Rebalancing and Tax-Loss Harvesting

Institutional Intelligent Portfolios® employs a sophisticated algorithm that simultaneously incorporates an automated rebalancing and tax-loss harvesting strategy as part of one process.

The algorithm is designed to maintain a portfolio that closely tracks a strategic asset allocation set by you, the advisor. The portfolio is rebalanced as needed to maintain targeted asset class weightings over time. This disciplined process helps keep the level of portfolio risk commensurate with the goals, risk willingness, and risk capacity of the client's target asset allocation. Once an account is funded with at least $5,000, the portfolio is monitored daily and rebalanced automatically when the individual asset class weighting exceeds the drift tolerance threshold relative to the targeted weighting.

Institutional Intelligent Portfolios offers automated tax-loss harvesting with the goal of capturing tax-deductible losses and improving a client's after-tax, risk-adjusted rate of return. If you choose to offer tax-loss harvesting to your clients, those with account balances of at least $50,000 may enroll for daily automated tax-loss harvesting monitoring. Tax-loss harvesting opportunities are implemented when the loss from a potential sale exceeds a set threshold of total portfolio value.

You'll need your Schwab Advisor Center® credentials to access the complete whitepaper. If you're not a client of Schwab Advisor Services™ and want to learn more, please call 877-687-4085 or contact a local office.

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Important disclosures:

Tax-loss harvesting is available for clients with invested assets of $50,000 or more in their Institutional Intelligent Portfolios® account. Clients must be enrolled to receive this service.

Automatic investing and rebalancing strategies do not ensure a profit and do not protect against losses in declining markets.

Institutional Intelligent Portfolios® (“IIP”) is a technology and service platform made available by Schwab Performance Technologies (“SPT”) to independent investment advisors (“Advisors”) who maintain a business relationship with Schwab Advisor Services™, a division of Charles Schwab & Co., Inc. (“Schwab”). IIP is used by Advisors to provide their clients with an automated investment management service. Schwab, a registered broker-dealer and member SIPC, provides custody, trading and support services. Brokerage products, including the Schwab One® brokerage account, are offered by Schwab. SPT and Schwab are separate companies affiliated as subsidiaries of The Charles Schwab Corporation, but their products and services are independent from each other.

Schwab Advisor Services serves independent investment advisors and includes the custody, trading, and support services of Charles Schwab & Co., Inc., Member SIPC.

This material is for registered investment advisor use only. This material may not be forwarded or made available, in part or in whole, to any party that is not a financial professional

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