J.P. Morgan Rolls Out Tax-Smart SMA Platform for Advisors

“The strategy will leverage insights from J.P. Morgan’s index team, which manages over $70 billion in indexed assets, and harnesses J.P. Morgan’s 30 years of experience managing passive index strategies,” the company said.

J.P. Morgan Asset Management now manages $2.7 trillion in client assets, Laskowitz told ThinkAdvisor, noting it manages a little over $140 billion in SMAs.

Meanwhile, since J.P. Morgan acquired 55ip, the fintech firm’s assets have “more than tripled to over $6 billion,” he said.

J.P. Morgan has been seeing a lot of interest from advisors for increased tax management and “I think one of the drivers” of that demand has been that, as the returns investors see have been “coming down, a greater percentage” of their total returns will “come from tax management and active management,” he explained. “And those are areas where we’re really focused on helping advisors.”

More Platform Details

A small number of RIAs have been able to access the platform as part of a “soft launch” that’s been “running for a couple of months now,” and “the feedback that we have received initially has been very positive,” Laskowitz said. He declined to say how many advisors were included in the soft launch.

The platform’s official launch on Tuesday makes it available to the “broader market” of advisors, he noted.

Pre-acquisition, 55ip had been working to “democratize access to personalization and tax management, and the primary focus of the business has been around model portfolios to date,” 55ip CEO Paul Gamble told ThinkAdvisor.

But he said: “It’s always been our plan to extend that into SMAs as well.”

The company has created a “very intuitive, advisor-led experience” that offers “real-time customization and tax management,” along with “automated trade generation and execution to allow for advisors to do customization and tax management at scale but without having to take up more and more of their time,” Gamble said.

“We built deep integration with all the major RIA custodians so any custodians that we’re connected with today will have access to the strategy,” he continued.

Overall, the new digital platform “transforms what is often a complex, paper-based task into a digital, on-demand experience” that allows advisors to create custom SMAs in just a few steps, according to J.P. Morgan.

Advisors, J.P. Morgan said, can use the platform to:

Create customized investments: Using the J.P. Morgan Custom Invest SMA, advisors can create flexible, customized portfolios, incorporating clients’ investment views, preferences and tax considerations.
Create custom, tax-smart transitions: Advisors can deliver tax transition proposals to “ease the tax burden over time or limited to a specific tax budget.”
Automate systematic tax management: Potential tax alpha can be generated through ongoing, systematic tax-loss harvesting with constant portfolio manager oversight.

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