Franklin Templeton Launches Suite of Tax-Managed Active and Passive SMAs at UBS, Powered by Canvas Custom Indexing Solution
Franklin Templeton has launched a suite of tax-managed separately managed account (SMA) strategies on UBS Wealth Management’s platforms, leveraging Canvas Custom Indexing to improve after-tax returns. This includes new offerings from ClearBridge Investments and Franklin Managed Options Strategies (Franklin MOST) team. The active and passive SMA strategies provide personalized portfolio solutions with digital account management. Franklin Templeton aims to enhance its presence in the SMA market, boasting over $137 billion in SMA assets as of March 31, 2024, and is committed to delivering innovative solutions for advisors catering to high-net-worth clients.
- Franklin Templeton launched tax-managed SMAs on UBS Wealth Management platforms.
- New offerings from both ClearBridge Investments and Franklin MOST team expand portfolio customization capabilities.
- Over $137 billion in SMA assets under management as of March 31, 2024.
- Franklin Templeton does not provide tax or legal advice, which may affect some clients' tax planning needs.
Insights
The launch of a new suite of tax-managed separately managed accounts (SMAs) by Franklin Templeton at UBS is significant for retail investors. This collaboration allows advisors to leverage Franklin Templeton's Canvas Custom Indexing solution, which aims to optimize after-tax returns. Tax efficiency can greatly influence net returns, particularly for high-net-worth individuals who are more impacted by capital gains taxes.
SMAs provide personalization in investment strategies, but with tax management included, they become even more attractive. The integration of ClearBridge’s fundamental investing with Canvas’ digital capabilities results in a robust offering that can cater to diverse investment objectives, blending active and passive strategies.
Additionally, the introduction of the Franklin Managed Options Strategies, such as Managed Call Selling and Risk Managed Equity, offers more tools for managing risk and enhancing returns. These options are particularly valuable in volatile markets where downside protection and incremental income generation are sought after.
Short-term, this could attract positive investor sentiment, leading to increased inflows into Franklin Templeton’s products. Long-term, the emphasis on tax efficiency and customization positions Franklin Templeton well in the competitive SMA market.
However, it's important to consider the costs associated with these managed accounts and whether the tax benefits outweigh management fees and potential tax advice costs.
The expansion of Franklin Templeton's offerings at UBS highlights the growing trend towards customized investment solutions and the importance of technology in wealth management. The use of Canvas Custom Indexing allows for a high degree of portfolio personalization, which is increasingly demanded by high-net-worth clients who seek tailored investment strategies.
This move also aligns with the broader industry shift towards digitization and automation in portfolio management. The seamless integration of account implementation and management through digital platforms can enhance operational efficiency and scalability for financial advisors.
From a competitive standpoint, Franklin Templeton’s strategic partnership with UBS could set a precedent, encouraging other asset managers to explore similar collaborations. This may lead to a more dynamic and competitive landscape in the SMA market. However, success will depend on the ability to deliver consistent after-tax returns and maintain robust client service.
For retail investors, the emphasis on tax management and customization could be beneficial, but they should remain cognizant of the potential complexities and ensure they fully understand the tax implications and costs involved.
Additionally, Franklin Managed Options Strategies Team Introduces Options Overlay Capabilities at UBS
“Active strategies are built to generate excess return, but if the capital gains taxes they generate are not managed carefully, their after-tax returns can be significantly impacted,” said Roger Paradiso, Head of Advisor Portfolio and Technology Solutions for Franklin Templeton. “Marrying the fundamentals of Direct and Custom Indexing with active management and channeling distribution into the wirehouse and broker-dealer segment of the market is a promising development.”
The strategies combine Canvas’ technology capabilities with Franklin Templeton’s global equity specialist manager ClearBridge Investments’ legacy in fundamental investing, enabling advisors to seamlessly offer customized portfolios with fully digital account implementation and management.
The strategy lineup includes:
- ClearBridge Large Cap Growth – Canvas Tax Managed
- ClearBridge All Cap Growth – Canvas Tax Managed
- ClearBridge Dividend Strategy – Canvas Tax Managed
- Franklin Templeton S&P 500 – Canvas Tax Managed
In addition to the Canvas tax-managed strategies, two additional strategies from the Franklin Managed Options Strategies (Franklin MOST) team have also launched at UBS:
- Franklin MOST Managed Call Selling
- Franklin MOST Risk Managed Equity
The addition of Franklin MOST alongside Canvas provides another valuable capability for advisors to more effectively customize client portfolios at scale.
Franklin Templeton is a leading provider in the fast-growing SMA industry, with over
All investments involve risks, including the loss of principal.
IMPORTANT TAX INFORMATION:
Franklin Templeton, its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the
©2024. Franklin Templeton. ClearBridge Investments, LLC and FT MOST are Franklin Templeton affiliated companies. All rights reserved.
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Franklin Templeton Corporate Communications:
Stacey Coleman, (650) 525-7458, stacey.coleman@franklintempleton.com
Rebecca Radosevich, (212) 632-3207, rebecca.radosevich@franklintempleton.com
Source: Franklin Templeton
FAQ
What new strategies has Franklin Templeton launched on UBS Wealth Management platforms?
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What is the purpose of Canvas Custom Indexing in the new SMA strategies launched by Franklin Templeton?
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What is Franklin Templeton's focus for its Custom Wealth Solutions group?
