Agreement aims to provide financial advisors with new software tools to create tax-smart, multi-account investment and retirement strategies
SEATTLE & BOSTON, October 15, 2018 — Global asset manager Russell Investments announced today a “tax smart” partnership with LifeYield LLC, the industry leader in tax-smart, risk-smart household-level portfolio management software. The agreement aims to make LifeYield’s proprietary Taxficient Score® available to financial advisors who offer Russell Investments’ multi-asset, tax-managed investing solutions to retail investors. The two firms expect to launch their initial offering by early 2019.
This strategic collaboration unites Russell Investments’ tax-aware investing strategies and products with LifeYield’s tax-smart asset location software, marking the first such agreement in the asset management industry. Using LifeYield’s Taxficient Score, advisors will be able to advise their clients on multi-account tax-smart strategies and solutions by providing them with a view of all of their assets, including assets not actively managed by their advisor.
“We have extensive experience and fast-growing interest from advisors for our tax-smart products and strategies designed to help their clients maximize after-tax returns and ultimately achieve desired investment goals,” said Mark Spina, head of North America Advisor & Intermediary Solutions at Russell Investments. “Combining our robust tax-aware insights with LifeYield’s software-development expertise will generate tax savings and increased returns for advisors and their clients.”
“LifeYield and Russell Investments are two tax-smart companies working in different and complementary ways to achieve tax alpha for investors,” said Mark Hoffman, CEO of LifeYield. “We’ve long maintained the most notable new trend in the industry is moving from single-account to multiple-account management, and through this partnership, Russell Investments is able to offer advisors the technology to improve after-tax outcomes.”
LifeYield’s Taxficient Score offers advisors and their clients an easy way to explain the value of tax-smart, multiple-account management in dollars and cents. Similar to a credit score, the Taxficient Score assesses the tax efficiency—often referred to as asset location—of a client’s accounts on a scale of 0-100. The higher the score, the better positioned an investor is to minimize taxes and make and keep more money, as well as achieve retirement goals. In addition, it enables advisors to coordinate and aggregate all accounts in one place to provide a holistic view of an investor’s household portfolio and quantifies the financial benefit of tax-smart coordinated management. Ernst & Young conducted an independent study and found that when multiple household accounts and products are managed in a coordinated and strategic way, investors can improve after-tax returns and income by as much as 33 percent over their lifetime.