Stop absorbing tax-loss harvesting inside the AUM fee. Sell it as its own line.
Why this offering, why now
Direct indexing crossed $864B in AUM by year-end 2024, nearly double 2021, and Cerulli projects it to cross $1T in 2026, growing faster than ETFs, mutual funds, or SMAs. Direct-indexed portfolios harvest 3.8x more tax losses than ETF-only portfolios, and 62% of wealth firms expect usage to increase.
59% of wealth professionals call direct indexing “essential” for HNW clients in MSCI’s 2026 Wealth Trends Report. The tax-management overlay is no longer differentiation; it’s the new floor for HNW work.
The platform layer is mature. Parametric does daily tax-loss harvesting at scale. Vanguard Personalized Indexing, 55ip, and Frec ship direct indexing into advisor channels. Holistiplan holds 38.92% market share in advisor tax-planning software (T3/Inside Information 2026), and FP Alpha and Nitrogen’s AI Tax Center round out the stack. None of these vendors sell the offering on the firm’s behalf.
Kitces is naming tax strategy as the profession’s defining differentiator for 2026, on the argument that lifetime tax drag is measurable, durable, and directly attributable to advisor value. The argument only pays off if the work is named and priced as its own service, not absorbed inside the AUM bundle.
What it is
A productized service line built on a direct-indexing portfolio plus a structured annual tax-planning cycle. The platform handles continuous tax-loss harvesting. The firm runs the annual review: capital-gains timing, charitable strategy, and multi-account coordination across taxable, IRA, and trust assets.
The pricing mechanic is the design choice. The firm can price the service as a flat annual fee, a tiered subscription, a percentage of realized tax savings, or a combination. What it can’t do is leave the work absorbed inside the AUM fee, because the platform layer is already pricing the mechanical part of the work at near-zero.
The offering is most defensible when the firm publishes the planning cycle, names the deliverables, and reports the client’s realized tax outcome each year.
Who buys it
HNW individual with meaningful taxable brokerage assets who wants direct indexing and an annual tax-planning cycle priced as its own service line.
The Q4 tax-loss harvesting cycle exposes a manual-process capacity ceiling, or a prospect arrives asking why the firm’s tax-management approach isn’t separately priced when a competitor’s is.
What the firm gains
- A named tax service line with a measurable client-side outcome (realized tax savings).
- Continuous tax management at portfolio scale without proportional staff growth, because the platform layer does the harvesting.
- A second line of recurring revenue that doesn’t collapse when the AUM fee compresses.
- A defensible HNW positioning at a moment when 59% of wealth professionals call direct indexing essential for that client tier.
Why a mid-market firm can win this
The heavy infrastructure (custody, direct-indexing engines, tax-planning software) is rentable. What only the firm can deliver is the planning cycle on top: knowing the client’s full picture across business, real estate, trust, and charitable structure, then timing decisions against it. A mid-market RIA with 50–200 HNW clients has both the relationships and the domain depth to ship this without building proprietary tax-engine infrastructure.
What it takes to design properly
- Pricing mechanic: flat fee, tiered subscription, percentage of realized tax savings, or hybrid.
- Which platform partner does the tax-management work and how the firm’s service shows up on top of it.
- Annual planning cycle: deliverables, timing, client-facing reporting, and how the outcome gets named.
- Recordkeeping and disclosure design for AI use in tax modeling under SEC 2026 examination scope.
These are the decisions the Workshop helps financial advisory firms answer for their specific firm. You leave with the offering specified end to end and ready to test with a named client.
The pressure this responds to
Other offerings for Financial Advisory Firms
Subscription comprehensive planning
A flat monthly or annual fee for comprehensive planning with AI in the workflow, sold separately from portfolio management.
AI-augmented estate planning advisory
Document intake and AI summarization, advisor-led strategy and beneficiary review, attorney coordination, priced per engagement or as a planning retainer.
$15,000
Fixed fee. A full day with your senior team. 2–3 new offerings your team or an implementation partner builds and tests.
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