BERWYN, PA — Envestnet (NYSE: ENV) has expanded its relationship with Vanguard to integrate the investment firm’s Advisor’s Alpha framework into Envestnet’s wealth management platform, broadening financial advisors’ access to tax-aware portfolio management tools as demand grows for personalized investment strategies.
The expanded collaboration combines Vanguard’s investment framework with Envestnet’s tax-aware portfolio technology, enabling advisors to incorporate tax management throughout the year rather than limiting it to year-end planning, the company announced.
The integration makes Vanguard’s Advisor’s Alpha framework available through Envestnet’s Wealth Management Platform, where it is paired with the company’s portfolio management technology to support tax-efficient investing and customized client portfolios.
The firms said the offering is intended to help advisors implement tax-loss harvesting and other tax-efficient retirement strategies while maintaining portfolios aligned with long-term investment objectives.
Dana D’Auria, Envestnet’s co-chief investment officer and group president of solutions, said tax management has become an ongoing portfolio management function rather than a seasonal exercise.
“Tax management is no longer a year-end exercise,” D’Auria said. “Advisors increasingly need solutions that help them manage tax implications throughout the year while keeping their portfolios aligned with their clients’ long-term goals.”
As part of the expanded relationship, Vanguard will also join Envestnet’s Fund Strategist Tax Management Advantage program, which allows advisors using eligible model portfolios to apply continuous tax management based on individual client tax preferences.
According to Envestnet, the program continuously evaluates the tax consequences of portfolio adjustments in an effort to balance tax costs with adherence to an investment strategy. Participating asset managers subsidize the service, allowing eligible advisors to access the tax-management capabilities without additional fees.
Eve Cout, head of advisor solutions for Vanguard Financial Advisor Services, said the collaboration is designed to help advisors adopt model portfolios and tax-efficient strategies more broadly.
“Combined with the scale of Envestnet’s wealth management ecosystem, this work helps advisors more confidently adopt model portfolios and tax-efficient strategies,” Cout said.
The companies said the expanded relationship builds on Vanguard’s research into advisor value creation, which has identified tax optimization as one of the primary ways financial advisors can improve long-term client outcomes.
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