Theoretically, we all know that if you pay less in taxes, you will have more of your wealth left to use on what you aim for. Despite the fact that everyone would agree that this is true in principle, few people have the fundamental mechanisms in place to achieve this in practice. The reasons for this are diverse, but can be outlined by the fact that it takes time, energy and expertise to make the most of your investments.
Our strategies underline several levels of tax minimisation:
Level 1: Evidence-Based Strategy
An outstanding number of independent, academic researchers conclude that conventional investment management fails to achieve superior after-tax returns. Integrating this knowledge means discarding high turnover and tax-inefficient investment strategies while focusing instead on a scientific portfolio structure intended to be tax-efficient.
Level 2: Tax-Efficient Investments
Investments with lower turnover have greater tax efficiency. On average, Olivier and Mann’s suggested investments are more tax-efficient than most approaches. In addition, when capital gains do occur, a bigger percentage are long-term (vs. short-term) in nature. This is essential because short-term capital gains are taxed at typical income rather than preferential long-term capital gains rates.
Level 3: Tax Loss Harvesting
Olivier and Mann strongly look to sell securities with losses when they arise, not just at the end of the year. These “booked” losses can be offset against realised capital gains on non-portfolio related assets, like real estate.
Level 4: Asset Location
The three primary types of investments accounts are after-tax, tax-deferred and tax-free. Each of these is chosen for particular types of portfolio investment and Olivier and Mann will personalise an asset location strategy for each client.