indexes demonstrate the behavioral traits of an index by replicating many of the underlying factors that comprise that index. As a result, advisors can use direct indexes with the expectation they’ll display predictable index-like risk/reward characteristics.
