Quorus launches tax-aware, multi-account householding

We at Quorus are passionate about helping advisors offer more tax-efficient active portfolios for their clients.

Adding tax-aware, multi-account householding builds upon our separately managed account tax-management solution. This new feature allows advisors to incorporate integrated tax management across multiple accounts from an individual or married couple.

Taking this integrated approach has the potential to improve the risk and return characteristics of a client's total portfolio and reduce the individual's tax liability.

Multi-account householding explained

Householding means jointly managing multiple accounts (e.g., individual taxable accounts, non-qualified trusts, Roth RIA) to a single asset allocation. Contrast this with a non-household view, which views every individual account as a single asset allocation.

This approach allows advisors to minimize unintentional drift from a client’s target allocation and align the portfolio to a single, client-level risk measure.

Now make it tax-aware

In addition to traditional portfolio construction benefits, integrated household management is even more critical for taxable accounts.

It ensures that the account with the highest-value tax management trades is sequenced first. It also prevents accounts under a single household from making trades that trigger wash sales.

Valuable but complex

Implementing tax-aware, multi-account householding with actively managed, separately managed accounts is operationally complex.

To determine optimal trades for a client account, the advisor must maintain a target asset allocation across multiple investment portfolios, maximizing the potential tax deferral benefit and controlling for unintended impact to the active manager’s investment signal.

This requires the advisor to know all open and closed tax-lot information about all client portfolios and conduct a multi-account tax-aware portfolio optimization. This optimization must consider client-specific constraints (e.g., tax budget) and strategy-specific constraints to determine the best trades.

Research on tax management has demonstrated that to maximize the after-tax value of a portfolio, it should be checked daily for opportunities to generate tax savings.

As the number of accounts an advisor oversees increases, the recordkeeping and portfolio management process gets increasingly complicated.

Householding with Quorus

Now, every portfolio Quorus runs automatically considers any other accounts tied to the same household when checking for tax-management opportunities.

Our daily process optimizes each account individually and as part of the household to determine the best possible trades to improve tax efficiency and portfolio exposure. Once the optimal trades are identified, Quorus executes the trades on behalf of the advisor.

With Quorus, there is no software to check, no tax lots to reconcile, and no optimizer tuning to preserve active signals. Just seamless, sophisticated tax management executed automatically for your clients.

Disclosures

All investing is subject to risk, including possible loss of principal.

Quorus Inc. ("Quorus," "we," or "our") is an investment adviser registered with the Securities and Exchange Commission ("SEC"). Registration does not imply a certain level of skill or training.

The material presented is for informational purposes only and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Investing in securities involves risks, including the potential loss of money, and past performance does not guarantee future results. Historical returns, expected returns, and probability projections are provided for informational and illustrative purposes and may not reflect actual future performance. Nothing in these materials should be construed as personalized investment advice, which can only be provided in one-on-one communications.

Tax-loss harvesting and tax-aware management seek to improve after-tax outcomes but do not guarantee any tax result, and their effect depends on a client's individual circumstances, including tax rates, holding periods, and other activity in the client's accounts. Quorus does not provide tax or legal advice. Clients should consult their own tax and legal advisers.

Householding and multi-account coordination depend on the accounts an advisor elects to include, the constraints applied, and information provided about accounts held away. Wash-sale and related tax rules apply across a client's accounts, including accounts Quorus does not manage, and Quorus cannot account for activity it is not told about. Availability is subject to eligibility, custodial arrangements, and account minimums.

Certain information contained herein has been obtained from third-party sources. While taken from sources believed to be reliable, Quorus has not independently verified such information and makes no representations about its accuracy or its appropriateness for a given situation. Hyperlinks to third-party content are provided for convenience and are not an endorsement of that content.

A copy of Quorus's current Form ADV Parts 2A and 2B, which contain important information about our advisory services, fees, and disciplinary history, is available upon request.