Quick Snapshot: Who Are Your Clients?

• How would you describe the typical client profile you serve (select the closest AUM band)? Options: $1M–$5M, $5M–$10M, $10M–$25M, $25M–$50M, >$50M
• Which account types do you most frequently consider for SMA placement? Options: Taxable individual, Trust, IRA/Retirement, Revocable trust/Family office, Custodial/UGMA/UTMA, Employer-sponsored plan
• Roughly how many client households per year do you actively evaluate for separately managed accounts? Options: 1–5, 6–20, 21–50, 51–100, 100+
• Tell me about a recent client who felt like a perfect fit for an SMA—what specific characteristics made that true?
• Which custodians hold most of your client assets today? Options: Schwab, Fidelity, Pershing, TD Ameritrade/Schwab, BNY Mellon, Other
• How familiar are your clients with the differences between direct security ownership and commingled funds? Options: Very familiar and prefer direct ownership, Somewhat familiar and open to explanation, Rarely familiar and need education, Not familiar at all
• What onboarding, compliance, or documentation requirements do you routinely need satisfied before recommending an SMA?

Are You Settling for 'Good Enough' Tax Outcomes?

• Looking back over the last two years, how much have realized taxes eroded your taxable clients' returns relative to expectations? Options: Less than 0.5% p.a., 0.5%–1.0% p.a., 1.0%–2.0% p.a., More than 2.0% p.a., We don't track realized tax drag
• Describe a transition or trade that produced an unexpected tax outcome—what happened and who felt the impact most?
• How important is systematic daily or periodic tax-loss harvesting versus occasional opportunistic harvesting for your clients? Options: Critical for most clients, Important for tax-sensitive clients only, Nice to have but not required, Not a priority
• Which client segments in your book are most sensitive to tax drag? Options: High-income individuals, Older retirees, High-net-worth business owners, Clients with short holding periods, All taxable clients
• Do you currently measure after-tax returns and tax drag at the account or household level (or not at all)? Options: Account level, Household level, Both, Neither
• What annual after-tax drag target would make you say an SMA is performing well on tax outcomes? Options: Under 0.5% p.a., 0.5%–1.0% p.a., 1.0%–1.5% p.a., No strict target; consistency matters more
• Are there specific basis or lot-management issues—like missing historical cost basis—that regularly complicate transitions for you?

What Legacy Holdings Keep You Up at Night?

• Which single legacy holding in a typical client account would most likely derail your planned SMA transition?
• How many clients hold concentrated positions that exceed 20% of a taxable account? Options: None, A few (1–5), Some (6–20), Many (20+)
• What is your current process for managing the sale or retention of concentrated stock when moving into an SMA?
• How long can clients tolerate a phased or tax-aware exit from a concentrated position? Options: Immediate full sale, A few weeks, 1–6 months, 6–12 months, Over a year
• Do you require pre-transaction approvals, valuations, or holdbacks for restricted/illiquid positions? Options: Yes, always, Sometimes depending on the asset, Rarely, Never
• How do clients typically feel when you recommend a gradual, tax-aware transition versus an immediate clean sweep?

How Much Customization Is Non-Negotiable?

• What is the single customization request you receive most often that you are unwilling to compromise on?
• Which customization types must your SMA manager be able to handle? Options: ESG or values-based screens, Single-stock exclusions, Sector/industry exclusions, Tax-lot preservation, Custom cash management, Concentrated position sleeves
• Operationally, how many unique account-level restrictions are you willing to support per client without creating too much complexity? Options: None, 1–2, 3–5, 6–10, 10+
• Do you prefer manager-level standard models with limited customization, or highly bespoke models per account? Options: Standard models with few customizations, Standard models with flexible exclusions, Highly bespoke models per account
• What governance, compliance, or fiduciary constraints limit your ability to accept certain customizations?
• When a customization conflicts with investment discipline, how do you decide which wins?

