FAQs

General
Data
Trade Generation


General

  • What is LifeYield?
    • LifeYield develops and provides software for advisors and their firms to deliver to clients true Coordinated Account and Income Management, which helps minimize taxes during the accumulation, transition and withdrawal phases. LifeYield's management team has deep experience building easy-to-use, innovative financial software solutions.
    • LifeYield suggests the most tax efficient trades across multiple taxable and tax-advantaged accounts every time a client needs to invest or withdraw cash, or rebalance a portfolio.
    • LifeYield allows advisors to show clients and prospective clients the increased returns and retirement income that may be achieved by consolidating assets with an advisor providing Coordinated Account and Income Management.
  • What is Coordinated Account and Income Management?
    • Coordinated Account and Income Management is the process by which multiple accounts owned by a household are managed together, in a coordinated way during the accumulation, transition, and retirement periods. These accounts can include taxable, tax-deferred, and tax free accounts held by more than one person, such as a husband and wife. By managing them together, taxes can be minimized, which can provide improved after-tax returns and significantly more income in retirement.LifeYield ROI suggests the most tax efficient trades across multiple taxable and tax-advantaged accounts every time a client needs to invest or withdraw cash.
  • Do I need to use specific financial products with LifeYield ROI or LifeYield Illustrator?
    • No LifeYield is product neutral. You and your client decide on your product and asset selections and allocations. LifeYield helps minimize the taxes you pay when growing, transitioning and withdrawing those assets.
  • Does LifeYield offer any benefits for households with only a tax-advantaged account?
    • LifeYield's trade generation software does not offer the client benefits for single tax-advantaged account management. However, where an advisor manages just a tax-advantaged account for a client, LifeYield lets advisors show that client why consolidating additional accounts with that advisor can increase returns and retirement income.
  • What is the definition of "Pro rata" or "Tax neutral?
    • "Pro rata" or "tax neutral" means that all accounts owned by a household, taxable and tax-advantaged, follow the same asset allocation without regard to placing the most appropriate assets in the most appropriate type of account.
  • What investment assumptions does LifeYield use? Can they be changed?
    • LifeYield considers historical returns of different asset categories and inflation projections when making its trade suggestions. All such assumptions are fully customizable for a firm's preferences.
  • What categorization system is used?
    • categorization system used by LifeYield is provided by Morningstar®. However, an advisory firm is free to provide LifeYield a categorization system of its own choosing.
  • Does LifeYield show pre- or after-tax results?
    • LifeYield presents after-tax results.
  • What advantage does LifeYield offer for pre-retirement accounts?
    • When used during the accumulation phase as well as during a household's retirement period, LifeYield can provide significant additional tax savings and resulting retirement income. Based on comparisons conducted by Ernst & Young LLP, when used during retirement only, LifeYield can increase retirement income by up to 20%. When used during an additional 15-year pre-retirement phase, the results of Ernst & Young LLP's comparisons found that income during retirement could be increased by up to 33%.
  • What is the target range for households that benefit from LifeYield?
    • LifeYield provides material benefits to households with $200,000 in assets all the way up to ultra high net worth families.
      • For households that start 15 years before retirement with $200,000, the Ernst & Young LLP simulations indicated the LifeYield methodology could increase retirement income by up to 10%. As beginning household balances increase, so does the increase in benefits from Coordinated Account and Income Management; with households that start with $1 million 15 years before retirement, LifeYield can help increase returns and retirement income by up to 33%.
      • For ultra high net worth families where household assets can provide more income than is needed, comparisons by Ernst & Young LLP considered a constrained retirement income model, i.e. one that was limited to $1 million per year, and found that bequests for this household can be increased by up to 139%.
    • Because LifeYield saves significant time for an advisor in generating or investing cash for a client, LifeYield makes even smaller households profitable for advisors to serve
  • How do you handle managed accounts?
    • o LifeYield looks across all accounts within a household to identify the best loss harvesting opportunities, potential wash sales, and potential improvements to asset location while maintaining the household-level asset allocation. With a managed account as part of a household, LifeYield is able to produce cash withdrawal and/or tax harvesting requests for communication to the SMA/UMA manager, resulting in the optimal tax outcome for the household; something the SMA manager would not be able to do in isolation. In addition, LifeYield can help advisors identify household-wide wash sales situations which individual SMA managers would not be able to see. Lastly, LifeYield's analysis of asset location may drive the advisor to reallocate funds between managed accounts and other accounts in the household, helping minimize taxes going forwards.
  • How is loss carry forward managed?
    • LifeYield supports loss carry-forwards by allowing the advisor to adjust the overall cost basis of taxable accounts. This allows the advisor and client to estimate the impact of a loss carry-forward over the entire retirement timeframe.
    • LifeYield always defers the realization of gains as long as possible even when a loss carry-forward exists, and so currently does not require loss carry-forward information as an input.

