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// PRESS RELEASES
// Higher Capital Gains Rates Means Investors Should Take Losses Now. Losses Are a Gift That Can Be Carried Forward Forever
Denver, CO – March 11, 2009 – With a rise in long term capital gains tax rates from 15% to 20% now proposed to take effect by 2011, investors need to act now by taking losses to reduce their increased tax bills later.
The issue applies to all investors but is particularly applicable to investors who typically have the most embedded gains in their portfolios – those with concentrated portfolios, low basis positions or business owners planning to cash out of their businesses. Effectively managing the tax burdens is a process that is executed over a period of months and for significant portfolios may be executed over 2-3 years.
“Unless you are an eternal pessimist or enjoy handing over 20% of your gains, investors should see the silver lining in this market and stock pile losses they can use to offset gains in the future and potentially improve their after tax, absolute returns,” said Lou Moore, CFP, Lincoln Financial Advisors. “Investors should look at taking strategic tax losses as tax wins.”
The concept of “harvesting losses” has evolved rapidly in recent years into a systematic, quantitative strategy that is executed throughout the year. Traditionally, tax loss harvesting was executed at the end of the year. Today’s harvesting seizes upon the daily volatility in the stock market to either chip away at investors’ capital gains tax bills or stockpile tax losses that can be used to offset gains months or even years in the future to potentially improve absolute returns.
Tax Losses Are a Gift Forever
“Most people don’t realize that stock losses carry forward forever. That means losses taken today can be used in 2010, 2011 or 2020,” said John Phoenix, CEO of Metamorphosis Money Management. “With investing, it’s not important how much you make, it’s how much you keep. Losses are gift that can enable you to keep much more of your gains, but only if you take them.”
Mr. Phoenix summarizes his advice for taxable investors:
- Harvest & Hold; Don’t Buy & Hold – Investors need to take losses and remain invested – today’s tax manager can do both by selling securities at a loss and purchasing proxies to keep industry weights consistent.
- Plan for the Future – Since realized tax losses carry forward forever and can be applied to gains months or years in the future, investors should seek to stock pile as many tax losses as practical in order to prepare for higher capital gains tax rates.
- Don’t Wait – To most effectively harvest losses, investors need to be strategic as the market volatility continues and accumulate losses over time.
- Speak to your Financial Advisor – Your financial advisor can help you build an investment plan to position your portfolio for a different investing environment than it was created for previously. Plus, your advisor can advise you on harvesting or provide access to specialty tax managers who can build a tailored plan.
About Metamorphosis Money Management
Metamorphosis Money Management (M3), a Delaware LLC based in Denver, CO and a Registered Investment Advisor with the United States Securities and Exchange Commission, delivers an institutional tax transition and active overlay solution to the high net worth investor market that aims to improve absolute returns. For more information visit: www.metam3.com.
// Metamorphosis Money Management Announces Exclusive Alliance with SummitAlliance Investment Group
Denver, CO. December 18, 2008- Metamorphosis Money Management (M3), a discretionary overlay manager, announced today a strategic alliance with SummitAlliance Investment Group, making M3 their exclusive provider of outsourced tax overlay solutions. SummitAlliance, a Dallas-based independent investment management and research firm, will now have access to M3’s unique solution designed to help them gain control over capital gains tax burdens for their affluent clients.
“Tax is becoming an increasingly important issue as we move into 2009, particularly for affluent clients who will be hit the hardest by the expected changing tax rates,” said Douglas Gill, CEO of SummitAlliance. “M3 enhances our menu of solutions for advisors and breakaway brokers who are seeking a flexible platform to better serve their affluent clients in either a fee or commission based business model.”
M3’s solution is designed to provide affluent investors and their advisors with a low cost, turn-key tool for reducing capital gains taxes while also diversifying their portfolio tax efficiently. This solution, which centers on M3’s ability to tax loss harvest continuously, enables the investor to use the volatility in the market to their advantage by either chipping away at realized capital gains, or stockpiling losses to offset gains taken in the future.
“Advisors are always looking for new ways to add value to their clients’ portfolios independent of performance,” said John Phoenix, founder and CEO of Metamorphosis Money Management. “SummitAlliance has recognized the value-add that a turn-key tax management solution can bring to their platform and we are excited that they have chosen M3 to help their advisors meet the demands of their wealthy clients.”
