Year in Review: Our Value to Advisors & Their Clients

As we at 55ip reflect on 2020 and the challenges it presented, we feel incredibly fortunate that we were still able to make game-changing strides in our mission: to help advisors break down barriers to financial progress. We now have over 120 advisors with over $30 billion in discretionary assets using 55ip. Here are our highlights for what really mattered in 2020: how we delivered value to them and their end-clients…

Helped Advisors Generate 2.58% in Average Tax Savings

Advisors used our ActiveTax Technology® to differentiate and deliver better client outcomes. For accounts that had 55ip’s ActiveTax Technology® overlay for all of 2020, advisors generated an estimated average of 2.58%** in tax savings for their clients, in what the Wall Street Journal called the “perfect year” for tax-loss harvesting.

Drove Practice Growth & Better Outcomes with Tax-Smart Transitions

Advisors using 55ip took full advantage of tax-smart transitions as way to win new clients and transition existing clients to updated portfolios. In the volatility of early 2020, 68%* of 55ip-powered accounts using tax-smart transition were able to leverage volatility to complete their portfolio transitions with zero additional tax budget.

Empowered Advisors With More Tax-Smart Model Choice

We helped advisors meet the needs of more end-clients by expanding their choice for tax-smart model portfolios. The year began with the launch of our BlackRock strategic alliance, and later in the year we added J.P. Morgan and WisdomTree, as well as announced our partnership with Riverfront Investment Group. Plus, we enhanced our tax-smart investment strategy engine to include models with mutual funds, in addition to ETFs.

Launched New Cash Management Functionality

Advisors now have access to an improved cash management functionality including an enhanced tax-smart withdrawal experience, systematic withdrawals, and the ability to auto-invest dividends and other excess cash.

Invested in Our Clients

Delivering an experience isn’t just about the product. We also invested in our Advisor Success Team to provide a higher level of service, collaboration, and partnership, bringing on new team leadership, new Advisor Success Managers, and a more structured, supported onboarding process designed to ensure that advisors meet their stated goals for success with 55ip. We also built out our practice management resources, such as content and additional educational webinars, becoming an approved provider of CE credits through the CFP Board.

Looking ahead to 2021, we’re excited to accelerate our pace of innovation as an independent, separately branded subsidiary of J.P. Morgan. Stay tuned for new model provider partnerships, meaningful new products, and other developments that will make 2021 an even bigger year for breaking down barriers to financial progress.

* Source: 55ip, as of 12/31/20.

** Source: 55ip. 2.58% reflects the estimated average 2020 tax savings for clients using 55ip’s tax-smart technology based on a composite of all accounts incepted by 12/31/2019 that selected tax management services and were active for the full 2020 calendar year. The tax savings are gross of fees.  The deduction of a fee reduces an investor’s return and/or respective tax savings. Calculation methodology:  Average tax savings are calculated by comparing the client’s actual account activity with a shadow account created by 55ip. The shadow account has the same inception date and is invested in the same model as the client’s actual account, but does not incorporate 55ip’s tax-smart technology for rebalancing. Gains and losses are accrued for both the client’s actual account and shadow account to produce the estimated tax bill. The tax rate applied to the client’s actual account and the shadow account are provided by the client’s advisor. If no tax rate is provided, then the highest applicable federal tax rate (20% for long-term gains/losses and 37% for short-term gains/losses) is assumed and an additional 3.8% net investment income tax rate is applied to both accounts. The estimated tax bill of the client’s actual account is then compared to the estimated tax bill of the shadow account, and the shortage of the former amount is the client’s estimated tax savings. There is no guarantee that the estimated tax and subsequent projected tax savings will equal the actual tax liability/tax savings achieved by the client. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.