Custody, Access, and Operational Reality

• If you could change one thing about custodian integrations today, what would it be and why?
• Which model delivery methods must be available for you to consider a manager (select all that apply)? Options: Model signal / trade notifications, Direct model feed (ADT/MAA), Managed account program on custodian, Trade file upload, UMA integration, Third-party platform integration (TAMP)
• What reporting cadence and formats are required for you to monitor compliance, performance, and tax outcomes? Options: Daily position-level files, Weekly snapshots, Monthly performance reports, Quarterly executive summaries, On-demand tax-lot reporting
• Who should own tax-aware transition execution and coordination with the custodian? Options: Manager (Host), Advisor (Guest), Custodian, Third-party transition vendor
• What SLA window for trade error resolution or settlement issues would keep you comfortable? Options: Same day, 1 business day, 2–3 business days, 1 week
• What reconciliation, trade support, or daily ops features are non-negotiable for your operations team?

What Does a Winning SMA Look Like to You?

• If you could choose one KPI that would make you actively recommend this SMA to clients, what would it be?
• Which benchmarks and peer groups do you default to when evaluating equity and multi-asset SMAs? Options: S&P 500, Russell 1000/3000, Custom blended benchmark, Morningstar category, Barclays/ICE fixed income indices
• What annualized tracking error range do you find acceptable for a manager to stay within style while adding value? Options: Under 1% (very tight), 1%–2% (moderate), 2%–3% (flexible), Over 3% (high active risk acceptable)
• What after-tax alpha or tax drag reduction (absolute or relative) would make a compelling case for your clients? Options: >2.0% p.a., 1.0%–2.0% p.a., 0.5%–1.0% p.a., Consistency and predictability matter more than size
• How important is daily/lot-level transparency versus summary-level reporting for you and your compliance team? Options: Daily/lot-level required, Periodic detailed reporting is fine, Summary-level is usually sufficient
• What specific guardrails or stop-loss rules would trigger a formal review or termination of the SMA relationship?

Bringing It Home: Transition, Pilot, and Timeline

• What's the real reason you have delayed moving accounts into a new SMA up to now?
• Would you consider running a pilot program with a subset of client accounts to validate performance and operations? Options: Yes, with a small pilot (1–10 accounts), Yes, with a medium pilot (11–50 accounts), Maybe, need more information, No
• How many accounts and what aggregate AUM would you realistically allocate to a first pilot? Options: 1–5 accounts, 6–20 accounts, 21–50 accounts, 50+ accounts
• What objective acceptance criteria must be met in the pilot to move to broader rollout (examples: tax drag threshold, tracking error, reporting timeliness)?
• From initial conversation to the first funded account, what timeline feels realistic for your firm? Options: Under 30 days, 30–60 days, 2–3 months, 3–6 months, Longer than 6 months
• Who are the internal stakeholders that must approve an SMA manager on your end? Options: Lead advisor/portfolio manager, COO/operations, Chief compliance officer, Client/family, CIO/investment committee, Other
• What onboarding, training, or client-facing materials would make you confident to present this SMA to end clients?

• Client Scenario Intake & Current State Confirmation
• Consequence Quantification & Impact Modeling
• Transition Pathways & TLH Proof Workshop
• Customization, Risk Controls & Tracking Error Review
• Solution Validation & Client-Facing Case Package