Data

  • What data sources do you connect to now?
    • Currently, LifeYield is integrated with Pershing's and Fidelity's National Financial custodian services, as well as Albridge, Inc.'s account aggregation services. LifeYield can be integrated with any data source.
  • Can the illustrator integrate into planning tools?
    • Yes, LifeYield integrates with any planning tool.
  • How are Required Minimum Distributions (RMDs) handled?
    • If the advisors custodian can provide them, LifeYield will suggest RMDs when making trade suggestions. Or, if RMDs cannot be provided as part of the data feed, LifeYield's software allows an advisor to manually request an RMD amount (and LifeYield will generate trades from the tax-deferred account) whenever cash is being withdrawn.
  • How is data loaded into LifeYield? When is data updated?
    • LifeYield is integrated with the custodian services of Pershing and Fidelity's National Financial, as well as the account aggregation services provided by Albridge, Inc. Data from these services is loaded automatically into LifeYield. Typically, LifeYield loads data nightly, but more frequent data loads can be accommodated.LifeYield ROI is integrated with the custodian services of Pershing and Fidelity's National Financial, as well as the account aggregation services provided by Albridge, Inc. Data from these services is loaded automatically into LifeYield ROI. Typically, LifeYield loads data nightly, but more frequent data loads can be accommodated.

Trade Generation

  • Can specific tax lots be restricted such that they are displayed in LifeYield but excluded from any trade suggestions LifeYield makes?
    • Yes. Any tax lot, security, or account can be restricted.
  • Will LifeYield make recommendations on location of assets?
    • Yes, LifeYield helps you make sure that the most appropriate assets are located in the most appropriate type of account, e.g. a tax free municipal bond will be located in a taxable account.
  • Will LifeYield make recommendations on types of products to purchase, or percentage to be held in a household, e.g. annuities, what kinds, what percentage of household assets?
    • No. As an advisor, you do that best. After products and allocations are agreed upon between you and your client, LifeYield makes sure that the on-going management of those products and allocations is tax optimized in order to maximize returns and retirement income.
  • Does LifeYield consider taxes when considering buying and selling of assets for relocation?
    • Yes, when making buy and sell suggestions, LifeYield weighs the pros and cons of longer term tax benefits relocating the assets versus the short term tax consequences of doing so.
  • What are trade routing options?
    • LifeYield delivers suggested trade lists in Excel, CSV, or PDF form. Or, LifeYield can be integrated with any order management system.
  • How are orders handled for accounts where advisor lacks trade authorization?
    • If an account is non-discretionary, the advisor may discuss the suggested trade list generated by LifeYield with the client.
  • How are orders handled with multiple trade destinations, i.e. multiple custodians, held away accounts, mutual funds?
    • If LifeYield has been integrated with a firm's order management system, routing destinations would be chosen in the OMS's trade blotter. If LifeYield has not been integrated with a firm''s OMS, then LifeYield provides a trade list in Excel, CSV, or PDF form and it is up to the advisor to send the orders to the correct executing broker.
  • How are wash sales handled?
    • LifeYield does not suggest trades that will violate the Wash Sale Rule. LifeYield ROI will keep track of securities that are sold where the advisor indicates the express intent to re-purchase after 30 days.
  • Do taxes always drive the optimizer?
    • Tax considerations are the primary driving force behind LifeYield's trade generation process. However, maintaining, or moving toward, a desired asset allocation is also considered. LifeYield is configurable by an advisor to put more or less emphasis on considering taxes or asset allocations.
  • If Required Minimum Distributions (RMDs) are not required, will optimizer always take from taxable accounts only?
    • Not necessarily. For example, when a person is nearing the end of retirement and has large, unrealized capital gains, it may be preferable instead to sell assets in a tax-advantaged account so that the estate, eventually, will enjoy a step-up in cost basis of those taxable assets instead of having to realize a large capital gains tax.
  • Are reasons for order suggestions captured and stored? If so, where?
    • Yes, all trade suggestions and the reasons for them are displayed when a trade list is generated. Also, they are archived and stored by LifeYield so that later they can easily be downloaded by an advisor or firm.
  • If trade is edited, can reason for change be captured?
    • Yes, if a suggested trade is edited, LifeYield makes a record of this.
  • If a trade is rejected, will LifeYield ROI recalculate next best sell to make?
    • Yes, if a trade is rejected and a new trade suggestion is requested by the user, LifeYield will not suggest again the rejected trade and will instead suggest the next best trade option.
  • If account, or a particular security or tax lot, is set for "not harvestable" are the holdings still considered when calculating allocation?
    • Yes, even if an account, security, or tax lot, is restricted, LifeYield will consider it when calculating current and projected allocations.