How to Model Tax Impact When Recommending a New Portfolio
When you recommend a new portfolio, the first question on your prospect’s mind is often: “What about the tax hit?” If you can’t provide a clear answer, you risk losing their trust—along with their assets.
Below is a straightforward guide to making the tax impact crystal clear, so you can move forward confidently.
Capital Gains Confusion Kills Conversions
Advisors often lose assets because prospects worry about triggering capital gains. They ask, “Will I pay a huge tax bill if I move everything over?” Without concrete numbers, people default to inaction—even if the new portfolio is objectively better.
Why Traditional Tools Fall Short
Tedious Data Entry: Relying on spreadsheets or even sophisticated portfolio modeling tools can mean hours of manual input.
Lack of Tax Modeling: Many platforms show performance forecasts or allocation changes, but they don’t show the exact tax liability for each holding.
Complex Transitions: There’s no straightforward way to model phased transitions or tax-loss harvesting, both of which can dramatically reduce the tax burden.
What an Ideal Tax Transition Tool Should Do
Upload Brokerage Statements: No manual data entry—just import the statement.
Identify Embedded Capital Gains: Automatically pull cost basis details and show which holdings have short-term vs. long-term gains.
Quantify Tax Owed: Show the projected tax liability for each holding.
Suggest Strategies: Offer multiple approaches, such as:
Full switch immediately
Gradual transition over time
Harvesting losses to offset gains
Show Net Improvement: Demonstrate how the after-tax performance will look once the transition is complete.
How Investipal Solves This
OCR + AI: Our tool extracts your client’s holdings and cost basis automatically from a simple upload.
Real-Time Capital Gains Estimates: You see which investments have the highest embedded gains and how much tax each might generate.
Visual Models: Explore phased transitions to spread out the tax impact or apply tax-loss harvesting where possible.
On-Demand Reports: Provide clear documents to help clients make informed decisions.
Seamless Integration: Fold tax modeling right into your existing proposal workflows, saving time and reducing complexity.
Why This Increases Conversions
When you can present a concrete, personalized tax plan, clients see you as a trusted partner. Showing the precise figures removes the fear of the unknown. Instead of “I’ll think about it,” you’ll hear “Let’s do this” because the tax piece is no longer a mystery.
Ready to Show Clients the Full Picture?
If you’re looking to reduce resistance and move prospects confidently into better portfolios, book a demo to see Investipal’s tax transition tools in action. You can also download a sample tax transition report to get a feel for how our platform can simplify your process.
Stop letting tax uncertainty derail your proposals. Give clients the clarity they need—and watch your conversions soar.
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