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Placemark Investments on Monday, May 17, received a patent for a process that uses the firm's overlay management technology to let advisors manage taxes by limiting gains and making other trade-offs tailored to a client's specific tax considerations.
Awarded by the U.S. Patent and Trademark Office, the patent, originally filed in 2001, is based on Placemark's overlay management technology, which combines multiple account portfolios into a single custodial account. Placemark's tax-specific approach balances risk, opportunity, and tax costs for each trade, and the tax cost for each trade is calculated based on client-specific rates, realized gains, and losses within a portfolio.
Placemark has already launched dozens of these proprietary managed account programs for clients such as Oppenheimer, Prudential Investments, Hilliard Lyons, and Janney Montgomery Scott as well as independent registered investment advisory firms.
"Tax management was one of the differentiating and compelling features of Placemark's overlay management process," said Jeffrey Sutton, senior managing director of the Consulting Group at Oppenheimer Asset Management, in the Placemark release. "Placemark's tax management capabilities have allowed Oppenheimer to [help] our advisors develop deeper client relationships."
Oppenheimer partnered with Placemark in 2008 to launch the Oppenheimer Unified Managed Account (UMAs), an open architecture program. Overlay management technology allows Placemark to work with firms to develop UMAs, a fee-based investment solution that incorporates multiple investment vehicles such as managed accounts, mutual funds, and ETFs into a customized portfolio. Founded in 1999, Placemark has offices in Dallas and Wellesley, Massachusetts.