Smarter Tax Strategies with Direct Indexing

Taxes can be one of the biggest drags on long-term portfolio performance. And in today’s market, clients are more tuned in than ever to the impact taxes have on their bottom line.

That’s why Direct Indexing with tax efficiency isn’t just a nice-to-have—it’s quickly becoming essential. And as an advisor, it gives you a clear edge: the ability to provide personalized, tax-smart strategies that mutual funds or ETFs traditionally cannot match.

Why Tax Efficiency Matters

We’ve all had that conversation: a client sees healthy portfolio gains, but flinches come tax season when they owe taxes on those gains. The truth is, without a thoughtful strategy, taxes can erode returns in ways clients don’t expect, especially in taxable accounts.

With AssetMark’s Direct Indexing, clients own individual stocks within an index rather than a pooled fund that tracks the index. This means you can strategically manage each security’s tax lot; you have the ability to harvest losses, offset gains, and manage withdrawals more precisely.

And with AssetMark’s Tax Management Services (TMS) built in, this becomes a proactive process—not something you scramble to address at year-end.

How It Works

While the index as a whole might be up in price, certain individual stocks may be down. With Direct Indexing, you can:

• Sell underperforming stocks to capture losses.
• Use those losses to offset gains elsewhere in the portfolio.
• Reinvest the proceeds in similar (but not identical) securities to maintain exposure and comply with wash sale rules.

Remember, this isn’t just a once-a-year event. TMS enables ongoing, automatic, daily optimization, scanning for new opportunities to create tax savings for clients, all while keeping the portfolio aligned to the index.

The Client Conversation

With Direct Indexing, you can show clients how a thoughtful, year-round tax strategy can make a meaningful difference. It’s not just about minimizing taxes today—it’s about implementing that strategy over time. Less tax drag on returns, can mean more money staying invested, working toward their long-term goals.

It’s also a differentiator. Clients appreciate it when their advisor goes beyond market returns and takes their full financial picture into account, including taxes.

The Advisor Advantage

Direct Indexing with built-in tax management allows you to bring institutional-grade technology to a broader range of clients. You get to lead with value, demonstrate proactive planning, and strengthen client relationships, all while helping to keep more of what they earn.

Bottom Line

Direct Indexing isn’t just about control or customization, it’s about making smart decisions with tangible outcomes. And when you pair it with tax management, you’re offering something powerful: an efficient path to help achieve your client’s long-term financial goals.

Ready to learn more? Get started today.

IMPORTANT INFORMATION

This is for informational purposes only, is not a solicitation, and should not be considered investment, legal or tax advice. The information has been drawn from sources believed to be reliable, but its accuracy is not guaranteed and is subject to change. Investors seeking more information should contact their financial advisor.

Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss. Actual client results will vary based on investment selection, timing, market conditions, and tax situation.

It is not possible to invest directly in an index. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Index performance assumes the reinvestment of dividends.

The exclusion of investments based on industry or ESG factors reduces the number of available investment choices and can impact overall investment performance.

Tax Management Services (TMS) is designed to improve the after-tax return for the client’s account, consistent with the risk/return profile of the investment models based on the selected tax sensitivity. TMS may cause the account to deviate from the investment models and can affect the risk profile and performance of the account.

For more complete information about the various investment solutions available, including the investment objectives, risks, and fees, please refer to the Disclosure Brochure and applicable Fund Prospectus. Please read them carefully before investing. For a copy, please contact AssetMark or your Financial Advisor.

AssetMark, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission.

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7993059.1 | 05/2025 | EXP 05/31/2027

For financial advisor use only.