• Publish a client-specific Customization Rulebook that will be applied programmatically to the account.
• Confirm TLH controls and wash-sale protections meet advisor and client constraints.
• Obtain advisor sign-off on execution parameters and any exceptions to escalate.
• Identify owners and timeline for execution (custodian instructions, transition windows).
• Finalize and distribute the transition playbook (trade sequence, lot selection rules, replacement securities).
• Assign execution owners (PM, trading desk, advisor) and schedule the transition window with custodians.
• Document any exception requests (e.g., special treatment for concentrated stock) and escalate for approval.
• Re-affirm Future State Metrics
• Define customization limits and how they will be operationalized without undermining the future state.
• Quantify the expected tracking error and return impact under the agreed constraints.
• Agree on monitoring, reporting, and escalation SLAs to detect and correct deviations.
• Secure advisor acceptance of customization trade-offs and thresholds.
• Introductions & Objectives
• Update model-delivery and reporting specifications to reflect agreed SLAs and tracking-error thresholds.
• Set up automated monitoring triggers and sample reports to be shared monthly with the advisor.
• Present Consolidated Recommendation
• Obtain advisor approval to proceed to execution with documented acceptance criteria.
• Deliver client-ready materials that translate the technical proof into a succinct client narrative.
• Agree on execution timeline, owners, and the Deployment kickoff date.
• Ensure all outstanding operational blockers are captured and assigned.
• Deliver final client-facing slide deck and one-page executive summary within 48 hours.
• Collect advisor's formal approval/signature to trigger Deployment kickoff and custodian instructions.
• Create the Deployment kickoff agenda and assign owners for each operational task (custodian, trading, reporting).
• Produce a crystal-clear one-sentence current-state statement for each client scenario.
• Surface quantified consequences (tax drag, risk, operational cost) for each scenario to create urgency.
• Agree on prioritized scenarios and confirm required data for modeling.
• Assign owners and timeline for the next modeling workshop.
• Advisor to upload any missing holdings, tax lots, and client preference documents within 48 hours.
• CustomerNode/PM to produce a baseline consequence estimate (dollars/% tax drag) for each scenario before the modeling workshop.
• Schedule the Modeling Workshop and distribute modeling assumptions to participants.
• Recap Current State Sentences & Assumptions
• Demonstrate quantified expected after-tax benefit (or cost) for each transition option.
• Expose key trade-offs (timing, tracking error, realized tax events) so advisor can compare options.
• Obtain advisor confirmation on preferred transition scenario(s) for proof-level demonstration.
• Capture any modeling assumption changes required for final proofs.
• Deliver a scenario modeling report summarizing baseline and TLH outcomes with clear dollar impact and sensitivity ranges.
• Update models per advisor feedback and prepare data subset for the Transition Proof Workshop.
• Identify any regulatory or custodian constraints uncovered during modeling for operational planning.
• Confirm Chosen Scenario & Acceptance Criteria
• Prove with trade-level evidence that the modeled after-tax outcomes are operationally achievable.
• Pre-work Data Verification
• Transition Option Walkthrough
• Modeling Methodology & Assumptions
• Customization Rules & Enforcement
• Review KPIs and Acceptance Criteria
• Create One-Sentence Current State(s)
• Baseline vs. TLH Transition Scenarios (Live Run)
• Client-Facing Materials Walkthrough
• Quantify Impact on Tracking Error & Returns
• Live Trade-Level Simulation
• Rebalancing, Monitoring, and Reporting SLAs
• Execution Timeline, Owners & Approvals
• TLH Mechanics & Wash-Sale Controls
• Translate Results into Consequences
• Quantify Immediate Consequences
• Final Validation & Next Steps
• Advisor Validation & Trade-offs Discussion
• Validation & Acceptance of Limits
• Prioritize Scenarios for Modeling
• Operational & Custodian Touchpoints

• Construct tax-optimized U.S. equity SMA portfolio
• Construct tax-optimized international equity SMA portfolio
• Construct fixed income SMA portfolio
• Implement systematic tax-loss harvesting
• Execute customized transition from legacy holdings
• Manage client-specific restrictions and ESG screens
• Handle concentrated stock positions and blocking rules
• Trade execution, cash management, and settlement
• Portfolio rebalancing and drift management
• Tax-lot accounting with wash-sale controls
• Deliver daily position-level transparency and statements
• Model delivery to RIA custodial platforms
• UMA integration and model linking

Construct tax-optimized U.S. equity SMA portfolio

• Which U.S. equity style(s) should be available as selectable models (e.g., large-cap value, growth, core)? Options: Large-cap value, Large-cap growth, Core/multi-style, Small/Mid-cap, Factor-based (e.g., quality, momentum), Custom
• What benchmark(s) should be used for performance and tracking-error monitoring? Options: S&P 500, Russell 1000, Russell 3000, Custom benchmark, Other
• What target tracking error bands are acceptable for the strategy (annualized)? Options: < 1%, 1% - 2%, 2% - 4%, 4%+
• Are there preferred sector or position concentration limits for U.S. equity models (e.g., max 25% financials)? Options: Yes - we will provide limits, No - default model limits acceptable, We need recommendation
• Describe the tax-optimization priority for the model (e.g., maximize short-term loss harvesting, minimize realized gains, defer turnover).
• Do you require held-away or legacy assets to be factored into model construction or risk budgeting? Options: Yes, No, Unsure - need consult
• Is there a required minimum account size to receive this SMA model? Options: <$250k, $250k-$1M, $1M-$5M, $5M+

