Placemark Investments recently unveiled a turnkey investment product designed to help advisors offer their separate account investors the ultimate tax efficiency.
TOTAL, or Tax Optimized Total Asset Link, is offered through advisors and was introduced last October. It combines individual ownership of securities and active asset management with real-time analysis of multiple equity portfolios and non-portfolio assets to convey a complete picture of a client’s tax situation. The information is then analyzed by the TOTAL Optimization Engine to gauge the appropriateness and timing of decisions to buy and sell equities across the portfolios.
“The majority of managers give up more to taxes than they can reasonably be expected to make from active investment management,” says Lee Chertavian, CEO of Boston-based Placemark. “Yet we as an industry have, until very recently, focused all our attentions on picking the right stocks, but not thinking about the tax implications of the different buys and sells that we make.”
Chertavian says recent research shows that mutual fund investors lose as much as 2.5% to 3% annually in taxes, while investors in separate accounts give up only 1% to 1.6% each year in taxes.
Placemark, www.placemark.com, acts as the registered investment advisor while TOTAL partners advisors with top separate account managers like Nicholas-Applegate Capital Management, Loomis Sayles, First Quadrant, and Rittenhouse. The Atlanta-based brokerage/planning firm JP Turner recently signed on with Placemark, and Chertavian says 20 or 30 more similar deals are in the pipeline. Advisors can also use TOTAL for trading, custody, and clearing services. For firms that want to use their own infrastructure, the service can be integrated into their back office. TOTAL can also be private-labeled. “Let’s say an advisory shop with 300 planners wanted to offer [TOTAL] for all its planners. We can private label our front-end interface for them; we can embed it into their desktop.”