About SummitAlliance Investment Group
SummitAlliance is an independent investment management and research firm that provides outsourced comprehensive investment management solutions to financial advisors and institutional accounts via a robust, web-based platform. The SummitAlliance platform offers advisors the opportunity to conduct both fee-based and commission based business because while a TAMP, SummitAlliance also acts as a Broker/Dealer offering registered reps the opportunity for dual registration. For more information visit www.sa-cm.com
About Metamorphosis Money Management
Metamorphosis Money Management, or M3, is a tax overlay manager that offers advisors a low cost, turnkey solution that can minimize the impact of capital gains taxes for clients who hold individual stocks in Separately Managed Accounts. By minimizing the impact of capital gains taxes, M3 delivers potentially higher absolute returns while also significantly reducing the advisor’s administrative burden. Learn more at www.metam3.com.
// Envestnet Offers Advisors New Tax Solution for Affluent Investors
with Addition of Metamorphosis Money Management
Chicago, IL. October 29, 2008- Envestnet, a leading provider of wealth management solutions to more than 15,000 financial advisors, announced today it has added Metamorphosis Money Management (M3), a tax transition manager, to their platform. Advisors on the Envestnet platform will now have access to M3’s unique solution designed to help them gain control over capital gains tax burdens for their high-net-worth clients.
“The addition of M3 to the Envestnet platform is an exciting development for advisors. M3 enables advisors to offer important transition strategies to their clients; differentiating them in the high-net worth marketplace. We believe M3 enhances our comprehensive investment services offering and are looking forward to introducing them to a broad group of our advisor clients," said Bill Crager, President of Envestnet.
M3’s solution is designed to provide advisors with a low cost, turn-key tool for managing tax burdens during transitions, providing a tax efficient means for implementing allocation changes or diversifying single stock or concentrated portfolios. The solution enables the client to keep more of their gains, potentially improving absolute returns.
“We are extremely excited to be involved in a relationship with a provider as reputable as Envestnet,” said John Phoenix, founder and CEO of M3. “The relationship with Envestnet allows us to showcase our services on a leading platform that has proven to be a powerful source for investment advisors trying to meet the growing demands of their clients.”
About Envestnet
Envestnet Asset Management, one of the largest providers of wealth management solutions in the industry, delivers separately managed accounts, mutual funds and alternative investments to independent financial advisors. Envestnet’s investment offerings are supported by a proprietary technology platform that delivers customized advisor web sites, consolidated views and comprehensive reporting abilities to the nation’s independent investment advisory firms. Envestnet is headquartered in Chicago with offices in Denver, Los Angeles, New York, Silicon Valley and internationally.
Envestnet has more than $38 billion in assets under management and administration with over 400,000 investor accounts*. For more information, visit www.envestnet.com.
About Metamorphosis Money Management
Metamorphosis Money Management, or M3, is a tax overlay manager that offers advisors a low cost, turnkey solution that can minimize the impact of capital gains taxes for clients who hold individual stocks in Separately Managed Accounts. By minimizing the impact of capital gains taxes, M3 delivers potentially higher absolute returns while also significantly reducing the advisor’s administrative burden. Learn more at www.metam3.com.
// EFG Capital Asset Management Los Angeles Selects
Metamorphosis Money Management as Tax Transition Specialist
Denver, CO- October 16, 2008- Metamorphosis Money Management (M3), a leading tax transition manager, announced today it has been selected as the exclusive provider of tax transition solutions by EFG Capital Asset Management Los Angeles, a member of the EFG International, a global bank group offering private banking and asset management services.
“Taxes are the high net worth investor’s single largest expense – an expense that many portfolio managers typically try to mitigate at the end of the year if at all,” said Clinton Hodges, a former IRS tax attorney and Senior Director at EFG Capital Los Angeles. “Combining M3’s style of tax transition and managing tax efficiently year round, a portfolio’s absolute return can be improved substantially. This is especially important in today’s volatile market environment.”
M3’s solution is designed to provide advisors with a low cost, turn-key tool for managing tax burdens during transition, while offering the investor a customized portfolio. This solution, which is offered only through advisors, minimizes the impact of capital gains during allocation changes, when diversifying or as an ongoing tax overlay.
“EFG Capital has an impressive international reputation and possesses deep experience in wealth management strategies for sophisticated investors including multi-generational families, private business owners and corporate executives,” said John Phoenix, founder and CEO of Metamorphosis Money Management. “Our tax transition methodology will enhance the EFG Capital’s menu of highly tailored solutions for high net worth individuals.”