Construct tax-optimized international equity SMA portfolio

• Which international exposures should be offered (e.g., developed ex-US, emerging markets, regional mandates)? Options: Developed ex-US, Emerging markets, Europe-only, Asia-only, Global ex-US, Custom/Regional
• What currency-hedging preferences apply to international models? Options: Fully hedged, Partially hedged, Unhedged, Custom per account
• What benchmark(s) should be used for international strategies? Options: MSCI ACWI ex USA, MSCI EAFE, MSCI EM, Custom
• Are there country, sector, or single-stock limits that must be enforced for client accounts? Options: Yes - provide list/limits, No - use standard model limits, Need guidance
• How should tax-optimization be balanced against currency and geopolitical risk for these portfolios?
• Do you require separate reporting for withholding tax reclaims or foreign tax credits? Options: Yes, No, Unsure

Construct fixed income SMA portfolio

• Which fixed income sleeves are required (e.g., core bond, municipal, TIPS, high yield, laddered)? Options: Core/core plus, Municipal (taxable/exempt), TIPS, High-yield, Short-duration, Custom ladder
• What duration/interest-rate sensitivity targets should the model maintain? Options: Ultra-short (<1), Short (1-3), Intermediate (3-7), Long (7+), Custom
• Are there credit quality minimums (e.g., investment-grade only) or max allocations to lower-quality bonds? Options: Investment-grade only, Allow up to BB, Allow high-yield allocation, Custom limits
• Do you require tax-aware muni vs. taxable sourcing or municipal-specific optimization for taxable accounts? Options: Yes - municipal optimization, No - taxable only, Depends on account
• How should cash buffers and liquidity be managed for income needs and settlement? Options: Target cash %, Flexible cash for trades, Separate cash management policy
• Are laddering, bullet, or barbell positioning preferred for fixed income allocations? Options: Laddering, Bullet, Barbell, Combination/Custom

Implement systematic tax-loss harvesting

• Which accounts are eligible for systematic tax-loss harvesting (by account type or minimum size)? Options: All taxable accounts, Taxable over threshold, Only specified accounts, Not applicable
• What frequency of loss-harvest harvesting is preferred (daily, weekly, opportunistic monitoring)? Options: Daily, Weekly, Monthly, Event-driven only
• What replacement-security rules do you require to maintain exposure while avoiding wash sales? Options: Predefined tax-loss swap universe, Custom replacement list, Manager discretion with guardrails
• What thresholds trigger harvesting (e.g., % loss, absolute $ loss, tax-benefit threshold)? Options: % decline triggers, $ loss triggers, Tax-benefit threshold, Manager discretion
• Do you require integrated wash-sale controls across household/linked accounts? Options: Yes - household level, No - per-account only, Partial - advisor/group
• Are there reporting requirements for harvested events (tax lots realized, tax benefit estimates) and cadence? Options: Daily event log, Monthly summary, Quarterly, On-demand

Execute customized transition from legacy holdings

• What types of legacy holdings will be transitioned (separate equity lots, mutual funds, concentrated positions, options)? Options: Individual equities, Mutual funds, ETFs, Options/derivatives, Other
• What is the acceptable timeline and cadence for transitions (single-day, staged over weeks/months, tax-aware opportunistic)? Options: Single-day full transition, Staged over weeks/months, Tax-aware staged transitions, Custom timeline
• Are there mandatory holdback or cash reserve requirements during transition? Options: Yes - specify amount, No, Need recommendation
• Do transitions need to minimize realized gains (loss harvesting first) or prioritize speed of completion? Options: Minimize realized gains, Prioritize speed, Balance both
• Should transitions include a service-level plan (owners, milestones, communications) and who will be the custodian contact? Options: Yes - include owners and timeline, No - lightweight plan, Unsure
• Are there legacy positions that must never be sold (e.g., client restriction) or that require special handling (e.g., restricted stock)? Options: Yes - provide list, No, Some - will provide later

