Conversation about... Tax Management

A client wrote the following:

After our meeting I realized I had made an assumption that I should confirm with you. Once the transfer of our portfolio is complete, I assume you will consult with us as you determine what should be sold and when in order to reach the balance you want. The point is that some equities have a low basis and if you think one or more should be sold, I want to be sure it is done in a way that minimizes our tax liability.

I understand that, once our holdings are adjusted or sold and reinvested to reach the portfolio you recommend we have, you do not call us for permission to make adjustments from time to time. Is that correct? If so, do we see the changes in the electronic reports we will receive?

Here is Benton's response:

Once we have everything here and have the cost basis in our system, we will develop our proposed trades and they will definitely consider taxes. I will be in touch with you before we make our first round of trades. Going forward you will be pleased with our tax efficient management of your accounts.

On an ongoing basis, you are correct, we will manage your accounts on discretion but we will always be directed by the written investment policy statement which is quite specific as to what the portfolio is to look like. This will be a change for you but I think you will like it. We have no incentive (no commissions) to make a trade except when we think it is in your best interest.

You will be able to follow all activity via paper confirmations, monthly statements, or by using the online site www.braggfinancial.com.