As wealth continues to grow along with soaring equity markets, and technology enables customization and choices once reserved for a select few investors, financial advisors are tasked with constantly evolving to maintain their value position.
Cerulli Associates reports that the next frontier is clear: tax management. Advisors who can deliver measurable tax savings to help investors achieve long-term goals will set themselves apart from competitors.
Taxes take center stage
According to the Cerulli report, with research showing that 69% of affluent investors want their provider to help reduce their tax bill,1 financial advisors are talking about taxes in ways they never did before.
Equity appreciation over the last decade has increased the concentration of high net worth (HNW) households (with more than $5 million in investable assets) to a market share of 66% in 2023. For this group of investors, taxes are their number-one ongoing expense. To meet the growing demand, advisors increasingly position tax planning as a core service to align with what clients value most.
Advisor behavior evolves
With the greater focus on taxes, many advisors have incorporated tax management into the heart of the investment decision process: 47% of advisors now provide tax planning services, rising to 53% of advisors who focus on HNW clients. Among the HNW-focused practice leaders in Cerulli’s research, tax minimization and wealth preservation were identified as the most important investment objectives by 73% of advisors.
Advisors no longer see beating a pre-tax benchmark as the sole measure of success. Instead, much of their value is added through focusing on tax management that seeks to maximize after-tax performance, helping their clients grow and maintain as much wealth as possible.
Tax management throughout the lifecycle
Tax management may once have been an exercise only at year end, looking to reduce gains as the annual tax burden crystallized in December. But now tax management is expected to be embedded throughout the client lifecycle: from onboarding to active management to distribution. Cerulli highlighted the importance of these three key phases:
- Onboarding transformation
Align legacy holdings with new strategies while minimizing tax drag by targeting products for tax efficient transitions, allocating across the household accounts with the most tax advantageous solutions and spreading the tax impact over multiple periods.
- Active tax management
Invest in solutions that offer systematic, rules-based tax loss harvesting, employ household-level optimization and provide reporting on the effectiveness of tax management.
- Distribution optimization
Maximize the lifetime benefit with tax-smart withdrawals, align Social Security with long-term goals and incorporate estate planning to ensure that wealth transfer strategies preserve as much capital as possible.
Why this matters for advisors
As Cerulli reports, many investors are proactively asking about taxes in new ways. More and more they expect their advisors to make taxes a part of the discussion from the beginning—starting with pre-inception analysis, then ongoing management and finally estate value maximization. Technology has made customization and tax management more accessible than ever. Advisors who fail to address these needs risk falling behind the fast-moving market.
The bottom line
Tax management is no longer a niche offering, but rather the cornerstone of an advisor’s long-term value proposition. To be competitive in the next frontier, advisors must adopt year-round tax strategies to retain and grow client relationships.
To explore all the data and insights, download the full Cerulli report here.
1 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.
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