TRX Spec Sheet
Analysis Expert*
Analysis Expert allows the Advisor to view at a glance which clients are out-of-balance, which clients need cash or have excess cash to invest, and which clients have an opportunity for tax loss harvesting. Without having to wait for lengthy data processing, TRX gives the Advisor an instant snapshot – allowing the Advisor to control the number and timing of transactions!
*Patent Pending
Rebalancing
TRX rebalances portfolios automatically, considering tolerance ranges, tax ramifications, location optimization, redemption fees, transaction costs, and cash needs.
When determining whether or not rebalancing is necessary, TRX will allow for a 20% variance from the target allocation percentage. The Advisor can modify this parameter on a global, model, or subclass level.
Tax costs will automatically be minimized because TRX will avoid short-term gains and will sell the highest cost tax lots within taxable accounts. When beneficial (considering costs), TRX will locate asset classes in order to minimize long-term tax consequences (for example, holding fixed income in IRAs as opposed to taxable accounts).
For each portfolio’s proposed transactions, the Advisor will have the option of rebalancing with or without considering location optimization.
Cash
TRX will identify accounts that require cash as well as accounts that have excess cash to be invested. The Advisor has the option to merely cover the cash needed/invest excess cash or integrate cash transactions within a complete rebalance. When calculating transactions, TRX automatically considers tax ramifications and all suggested trades are structured in the most tax-efficient manner.
Multiple Variables
TRX simultaneously integrates multiple variables in order to arrive at the optimal transactions considering asset allocation strategy, tax efficiency and transaction costs. Specifically, TRX will:
- Avoid short-term capital gains
- Avoid wash sales
- Minimize gain recognition
- Limit gains/taxes to Advisor-set maximum
- Optimize investment location for long-term tax minimization
- Avoid excess cash and cash shortfalls
- Increase gross and after-tax returns
- Avoid redemption fees
- Minimize transaction costs
- Combine outside accounts within managed portfolio
Customizable Logic
TRX is pre-programmed with parameters used by top advisory firms. These parameters can be modified by the Advisor as desired. Specific parameters include:
- Tolerance ranges: TRX allows a tolerance range on the target allocation percentage of plus or minus 20%. The Advisor can change this tolerance range on a global, model or subclass level.
- Trade minimums: TRX sets trade minimums as the lesser of $500 or 1% of account balance. The Advisor can change minimum trade amounts on a global, household or account level.
- Cash minimums and set-aside cash: TRX provides minimum cash of 0.25% on IRAs and Roth IRAs. Minimum cash on taxable accounts and billing accounts is set at 0.75%. The Advisor can modify minimum cash parameters at the global, household or account level. The Advisor may also enter a “set-aside” cash amount by account in order to provide for client preferences and distributions.
- Tax rates: TRX sets the ordinary (and short-term) tax rate at 35% and the long-term capital gain rate at 15%. The Advisor can modify these rates at the global or household level.
- Location optimization: Although some location preferences are built-in, TRX gives the Advisor complete flexibility in choosing which asset classes or subclasses are preferred to be held in various account types. The Advisor merely needs to enter to preferred account type to hold the particular class or subclass and the preferred account type from which the class or subclass should be sold. For asset classes or subclasses without stated location optimization parameters, TRX will not consider location when suggesting trades.
- Client-specific parameters: TRX provides flexibility so that client-specific parameters can be considered. For example, the Advisor can input maximum gains and/or tax to be generated for a household within the year. Additional client-specific parameters available with TRX include capital loss carryforwards, set-aside cash amounts, tax rates, legacy positions, unmanaged positions, minimum trade amounts, tolerance ranges and related accounts.
- Fund-specific parameters: TRX allows the Advisor to enter fund-specific parameters that may include redemption fee percentages and timeframes, minimum transaction requirements, and differing transaction fee amounts by custodian, as applicable.
- Custodian-specific parameters: Transaction cost amounts and/or formulas can be separately entered by custodian.
Reviews
The TRX review process can be easily customized to fit your firm’s procedures. The Advisor can set the number of review levels, specify functions allowed or not allowed to each employee, and define the review process for calculating, accepting, processing and submitting trades.
Reports
TRX automatically quantifies short-term and long-term benefits to clients generated from short-term gain avoidance, minimizing realized gains, and location optimization. Tax reports summarize, at a glance, funds with tax loss harvesting opportunities at both the fund level and at the household level. Additional reports will show year-to-date realized gains and taxes incurred.
This information can be viewed on an ongoing basis as well as exported in a format suitable for client presentation.
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