Envestnet Strengthens UMA Tax Overlay Service, Delivering Average After-Tax Benefit of +1.96% for Full 2025 Tax Year

New Analysis Finds Nearly 99% of UMA Tax Overlay Accounts Benefited from Active, Holistic Tax Management in 2025

BERWYN, Pa., Sept. 16, 2026 /PRNewswire/ -- Envestnet, the leading Adaptive WealthTech company, continues to enhance year-round, holistic tax management within its platform, empowering advisors to help deliver tax-aware investment management at scale while improving after-tax outcomes for clients through its unified managed account (UMA) Tax Overlay program.

Envestnet's unified managed account (UMA) Tax Overlay program delivers active, holistic tax management across virtually any equity separately managed account (SMA) or Fund Strategist Portfolio (FSP) sleeve available within the UMA. The program combines tax-lot-level trading, capital gains budgeting and deferral, and ongoing tax-loss harvesting to manage taxes across a client's full taxable portfolio, all year.

Envestnet's UMA Tax Overlay is complemented by the Fund Strategist Tax Management (FTSM) service for model portfolios and reflects the firm's broader commitment to helping advisors manage taxes throughout the year – and not only during year-end planning cycles.

Internal analysis of accounts utilizing the UMA Tax Overlay service throughout the full 2025 tax year found that participating accounts generated an average after-tax return of +1.96% above what they would have had if they had not deployed the Tax Overlay, with approximately 99% of accounts benefiting from the program.

"Tax management is not about what you make. It's about what you keep," said Erik Preus, CFA, Group Head of Investment Management at Envestnet. "For more than two decades, we've helped advisors navigate the complexities of tax-efficient investing. Our UMA Tax Overlay service takes an active, holistic approach – managing taxes at the tax-lot level across a client's full taxable portfolio* – so advisors can deliver sophisticated, comprehensive tax management while helping preserve long-term wealth."

The UMA Tax Overlay service continues to gain momentum across the Envestnet platform:

• Envestnet now automates tax management across approximately $26 billion in assets across its UMA Tax Overlay and Fund Strategist Tax Management programs, as of March 31, 2026.
• The usage by clients of UMA Tax Overlay has achieved a three-year compound annual growth rate of approximately 29%.
• The average UMA Tax Overlay account size is approximately $2 million, with the program designed for higher-net-worth clients typically funded with individual securities, including concentrated equity positions.
• Based on 2025 account analysis, the average UMA Tax Overlay account incurred approximately $1,700ⁱ in annual service costs, while avoiding an average estimated tax liability of more than $25,000ⁱⁱ if the service were to be removed.

Unlike traditional tax-loss harvesting programs, the UMA Tax Overlay is designed to actively and holistically manage taxes across a client's full taxable portfolio. The program trades every account at the tax-lot level, defers short-term gains until they qualify for long-term treatment, and applies client-specific capital gains budgets to control the timing and type of realized gains.

In 2025, more than 99% of accounts stayed within their short-term gains budget and more than 96% stayed within their custom long-term gains budget.

Accounts with the greatest allocation to actively managed sleeves saw the largest benefit when utilizing the UMA Tax Overlay service – accounts with more than 80% allocated to equity SMA or FSP sleeves generated an average after-tax benefit of 2.34%, more than double the benefit realized by accounts with lower allocations to actively managed strategies.

"Our UMA Tax Overlay results show advisors what active, holistic tax management can deliver for clients," said Michael Pescatore, CIMA®, RMA, Principal Director of Overlay Services at Envestnet. "Nearly all of our UMA Tax Overlay accounts benefited from the program in 2025, and advisors are increasingly relying on us to combine tax-loss harvesting with risk optimization to help clients keep more of what they earn."

To schedule a demo or learn more about Envestnet's UMA Tax Overlay service, financial professionals can contact their respective Envestnet relationship managers, or visit https://www.envestnet.com/tax-overlay.

About Envestnet

Envestnet is the leading Adaptive WealthTech company that helps advisors meet the moment with its comprehensive technology, insights, and industry-leading support. This empowers advisors to make smart decisions throughout every step of a client's financial life. Backed by 25 years of experience and nearly $8.0 trillion in platform assets, Envestnet is trusted by over a third of all financial advisors across many leading banks, wealth managers, brokerages, and RIAs.

For a deeper dive into how Envestnet is shaping the future of financial advice, visit www.envestnet.com. Stay connected with us for the latest updates and insights on LinkedIn and X (Envestnet_).

Envestnet refers to the family of operating subsidiaries of the holding company, Envestnet, Inc. 

*Tax overlay services are limited to eligible taxable holdings and may not be available for certain securities, asset classes, or account types.

Neither Envestnet, Envestnet | PMC™ nor its representatives render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor. Client must carefully determine if the use of tax overlay services is appropriate for their circumstances, risk tolerance, and investment objectives. Tax management services are limited in scope and are not designed to permanently eliminate taxes in the account. In providing tax overlay services, Envestnet will allow Client's account to deviate from Client's selected investment strategy. Client's account may experience significant performance differences from the selected investment strategy due to Client's selection of tax overlay services. Envestnet makes no guarantee that the account's performance will be within any range of the selected investment strategy or the strategy´s benchmark. If Client subsequently disables tax overlay services this may result in the recognition of significant capital gains.

Actual client results will vary based on investment objectives, financial circumstances, timing of investments, market conditions, fees, account restrictions, and other factors.

Past performance is no guarantee of future results.

ⁱ The approximate annual cost is based on a 0.10% cost for the UMA Tax Overlay service. Individual account cost may vary.
ⁱⁱ Average Tax Bill (based on 37% ST Rate and 20% LT Rate) rounded to the nearest $1,000 and is based on all accounts in the respective service and based upon the estimated capital gains that would be immediately realized by removal of the tax management service and rebalancing to the target model (selling all non-model holdings and trimming all overweighted model holdings to their model weight). All accounts, regardless of start date, are included in these values.

SOURCE Envestnet