Wealth managers are shifting the contest for clients from picking investments to managing taxes. In research released July 15, 2026, Cerulli Associates found that 76% of managed account platform sponsors named tax management capabilities as a key development focus, far ahead of the 42% prioritizing access to illiquid products. The findings come from The Cerulli Report, U.S. Managed Accounts 2026, based on a first-quarter survey and executive interviews.
Date note: the calendar entry for this item listed July 9; Cerulli's release is dated July 15.
What the survey found
The platforms that run model portfolios and separately managed accounts for advisors reported uneven tax capabilities, according to figures from the report published by Wealth Solutions Report:
| Tax capability offered by platform sponsors | Share |
|---|---|
| Automated tax-loss harvesting | 79% |
| Tax transition assistance | 43% |
| Asset location optimization | 29% |
| Tax-smart withdrawals | 21% |
The pattern is telling. Harvesting losses inside a single account is now close to a standard feature. The harder work, which spans accounts and years, is still rare: moving an old portfolio with large embedded gains into a new strategy, deciding which assets belong in taxable versus retirement accounts, and sequencing withdrawals in retirement.
Cerulli senior director Scott Smith argued that tax work is more dependable than security selection, calling it "a much more reliable source of post-tax alpha." The firm warned that platforms unable to support these capabilities risk losing assets to providers that can.
Who is affected
The shift matters most to households with large taxable portfolios, concentrated stock positions or significant realized gains from business or property sales. For those clients, the gap between pre-tax and after-tax returns can exceed the difference between one manager's picks and another's. It also matters to anyone paying an advisory fee who assumes tax management is included. The survey suggests the answer varies widely by platform.
The after-tax math
Federal rules set the stakes. For 2025, the top 20% long-term capital gains rate applies to married couples with taxable income above $600,050, and the 3.8% net investment income tax applies above $250,000 of modified adjusted gross income for joint filers. When losses exceed gains, up to $3,000 a year can offset ordinary income, with the rest carried forward.
Example: a couple in the top bracket sells a rental property for a $200,000 long-term gain in the same year their $2 million taxable portfolio falls in value. If the platform harvests $150,000 of losses by selling positions and buying similar ones, the taxable gain shrinks to $50,000.
| Scenario | Net taxable gain | Federal tax at 23.8% |
|---|---|---|
| No harvesting | $200,000 | $47,600 |
| $150,000 of losses harvested | $50,000 | $11,900 |
The $35,700 difference is largely a deferral rather than a permanent saving, because the replacement holdings carry a lower cost basis. Its value rises when losses offset short-term gains taxed at ordinary rates, when positions are held until death, or when appreciated shares are donated.
Questions clients often ask
Households evaluating an advisor on tax management often ask for specifics rather than assurances: how often harvesting runs and whether it is coordinated across all household accounts to avoid wash sales, how the firm handles a transition from a legacy portfolio with large unrealized gains, whether asset location is modeled across taxable and retirement accounts, and whether year-end reports show realized gains, harvested losses and estimated tax saved. Comparing those answers with a CPA's view of the household's full tax picture can show whether the service matches the fee.
What to watch
Cerulli expects advisors who resist change to adopt these tools once platforms make them the default. The next test is whether sponsors close the gaps in transition management and withdrawal planning, and whether they begin reporting after-tax performance alongside pre-tax returns.
Sources
- First reported Tax Optimization Becomes New Battleground for Wealth Manager Differentiation — Cerulli Associates
- Cerulli: Tax Optimization Becoming New 'Battleground' — Wealth Solutions Report
- Topic No. 409, Capital Gains and Losses — IRS
- Net Investment Income Tax — IRS
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