Knowledge Tree
Relations (1)
cross_type 3.46 — strongly supporting 10 facts
Wealthfront is the provider of the Tax-Loss Harvesting service, which is a core feature of its investment platform as described in [1] and [2]. The service is intrinsically linked to the entity's business model, as evidenced by the performance metrics and client benefits tracked by Wealthfront in [3], [4], and [5].
Facts (10)
Sources
Wealthfront Tax-Loss Harvesting - Methodology research.wealthfront.com 10 facts
claimWealthfront's Tax-Loss Harvesting service calculates short-term losses by multiplying them by the client's estimated short-term capital gains rate, which is the sum of their marginal federal and state income tax rates.
procedureWealthfront's Tax-Loss Harvesting service uses software to check for opportunities to harvest losses daily, allowing the service to capitalize on market volatility throughout the year.
claimWealthfront clients whose tax benefit has not exceeded their total fee for the Tax-Loss Harvesting service tend to be invested in lower-risk portfolios and reside in states with low or no income taxes.
perspectiveWealthfront believes its fully automated tax-loss harvesting service can significantly improve after-tax returns for young people with a long investment time horizon and pay for itself multiple times over.
claimWealthfront has tracked loss-harvesting results for its clients since the launch of the tax-loss harvesting service in October 2012.
measurementThe median ratio of tax benefit to fee for Wealthfront's Tax-Loss Harvesting service is 5.5x, meaning the service pays for itself more than five times over for a typical client.
measurementMore than 95% of Wealthfront clients who used the Tax-Loss Harvesting service for at least a year received more in estimated tax benefit than they paid in fees.
claimWealthfront's Tax-Loss Harvesting service typically generates enough tax savings to cover the advisory fee for almost all Wealthfront clients.
claimWealthfront's Tax-Loss Harvesting service improves the tax efficiency and after-tax returns of Wealthfront's taxable Automated Index Investing portfolios.
claimThe performance of new securities purchased through Wealthfront's Tax-Loss Harvesting service may be better or worse than the performance of the securities that were sold.