How It Works: Sophisticated algorithms make it simple.

The LifeYield ROI™ methodology helps financial advisors efficiently maximize the full asset growth and income generating power of a client's household portfolio. It helps to enhance after-tax accumulation returns and retirement income by more effectively managing the buying and selling of assets across a household's taxable and tax-advantaged accounts. LifeYield ROI is highly flexible and can be configured to place varying degrees of emphasis on taxes and risk or asset allocation management, depending on the advisor and client preferences.

Building and Maintaining Household Portfolios

A key to leveraging the full growth and income power of a client's portfolio is being able to see the full extent of a client's holdings: the more of a client's various accounts, from taxable to tax-advantaged, the advisor manages, the more the advisor can positively impact tax alpha for the client. LifeYield ROI allows an advisor to link client accounts together to create a unified managed household (UMH). LifeYield ROI then maintains those households and allows the advisor to manage them and report to clients as needed. As the advisor gathers more accounts, portfolios are easily added to LifeYield ROI.

Taxes

• Ordinary Income Taxes – Investors pay ordinary income taxes on withdrawals from traditional IRA accounts, interest payments from bonds in taxable accounts, and sales of securities in a taxable account when held fewer than 12 months.
• Long Term Capital Gains – Long term capital gains taxes are paid on qualified dividends and on sales in a taxable account when securities are held more than one year.
• Impact of Location on Taxes – Certain securities are much more appropriate for one account versus another. As an example, a tax free municipal bond should never be held in a traditional IRA, and frequently traded securities are more suitable for a tax-advantaged account. By minimizing taxes through more optimal asset location, LifeYield ROI helps an advisor increase asset accumulation and income, all the while maintaining the household's target asset allocation.

Location

Each time a financial advisor seeks to invest or generate cash, LifeYield ROI looks across all of the household's taxable and tax-advantaged accounts and suggests tax-optimal trades to invest the cash contributions or meet the requested cash amount. When IRS mandated required minimum distributions (RMD) apply during the retirement phase, optimal trades are proposed to raise cash from relevant tax-qualified accounts. At the advisor's discretion, certain accounts or assets can be excluded from the trading process so no trades will be proposed from those holdings

Optimal Trades Scoring

LifeYield ROI scores potential trades for favorability based on a variety of criteria including:

• Tax consequences;
• Location of assets, i.e. taxable or tax-advantaged accounts; and
• Impact to a desired asset allocation.

Each trade is ranked and the most favorable trades available are proposed. To make it easier for the advisor to evaluate the suitability and benefits of each proposed trade, and report to the client and/or advisory firm, scores and reasons for each proposed trade are given and displayed in a simple, intuitive graphic trade map. At the advisor's discretion, the proposed trade list may be edited to adjust, remove or add trades. When an advisor accepts a suggested list of trades, it can be exported to an Excel or CSV file, or sent directly to an order management system.

Reporting

At-a-glance views of a household's entire portfolio help an advisor ensure asset allocation and asset location strategies remain on track. The reporting screens show holdings by asset category and location in taxable versus tax-advantaged accounts. Reports can be based upon "effective" or net-of-tax-liability balances for tax-advantaged accounts so that financial advisors can see and report to clients an accurate tax-adjusted view of a household's total net worth.

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