About EFG International
EFG International is a global private banking group offering private banking and asset management services, headquartered in Zurich. EFG International's group of private banking businesses currently operate in 50 locations in over 30 countries, with circa 2,000 employees. EFG International's registered shares (EFGN) are listed on the SWX Swiss Exchange. EFG International is a member of the EFG Group headquartered in Geneva, Switzerland, which is the third-largest banking group in Switzerland by Tier-1 Capital.
About EFG Capital Asset Management
EFG Capital Asset Management is a U.S. based registered investment advisor. It has offices in Miami and Los Angeles and it is a subsidiary of EFG Capital International.
About Metamorphosis Money Management
Metamorphosis Money Management, or M3, is a tax overlay manager that offers advisors a low cost, turnkey solution that can minimize the impact of capital gains taxes for clients who hold individual stocks in Separately Managed Accounts. By minimizing the impact of capital gains taxes, M3 delivers potentially higher absolute returns while also significantly reducing the advisor’s administrative burden. Learn more at www.metam3.com.
// Metamorphosis Money Management Announces Exclusive Alliance with RMB Capital Management
Denver, CO. September 30, 2008- Metamorphosis Money Management (M3), a leading tax transition manager, announced today a strategic alliance with RMB Capital Management, making M3 their exclusive provider of tax transition solutions. RMB Capital Management, a Chicago-based independent RIA providing asset management and financial advisory services for individual and institutional investors, will now have access to M3’s unique solution designed to help them gain control over capital gains tax burdens for their high-net-worth clients.
“Efficient tax management through year-round tax loss harvesting is critical to generating positive returns, especially in a turbulent market,” said Richard Burridge, JR, CEO of RMB Capital Management. “Metamorphosis Money Management’s unique solution provides our advisors with an unmatched solution for catering to high-net-worth clients with low cost basis or concentrated positions for whom capital gains tax is a significant issue.”
M3’s solution is designed to provide advisors with a low cost, turn-key tool for managing tax burdens during transition, while offering the investor a customized portfolio. This solution, which is offered only through advisors, enables the advisor to efficiently tax manage a client’s portfolio for rebalancing, making allocations changes, or diversifying a single stock or concentrated portfolio. As a result the client keeps more, while potentially earning higher absolute returns.
“We are very excited about working with RMB advisors to help create high-quality investment opportunities for their clients,” said John Phoenix, founder and CEO of Metamorphosis Money Management. “RMB has seen the value tax management can add to a portfolio and their clients can now benefit from it.”
About RMB Capital Management
RMB Capital Management is an independent, registered investment advisor providing
investment management and financial advisory services for high-net-worth individuals and institutional investors. As an independent firm that staffs its own research team, our proprietary analysis allows us to find original opportunities and not be swayed by market trends. Combining decades of broad expertise with a long-term investment approach, we focus on achieving the sound results that our clients and our own team expect.
About Metamorphosis Money Management
Metamorphosis Money Management, or M3, is a tax overlay manager that offers advisors a low cost, turnkey solution that can minimize the impact of capital gains taxes for clients who hold individual stocks in Separately Managed Accounts. By minimizing the impact of capital gains taxes, M3 delivers potentially higher absolute returns while also significantly reducing the advisor’s administrative burden. Learn more at www.metam3.com.
// IPC Introduces Customizable TAMP for High-Net-Worth Market
with Addition of Tax Transition Services
Boca Raton, FL- July 8, 2008- Independent Portfolio Consultants, Inc. (IPC), a registered investment advisor serving the high-net-worth investor market, has entered into a strategic alliance with Metamorphosis Money Management (M3), a tax transition manager, to provide a turnkey Customizable Asset Management Program, or CAMP.
Unlike a traditional TAMP, the IPC CAMP concept is designed to offer turnkey asset management solutions that are completely customizable to meet the unique needs of the high-net-worth and ultra-high-net-worth. The IPC CAMP concept extends the TAMP model by adding a significant, ongoing consulting component that includes direct contact with money managers.
