While unified managed householding (UMH) technology has remained an elusive promise for most TAMP providers, Smartleaf Asset Management (SAM) stands apart by delivering true automation of tax-optimized portfolio management at the household level. Through sophisticated technology, comprehensive tax management, and a commitment to removing operational barriers, the firm has established itself as a leading turnkey asset management platform that can transform advisor capabilities without adding complexity.
In an interview with The Wealth Advisor’s Scott Martin, Jerry Michael, President of SAM, discussed how the company’s groundbreaking automation technology is shaking up the TAMP landscape by transforming household-level tax management, freeing advisors to focus on client relationships while delivering measurable tax alpha across entire households—accomplishing what many firms have promised but few have achieved.
Automation That Works—Not Just in Theory
SAM’s service leverages the rebalancing automation platform of its parent, Smartleaf. Automation is often discussed in wealth management, but many firms still rely heavily on manual processes. Smartleaf has proven that true automation isn’t just possible—it delivers real results. “Three-quarters of Smartleaf SaaS clients did not alter or modify the system’s automated recommended trades for highly personalized tax-optimized accounts for a single account once in the entire year,” Michael notes.
Such reliable automation changes the game for advisors: they can hand off the complex day-to-day portfolio management with confidence that the system will execute as designed, benefiting from the efficiency of automation without sacrificing control over their investment strategies. Most importantly, it frees advisors to spend their time where it matters most: serving clients and growing their business.
Household-Level Tax Optimization: The Core Advantage
Smartleaf’s defining strength is its ability to manage an entire household’s portfolio as a unified, tax-efficient entity. Instead of treating each account in isolation, a common limitation of traditional TAMP platforms, Smartleaf automates a sophisticated tax management strategy across both taxable and tax-advantaged accounts.
When rebalancing is needed, SAM’s methodology follows a clear hierarchy: if you have to reduce exposure to an asset class that is overweighted at the household level, first see if you can sell the asset class at a loss in taxable accounts. If that is insufficient, sell the asset class in a qualified account, effectively using them as what Michael describes as “tax-free rebalancing centers.” As a last resort, realize gains in taxable accounts, selecting the least tax-impactful option. This systematic approach ensures tax efficiency across the entire household while maintaining the desired asset allocation.
As Michael explains, the innovation isn’t in the strategy itself but in the automation that makes it accessible to every client: “We haven’t invented anything new. What’s new is that it’s automated, so you can now provide this to every client of every size. There’s no size cutoff anymore for any of this.”
Automation’s Real-World Impact in Market Volatility
The true test of any investment platform comes during market turbulence, when every client’s account might require rebalancing in a single day. Michael offers an example of how Smartleaf’s automation proved invaluable during the March 2020 market crisis: at one of Smartleaf’s client firms, “every taxable account was traded at least once,” but this task was handled by a single staff member working part-time. The client-facing advisors were free to reach out to clients, which they did an average of five times. The result? Tax savings worth 3.5% of portfolio value and improved portfolio risk characteristics. This combination of hands-on client service and efficient portfolio management led to business growth. As Michael reveals, “Their increase in wallet share in the following few months was greater than in the previous 18 months combined.”
The success story illustrates a key advantage of automation: by freeing advisors from portfolio management tasks during market stress, they can focus on proactive client communication when it matters most.
Beyond Taxes: Personalization at Scale
Although tax management forms the foundation of Smartleaf’s offering, the platform’s capabilities extend into sophisticated portfolio personalization that can be implemented instantly across an entire books of business. Advisors can deploy religious or social screens, execute multiyear transitions, and make tactical asset allocation changes across their entire client base in a single day.
The platform makes complex customization simple: advisors can interactively model different scenarios with clients, instantly seeing the tax implications of various screens or transitions. “You might put in a tobacco screen, and we’ll instantly tell you, ‘This requires us to sell all your tobacco stocks. Here they are. And this is what the tax consequence will be,’” Michael explains.
The real-time modeling capability shifts client conversations from abstract discussions about values and preferences to concrete, actionable plans that account for tax implications and portfolio impact.
Demonstrating Value: Daily Tax Savings Reports
A common challenge in wealth management is proving ongoing value to clients. SAM solves this issue with its “Taxes Saved or Deferred Report,” providing daily, account-specific documentation of tax savings. While TAMP reporting often focuses solely on investment performance, Smartleaf’s approach quantifies the tangible benefits of tax-aware portfolio management.
“You get to tell the client, ‘We have saved or deferred this much in taxes,’” Michael explains. “It’s not an average. It’s specific to every account and every household.”
The daily-updated documentation provides advisors with powerful evidence of their impact on clients’ after-tax wealth, helping justify advisory fees while reinforcing the benefits of comprehensive household-level management.
Flexible Service Models
Smartleaf offers two distinct service approaches. SAM’s parent company, Smartleaf, Inc., offers a software-as-a-service (SaaS) solution used by large wealth advisors, banks, and platforms including Advisor Engine, Altruist, SEI, and Zoe. SAM offers subadvisory services powered by Smartleaf software, Michael notes.
Unlike some TAMPs, SAM doesn’t compete with advisors on investment decisions or asset allocation. Instead, it focuses purely on implementing the advisor’s chosen strategy with maximum tax efficiency and minimal operational overhead. The unique positioning allows Smartleaf to serve as a true technology partner rather than an outsourced investment manager.
A Philosophy of Removing Barriers
At the heart of SAM’s approach is a commitment to eliminating operational complexity while preserving advisor autonomy in strategic decisions. “We just want to make sure that operational barriers are never the reason for your decisions,” Michael states. “So that the only reason to do something or not do it is whatever you think is in the best interest of your client.”
This philosophy extends to every aspect of their service, setting them apart from traditional TAMPs that often require advisors to adapt to rigid systems and processes. Whether implementing direct indexing, social screens, or tax-sensitive transitions, the operational complexity remains the same—minimal. This feature allows advisors to focus on what matters: choosing the right strategies for their clients and building deeper relationships.
The Future of Household-Level Tax Optimization
As the wealth management industry continues to evolve, a focus on automated tax optimization and household-level management positions SAM as a crucial partner for firms and advisors seeking to enhance their service offerings. Smartleaf’s proven track record of successful automation, comprehensive approach to tax management, and commitment to removing operational barriers suggests it will continue to lead innovation in portfolio management technology.
For financial advisors seeking to deliver sophisticated tax management and personalization to clients of all sizes while maintaining focus on relationships and strategic guidance, SAM offers a compelling partnership opportunity that truly delivers on the long-promised potential of unified managed household technology.
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