Manage client-specific restrictions and ESG screens

• What types of client restrictions do you need supported (issuer/block list, sector exclusions, product-level ESG screens)? Options: Issuer exclusions, Sector exclusions, Country exclusions, ESG positive/negative screens, Custom compliance constraints
• Do you require pre-trade validation to prevent restricted securities from being purchased? Options: Yes - hard block, Yes - soft warning, No pre-trade validation
• How will clients specify restrictions (advisor portal entry, templated selections, onboarding questionnaire)? Options: Advisor portal, Onboarding questionnaire, API / file upload, Custodian profile sync
• Do restrictions need to be enforced across multiple accounts/households or only per-account? Options: Per-account, Household-level, Advisor-level template
• Are there dynamic ESG score thresholds or periodic re-evaluation requirements? Options: Yes - dynamic thresholds, No - static list, Review periodically
• Please list any regulatory or client-mandated restrictions that require documentation or audit trails.

Handle concentrated stock positions and blocking rules

• Do you accept concentrated positions in client accounts or require them to be excluded from models? Options: Accept and manage, Exclude from models, Custom handling per account
• What blocking rules for concentrated stocks are required (e.g., never sell below X shares, min market cap, lock periods)? Options: Never sell below X shares, Minimum market cap threshold, Lock period required, No special blocking
• Should the platform support multi-account aggregation for blocking rules (e.g., spouse accounts aggregated)? Options: Yes - aggregate, No - per-account only, Aggregation by household
• Is active trading permission required from advisor/client for any trade involving a concentrated position? Options: Yes - manual approval, No - manager discretion with guardrails, Case-by-case
• Do you require tax-aware monetization strategies (e.g., hedging, prepaid sales, 10b5-1 plans) offered for concentrated positions? Options: Yes - offer strategies, No, Referral to specialist
• Describe any blackout dates or insider trading restrictions that must be enforced for concentrated or restricted securities.

Trade execution, cash management, and settlement

• Which custodians/ODD execution venues should be supported initially (e.g., Schwab, Fidelity, Pershing)? Options: Schwab, Fidelity, Pershing, Other/Custom
• Do you require best-execution reporting or transaction cost analysis for trades? Options: Yes - full TCA, Summary TCA, No
• What cash management policy is preferred for accounts (sweep to money market, held cash buffer %, auto-funding)? Options: Sweep to money market, Maintain cash buffer %, Auto-funding from linked accounts, Custom policy
• Are there settlement timing requirements or constraints (e.g., T+1 preference, cross-custodian settlement issues)? Options: Standard T+2 acceptable, Require faster settlement (T+1), Cross-custodian constraints exist
• Should trades be aggregated/blocked across accounts for execution efficiency, and if so, what allocation rules apply? Options: Block/aggregate and pro-rata allocate, No blocking - account-level trades, Block with custom allocation rules
• Do you require pre-trade cash checks and failed-settlement monitoring with automated remediation? Options: Yes, No, Partial - advisor notified

Portfolio rebalancing and drift management

• What rebalancing triggers are preferred (time-based, threshold-based, hybrid)? Options: Time-based (quarterly), Threshold-based (% drift), Hybrid/time+threshold, Event-driven only
• What drift thresholds should prompt rebalancing for strategic allocations? Options: 1-2%, 2-4%, 4-6%, Custom
• Should rebalancing be performed tax-aware in taxable accounts (harvest losses before rebalancing)? Options: Yes - tax-aware, No - rebalance regardless, Partial - manager discretion
• Do you want automated rebalancing windows and owner approvals or manual sign-off per account? Options: Automated with alerts, Manual approval required, Automated for small accounts, manual for large
• Are intra-day drift controls required (e.g., pause trading if market moves exceed threshold)? Options: Yes, No, Conditional
• Please describe any special rebalancing rules for tax-advantaged vs taxable accounts.

