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Tax awareness should be embedded in every investment decision from the start. By Erik Preus

The wealth management industry has spent years marketing tax management as a feature layered onto a portfolio after investment decisions have been made. Instead, to maximize the impact of tax management, it should be framed in the following way: Tax awareness is not merely an add-on feature but a holistic overlay that should be embedded in every investment decision from the start.

This distinction matters because a service applied reactively can only do so much. But when it’ s integrated into portfolio construction from the outset, advisors can systematically manage the realization of capital gains, coordinate asset managers, and extend the holding periods of positions that would other- wise trigger avoidable short-term gains.

Advisors who consciously make the shift from tax management as a service to tax sensitivity as a design principle tend to generate more durable after-tax results for clients— not necessarily because the advisors have better technology and resources but because they are asking holistic, tax-aware questions early in the process and because they keep asking them throughout client relationships.

Tax Management’ s Differentiation Potential

In the past, advisors who marketed tax management as a service or feature have mostly handled tax-loss harvesting service requests in December. That’ s not even the most opportune time to do it, but many advisory practices have done so to lock in losses before the tax year ends.

However, tax management encompasses so much more than tax-loss harvesting. It also includes gain-loss matching and gain deferrals. It means holding on to some securities, perhaps those held over when the client brought them into the advisory relationship, that would not otherwise fall within the advisor’ s

JULY / AUGUST 2026 | FINANCIAL ADVISOR MAGAZINE | 47