As the advisory landscape continues to evolve, one theme is increasingly clear: advisors need more flexibility to meet the diverse and growing expectations of their clients. At WisdomTree, we’ve long believed in the power of efficient, transparent and research-driven strategies, and our ETFs reflect that belief.
To help expand access to our strategies, we recently entered into a strategic relationship with Quorus, a technology-focused asset manager that specializes in tax-efficient separately managed accounts (SMAs). This commercial arrangement allows us to support advisors with more options for personalization and tax-aware portfolio construction—two areas of growing demand.
Just as important as the strategies themselves is the way they are delivered.
Today, we’re seeing growing advisor interest in SMAs, particularly those designed to improve tax efficiency and enable greater portfolio personalization. We don’t see these solutions as a replacement for pooled investment vehicles, which remain central to many client portfolios. Instead, SMAs add another layer of flexibility, aiming to give advisors more ways to deliver value.
Why SMAs and Why Now?
SMAs are not new, but they are gaining momentum thanks to modern technology and shifting client needs. With SMAs, clients own individual securities directly, which aims for benefits such as:
- Ongoing tax-loss harvesting
- Custom screens or tilts based on values, sectors or risk profiles
- Greater visibility into holdings and tax outcomes
- Portfolio-level customization within a consistent investment strategy
These advantages can be especially important for tax-sensitive investors, clients with concentrated positions or those who want their portfolios aligned with specific goals or values.
Tax Efficiency as a Differentiator
One of the clearest advantages of SMAs is the ability to actively manage tax exposure. Tax-efficient SMAs can help reduce realized gains, offset income and enhance after-tax returns while staying aligned with the intended strategy.
As clients become more focused on outcomes, not just returns, tax-aware investing is becoming an increasingly important part of the conversation.
ETFs and SMAs Can Work Together
We continue to believe that ETFs offer an incredibly efficient way to deliver diversified, cost-effective exposure, and they remain a core part of many well-constructed portfolios.
At the same time, some client needs call for a more personalized delivery method. SMAs can provide that customization, while still reflecting the same investment insights and philosophy. Making our strategies available for implementation in SMA format allows us to better support the varied ways advisors build portfolios today.
Expanding the Advisor Toolkit
As client expectations rise, the ability to offer tailored potential solutions becomes essential. SMAs provide a flexible, tax-aware option that can complement your existing approach and help deepen client relationships.
At WisdomTree, our goal is to support advisors with solutions that fit the way you work, whether through ETFs, models or now tax-efficient SMAs. We are committed to helping you deliver personalized, scalable portfolios that support both your clients’ goals and your practice growth.
If you are exploring new ways to build more customized portfolios, SMAs may be the right fit for the next phase of your advisory business.
To learn more about our SMAs please email us at [email protected].
By Thomas Skrobe, Head of Portfolio Solutions
This article originally appeared on WisdomTree’s website and is reprinted on VettaFi | ETF Trends with permission from the author. For more information, please visit WisdomTree.com.
Important Risks Related to this Article
WisdomTree, Inc., the parent company of WisdomTree Asset Management, Inc. (“WTAM”), holds a minority equity stake in Quorus Inc. (“Quorus”), and WTAM has commercial arrangements with Quorus under which WTAM model portfolios and strategies are offered through the Quorus platform and may be implemented in separately managed accounts (“SMAs”). WTAM receives advisory fees from WisdomTree ETFs that may be included in those model portfolios or strategies and a revenue-sharing payment from Quorus based on assets placed into SMA implementations of WTAM strategies (WTAM does not provide investment advice in connection with such SMA implementations or model portfolios). Accordingly, WTAM and its affiliates have a financial interest in the success of Quorus and may benefit economically from the relationship. The author of this post is a WTAM employee and serves on Quorus’s board of directors. This material is for informational purposes only, does not constitute investment advice or a recommendation to buy or sell any security.
U.S. investors only: Click here to obtain a WisdomTree ETF prospectus which contains investment objectives, risks, charges, expenses, and other information; read and consider carefully before investing.
There are risks involved with investing, including possible loss of principal. Foreign investing involves currency, political and economic risk. Funds focusing on a single country, sector and/or funds that emphasize investments in smaller companies may experience greater price volatility. Investments in emerging markets, currency, fixed income and alternative investments include additional risks. Please see prospectus for discussion of risks.
Past performance is not indicative of future results. This material contains the opinions of the author, which are subject to change, and should not to be considered or interpreted as a recommendation to participate in any particular trading strategy, or deemed to be an offer or sale of any investment product and it should not be relied on as such. There is no guarantee that any strategies discussed will work under all market conditions. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This material should not be relied upon as research or investment advice regarding any security in particular. The user of this information assumes the entire risk of any use made of the information provided herein. Neither WisdomTree nor its affiliates, nor Foreside Fund Services, LLC, or its affiliates provide tax or legal advice. Investors seeking tax or legal advice should consult their tax or legal advisor. Unless expressly stated otherwise the opinions, interpretations or findings expressed herein do not necessarily represent the views of WisdomTree or any of its affiliates.
The MSCI information may only be used for your internal use, may not be reproduced or re-disseminated in any form and may not be used as a basis for or component of any financial instruments or products or indexes. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each entity involved in compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties. With respect to this information, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including loss profits) or any other damages (www.msci.com)
Jonathan Steinberg, Jeremy Schwartz, Rick Harper, Christopher Gannatti, Bradley Krom, Kevin Flanagan, Brendan Loftus, Joseph Tenaglia, Jeff Weniger, Matt Wagner, Alejandro Saltiel, Ryan Krystopowicz, Brian Manby, and Scott Welch are registered representatives of Foreside Fund Services, LLC.
WisdomTree Funds are distributed by Foreside Fund Services, LLC, in the U.S. only.
You cannot invest directly in an index.