“The CAMP concept is a people driven approach that offers the high-end advisor an alternative to cookie cutter investment management solutions,” says Alan Bush, Chairman and CEO of IPC. “Tax transition and tax management are perfect examples of the kind of services that high-net-worth clients demand and are only available on a platform with the flexibility that the IPC CAMP offers.”>
In partnering with M3, advisors who select the IPC platform now have access to a unique, turnkey solution to managing capital gains tax burdens during transition. This trading based solution continuously tax loss harvests every day, potentially increasing absolute returns while achieving diversification and lowering risk.
“What many advisors don’t realize is that capital gains taxes are a high-net-worth investor’s single largest expense,” said Mr. Bush. “The addition of a tax transition service to our platform allows our advisors to control these tax burdens and enables the client to keep more of what their portfolios earn.”
While valuable to any high-net-worth client, tax transition management is particularly appealing for clients with:
- Single stock or concentrated portfolios
- Exchange funds that must be liquidated
- Assets held among multiple advisors
“Capital gains taxes are a huge obstacle preventing many wealthy investors from implementing meaningful allocation or portfolio changes,” said John Phoenix, CEO of Metamorphosis Money Management. “IPC is now one of the first firms to provide advisors with an investment solution in combination with an independent and highly efficient tax solution for the advisors’ high-net-worth clients with significant tax issues.”
For more information, visit the IPC website at www.ipcanswers.com or Metamorphosis Money Management’s website at www.metam3.com
About Independent Portfolio Consultants
Independent Portfolio Consultants, Inc. is a registered investment advisor based in Boca Raton, Florida which specializes in correspondent managed account services. IPC’s correspondents include nationally recognized insurance companies, brokerage firms and financial/estate planning organizations.
About Metamorphosis Money Management
Metamorphosis Money Management, or M3, is a tax overlay manager that offers advisors a low cost, turnkey solution that can minimize the impact of capital gains taxes for clients who hold individual stocks in Separately Managed Accounts. By minimizing the impact of capital gains taxes, M3 delivers potentially higher absolute returns while also significantly reducing the advisor’s administrative burden. Learn more at www.metam3.com.
// Optimal Window Closing for Tax-Efficient Allocation Changes
Expected Increase in Capital Gains Rates Offers Advisors Prospecting Opportunity
Denver, CO – March 26, 2008 – The current 15% maximum long term capital gains rate is likely to disappear when a new administration takes office in 2009 or shortly thereafter. This means that inaction could be costly, especially for high-net-worth investors needing to change allocations or diversify a concentrated portfolio. However, it does create an opportunity for advisors who cater to wealthy investors.
If no new tax laws are passed, the current tax rates on dividends and capital gains created by President George W. Bush’s Economic Growth and Tax Relief Reconciliation Act of 2001 will sunset and tax rates will return to the old rates of 20% on capital gains and as high as 35% on dividend income in 2009. In addition, the media have reported that presidential candidates Barack Obama and Hilary Clinton have strongly supported increasing the capital gains tax rates, with some reports suggesting investors could see a return to 39.6% tax rate for top income brackets.
For high-net-worth investors, this difference between the 15%, 28% and 39.6% rates is significant. Consider the impact on liquidating a portfolio with $1 million in imbedded capital gains in order to diversify:
|
Capital Gains Tax Rate |
Capital Gains Taxes |
% Increase |
|
15% |
$150,000 |
0% |
|
28% |
$280,000 |
87% |
|
39.6% |
$396,000 |
164% |
Such figures illustrate the closing window of opportunity for advisors to high-net-worth investors. Investors most impacted by the increase in capital gains tax rates include:
- Single stock or concentrated portfolios
- Exchange funds that must be liquidated
- Assets held among multiple advisors
- Any pool of assets needing diversification
“Tax used to be just a year-end discussion or unpleasant certainty, but for savvy advisors it’s becoming a competitive advantage,” says John Phoenix, founder of Metamorphosis Money Management, a tax overlay manager. “Advisors need to see the expected increase in capital gains tax rates as an opportunity to prospect high-net-worth investors about strategies that can unlock tax frozen assets, making it possible to consolidate assets held away or implement asset allocation changes.”
About Metamorphosis Money Management
Metamorphosis Money Management, or M3, is a tax overlay manager that offers advisors a low cost, turnkey solution that can minimize the impact of capital gains taxes for clients who hold individual stocks in Separately Managed Accounts. By minimizing the impact of capital gains taxes, M3 delivers potentially higher absolute returns while also significantly reducing the advisor’s administrative burden. Learn more at www.metam3.com.
Michael Gelormino, River Communications, 914.686.5599
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