BERWYN, PA — Envestnet is removing a key barrier to advanced tax-management tools, announcing that asset managers in its Fund Strategist Tax Management (FSTM) Advantage program will now help cover the cost of the service for enterprises, allowing advisors to offer tax-optimized portfolios to investors at no additional charge.
The move aims to expand access to tax-efficient strategies at a time when investors increasingly view tax management as a critical component of long-term wealth planning. Envestnet said the change allows advisors to incorporate its tax-management capabilities more seamlessly across managed account offerings.
Erik Preus, group head of investment solutions at Envestnet, said the update reflects the company’s broader effort to help advisors deliver stronger after-tax outcomes. He said the partnership with participating asset managers helps eliminate cost concerns that often prevent investors from adopting tax-sensitive strategies.
The FSTM Advantage program is designed to help reduce tax exposure and improve after-tax returns by giving advisors tools to manage capital gains — often a portfolio’s largest single expense. Advisors using Fund Strategist Portfolios can apply an optional tax-management service that aligns trading activity with each client’s tax-sensitivity preferences.
Demand for integrated tax-management tools remains high, said Sarah Bauer, Envestnet’s head of asset management engagement. She said the program’s fee-sharing model helps broaden investor access while lowering costs for enterprises that want to embed tax-management capabilities into their standard advisory platforms.
Advisors can choose from three tax-sensitivity levels — Moderate, High, and Very High — allowing portfolios to deviate from a strategist’s model when doing so would produce better after-tax outcomes. Envestnet evaluates the tax impact of each proposed model change year-round, adjusting trades when necessary to balance tax cost and investment risk.
The program is supported by a roster of participating asset managers, including Aptus Capital Advisors, Fidelity Investments, First Trust, Franklin Templeton, Goldman Sachs Asset Management, Janus Henderson, JP Morgan, Morningstar, Northern Trust Asset Management, SEI, State Street, T. Rowe Price, and others.
Enterprises interested in offering the FSTM Advantage service at no additional cost have been encouraged to contact their Envestnet representatives for details.
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