Recent research from Cerulli Associates underscores a growing shift in tax management: delivering true customization at scale requires more than a single strategy—it requires a broader tax toolkit with a coordinated suite of tax-management solutions.
As advisor relationships deepen and client wealth becomes more complex, tax management increasingly must span the full portfolio lifecycle—from wealth accumulation and transition planning to income generation and, ultimately, wealth transfer.
One of the most tax-sensitive phases in this lifecycle is the transition from accumulation to distribution. Navigating this shift requires thoughtful coordination across portfolio positioning, tax implications, income needs and long-term legacy goals. Delivering that level of sophistication is helped by partnering with an investment manager that offers not only direct indexing, but also the broader toolkit and investment products needed to manage portfolios holistically.
Beyond standalone tax solutions
Direct indexing remains one of the most widely adopted customized investment solutions, largely because it enables investors to personalize portfolios while improving tax efficiency through features such as tax-loss harvesting.
However, Cerulli’s research points to the growing role of complementary strategies designed to address more nuanced client needs throughout the portfolio lifecycle.
These include:
- Custom bond SMAs designed to support diversification and income generation
- Tax-managed equity long-short strategies designed to seek pretax alpha with the potential for enhanced loss-harvesting opportunities
- Options-based overlays that can help manage concentrated positions or modify portfolio risk
- Special-purpose vehicles that may support tax deferral, charitable giving or estate planning
The takeaway is clear: No single approach can solve every tax challenge. Advisors working with clients who have embedded gains, upcoming liquidity events, charitable objectives or retirement income needs require access to a broader and more flexible set of solutions—ideally delivered through an integrated platform rather than a collection of disconnected tools.
Consider the benefits of active tax management
The power of integration during portfolio transitions
The shift from accumulation to distribution often requires the highest degree of coordination across a client’s portfolio. It sits at the intersection of portfolio reallocation, tax management, income generation and estate planning—making it one of the most complex phases of the lifecycle. This is where integrated tools become especially valuable.
For example, Eaton Vance’s Tax Optimized Portfolio Solutions (TOPS) helps advisors evaluate how to transition a client’s current portfolio to one better aligned with their future goals, while managing taxes and unintended risk along the way. Rather than viewing strategies in isolation, TOPS brings multiple tax-managed solutions together in a single, coordinated analysis.
In practice, TOPS:
- Evaluates eligibility and fit across multiple tax-aware strategies
- Prioritizes tax-efficient transition pathways aligned with a client’s tax budget
- Incorporates client preferences, such as concentration limits, restricted holdings and charitable goals
- Produces clear, advisor- and client-ready materials to support implementation and ongoing discussions
Importantly, tools such as TOPS are not designed to replace individual strategies. Their value lies in coordination—helping advisors implement the right solutions, at the right time, within a unified framework.
The bottom line
Cerulli’s Customized at Scale research reinforces a critical point: The future of wealth management is increasingly tax-aware, personalized and holistic. While direct indexing remains a powerful foundation, it represents only one component of a broader tax-management ecosystem.
We believe advisors looking to deliver customized outcomes throughout a client’s portfolio lifecycle would be wise to partner with investment managers that can provide both a deep lineup of tax-managed investment options and the tools to deploy them effectively. Together, these capabilities can help advisors move beyond simple tax deferral and support clients as they transition portfolios from growth to income, while managing taxes and aligning assets with long-term legacy goals.
To explore all the data and insights, download the full Cerulli report here.
Source for data in this blog: Customized at Scale: A Framework for Next-Generation Advisory Platforms, October 2025. Cerulli Associates is an international research and consulting firm that provides financial institutions with guidance in strategic positioning and new business development. This study was sponsored by Parametric. Parametric is not affiliated with Cerulli Associates or any of its affiliates.
Parametric and Morgan Stanley do not provide legal, tax, or accounting advice or services. Clients should consult with their own tax or legal advisor prior to entering into any transaction or strategy described herein.
The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Parametric and its affiliates disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Parametric are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Parametric strategy. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results. All investments are subject to the risk of loss.
Investment strategies that seek to enhance after-tax performance may be unable to fully realize strategic gains or harvest losses due to various factors. Market conditions may limit the ability to generate tax losses. Tax-loss harvesting involves the risks that the new investment could perform worse than the original investment and that transaction costs could offset the tax benefit. Also, a tax-managed strategy may cause a client portfolio to hold a security in order to achieve more favorable tax treatment or to sell a security in order to create tax losses.
Prospective investors should consult with a tax or legal advisor before making any investment decision. Please refer to the Disclosure page on our website for important information about investments and risks.
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