Tax-lot accounting with wash-sale controls

• Which tax-lot accounting method is required (FIFO, LIFO, HIFO, Specific ID)? Options: FIFO, LIFO, HIFO, Specific ID, Custom
• Do you require integrated wash-sale detection across all linked accounts and across custodians? Options: Yes - cross-account and cross-custodian, Yes - per-custodian only, No
• How should re-characterized or disallowed losses be tracked and reported? Options: Auto-apply to replacement lots, Flag and report only, Advisor-managed
• What audit/logging granularity do you require for lot selection and wash-sale decisions? Options: Full audit trail (per-lot), Summary-level audit, Minimal logging
• Do you require exportable tax-lot files compatible with tax-preparer software (e.g., CSV, specific schema)? Options: Yes - specific schema, Yes - generic CSV, No

• Statement of Work (SOW)
• Investment Management Agreement (IMA)
• Custody & Model Access Agreement
• Transition Services Agreement
• Service Level Agreement (Operational SLAs)
• Fees & Billing Authorization
• Customization & Restrictions Addendum
• Model Delivery & Integration Statement
• Data Processing & Privacy Agreement (DPA)
• Account Opening & Transfer Authorization
• Compliance & Regulatory Attachments
• Mutual Acceptance & Go-Live Sign-off

• Performance Validation Workshop
• Tax Outcomes & TLH Deep Dive
• Operational Handoff & SLA Confirmation
• Shared Channel & Continuous Improvement Governance
• Representative Account Validation Session

• Agree and document the triage workflow and response SLAs for issues and enhancements.
• Prove with account data that TLH delivered the reported tax outcomes.
• Surface and quantify any missed harvest opportunities or wash-sale impacts.
• Agree on TLH parameter changes (if any) and operational steps to implement them.
• Obtain advisor validation that the tax reporting meets their client-communication needs.
• Provide TLH ledger and realized/unrealized tax summary for each reviewed account.
• Model and deliver two alternate TLH parameter scenarios and expected tax impact.
• Document any agreed changes to TLH triggers or exclusion rules and assign implementation owner.
• Current Operational-State Snapshot
• Finalize and document operational ownership for all steady-state activities.
• Agree on measurable SLAs and how they are monitored and reported.
• Establish clear escalation paths and incident response owners.
• Obtain formal sign-off to transition to steady-state operations.
• Publish final RACI, SLA document, and handoff checklist to the shared channel.
• Create operational runbooks for transition execution and tax reporting.
• Set up automated SLA monitoring and weekly operational dashboard delivery.
• Current Communication-State
• Create a single, named shared channel with defined access and ownership.
• Clear Current-State Statement
• Establish a governance cadence and metrics to track channel effectiveness.
• Create the shared channel, invite the initial stakeholder list, and post governance notes.
• Publish the issue severity matrix and triage SLA document to the channel.
• Schedule recurring weekly triage and monthly roadmap review meetings.
• One-line Current State per Account
• Validate account-level performance and tax reporting against source records.
• Agree remediation steps for any discrepancies with owners and deadlines.
• Produce advisor-approved, client-ready summaries for communications.
• Deliver client-ready one-page summaries for each reviewed account.
• Execute agreed remediations (data fixes, trade corrections) and report completion.
• Confirm custodian notifications (if required) and document conversations.
• Establish an unambiguous current-state performance baseline that all parties agree on.
• Confirm the material consequences (tax and tracking costs) tied to current performance gaps.
• Agree on acceptance criteria for 'success' (benchmarks, tracking-error thresholds, tax outcome targets).
• Assign owners and timelines for remediation or monitoring changes.
• Deliver reconciled performance report with account-level attribution within 5 business days.
• Publish agreed tracking-error thresholds and monitoring alerts.
• Schedule follow-up validation after 30/90 days to confirm trend direction.
• One-line Current-State: TLH Performance
• Consequences of Operational Gaps
• Explicit Consequences of Tax Outcomes
• Consequence per Account
• Consequences of Poor Communication
• Explicit Consequence Review
• Defined Future-State Summary
• Future-State Tax Objective
• Defined Future-State Collaboration Model
• Desired Future-State per Account
• Future-State Handoff Definition
• RACI and Ownership Matrix Review
• Account-by-Account Data Review
• Data Walkthrough: Performance vs Benchmark
• Channel Design: Tools, Permissions, and Onboarding
• TLH Process Walkthrough (Proof)
• Issue Triage & Enhancement Workflow
• Tracking Error Attribution
• Reconciliation and Remediation Checklist
• Scenario Modeling & Sensitivity
• SLA & KPI Agreement
• Validation & Forced Confirmation
• Exceptions, Escalation & Disaster Recovery