Daniel Burke

Doing this requires real-time execution and household-level coordination.

EARLIER THIS YEAR, THE MARKETS GAVE INVESTORS A HIGHstakes window of volatility to manage. Tariff headlines triggered a double-digit drop in the S & P 500 before it quickly snapped back. For many advisors, the speed and scale of the drawdown made effective tax-loss harvesting nearly impossible. For those equipped with real-time execution and household-level coordination, however, it was an opportunity to create value for their high-net-worth clients.

Financial advisors have long recognized the importance of incorporating tax-aware strategies into their clients’ investment decisions. By selling securities at a loss, advisors can offset capital gains, including from the sale of a business or other appreciated assets, and increase their clients’ after-tax returns. But tax-loss harvesting during periods of market volatility carries real risk. Rapid selloffs followed by sharp recoveries can leave investors with tracking error, unfavorable reinvestment outcomes or an unintended shift in exposure.

For clients with large, embedded gains, the opportunity to realize losses and materially reduce their future tax liabilities can outweigh those risks if they execute with coordination, real-time insight and a portfolio-wide view that looks across their managers, accounts and legal entities.

What does it really take to deliver that kind of result? Three things:

1. You’ ll need to understand the trade-offs.

Tax-loss harvesting is not just about identifying losses; it is about understanding when the trade-off is worthwhile. Index managers own securities to track an

14 | FINANCIAL ADVISOR MAGAZINE | SEPTEMBER 2025 WWW. FA-MAG. COM