Betterment has unveiled Tax-Coordinated Portfolio, a feature that automates the frequently used strategy of asset allocation to boost cumulative after-tax returns. The new functionality manages multiple accounts as a single portfolio, placing less tax-efficient investments into more favourably taxed accounts. “Tax is one of our biggest challenges and we are excited about this innovative product which will help us tackle it head on,” said Mike O’Toole, CEO of Betterment. Currently, Betterment is the only robo-adviser to offer this functionality.
Betterment has unveiled Tax-Coordinated Portfolio, a feature that automates the frequently used strategy of asset allocation to boost cumulative after-tax returns. The new functionality manages multiple accounts as a single portfolio, placing less tax-efficient investments into more favourably taxed accounts. According to research conducted by Betterment, the use of multiple tax accounts can result in savings on retirement accounts of around 0.48% annually after tax. Currently, Betterment is the only robo-adviser to offer this functionality.