index while active managers select investments because they have conviction. But to realize losses, those positions must be exited. In volatile markets, this creates exposure risk. Sector correlations often break down. Stock-specific reversals occur. And sometimes, the very names most eligible for loss harvesting become the biggest drivers of recovery days later.
That is why every tax-loss harvesting decision must be paired with an equally thoughtful reinvestment plan. Replacement securities cannot just be rules-based placeholders; they must maintain the intent of the original strategy. In some cases, that means holding them longer than expected to manage gains or to make sure they are treated as long-term holdings for tax reasons. In other cases, that might mean the investor wants to select a basket of replacement securities to most accurately reduce the tracking risk.
During the April market dislocation, Callan Family Office ' s investment team evaluated several large-cap technology stocks for loss harvesting. We intentionally avoided some names— those directly affected by proposed tariffs and those exhibiting specifics risks, focusing instead on stocks more impacted by broad market sentiment than targeted policy. In one case, the team exited a declining tech position and reinvested in a custom basket of replacements that preserved the portfolio’ s strategic exposure while also minimizing its tracking error. This kind of trade required careful coordination across investment and tax teams to get right.
2. You’ ll want to control the full picture.
Tax-loss harvesting often fails not because of a bad strategy but because of poor coordination. High-net-worth families typically hold multiple accounts and use different investment firms and managers. Without a view for what’ s going on with all of an investor’ s different managers, even a technically sound decision in one account can create problems elsewhere. Worse, it can disqualify the loss
Consider how the April disruption affected volatile index heavyweights such as Nvidia, Apple and Tesla. To a third-party manager looking at one sleeve, harvesting losses in those names could have seemed too risky.
entirely if another manager inadvertently triggers a wash sale.
Consider how the April disruption affected volatile index heavyweights such as Nvidia, Apple and Tesla. To a third-party manager looking at one sleeve, harvesting losses in those names could have seemed too risky, as any underweight might drag on benchmark-relative performance if those names rebounded. And that is a valid concern if only one account is visible to a money manager.
But if the full portfolio is visible to them, advisors can make better decisions. Consider one Callan Family Office client who was already overweight in tech exposure and had been buying other correlated stocks in a separate brokerage account during the downturn. From that broader perspective, harvesting partial losses in a few large tech names could reduce the client’ s overall tax liability without disrupting the portfolio ' s overall allocation. There was still a risk that the losses could reverse, but the investments were better managed when the full household was visible.
3. You’ ll need to act at the speed of markets.
High-net-worth client advisors often manage hundreds of clients and thousands of securities. But market opportunities do not wait until firms are ready. The April market event unfolded in a matter of days— not months. Firms using static workflows or batch-based processes likely missed the opportunities. By the time they reviewed portfolios or generated tax reports, the market had already recovered.
During that period, Callan Family Office clients with aggressive loss-harvesting objectives had the opportunity to take losses multiple times within a single 30- day window. This was not luck; it was the result of daily tax lot visibility, automated wash-sale detection and direct implementation of both the active and passive investment strategies.
That kind of speed does not come from a spreadsheet or a quarterly check-in. It comes from integrated systems that enable tax-aware trading every day, not just at year’ s end. Tax-loss harvesting has become a familiar talking point in wealth management, so much so that many software tools now offer a tax-loss harvesting button— a single click that scans for losses and uses predefined rules to propose trades. But the idea that such a button can navigate household-level exposure and restrictions, reinvestment timing, washsale risk and strategy alignment is misguided. These systems can’ t get a full view of a client’ s portfolio, nor do they have the judgment required to make the right decisions for clients.
The difference between checking the box and actually delivering after-tax value matters. It requires clarity about trade-offs, full visibility of the client’ s world and the infrastructure to act at the speed of markets. That’ s the standard that high-net-worth clients deserve from their professionals.
DANIEL BURKE is an investment management partner at Callan Family Office, an independent wealth management firm serving ultra-high-networth families, foundations and institutions.
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