BNY Mellon Launches Customized Tax Solutions and Expands Precision Direct Indexing

Rhea-AI Summary

BNY Mellon announced the launch of customized tax solutions and expanded its Precision Direct Indexing suite. Financial advisors, broker-dealers, and RIAs can now access these services to better align with their clients' investment goals. Managed by Mellon's expert team, the new offerings include tax transition management and tax overlay management. These services allow portfolio migration considering various factors like time horizon and tax budget. Additionally, five new direct indexing strategies have been added: US Core 500, US Total Market, US Large Cap Growth, US Large Cap Value, and International Developed Core. As of March 31, 2024, BNY Mellon oversees $48.8 trillion in assets under custody and $2.0 trillion in assets under management.

Stephanie Hill, Head of Index at Mellon, emphasized the firm's dedication to delivering institutional-quality index management to retail investors. BNY Mellon serves a wide range of clients, including over 90% of Fortune 100 companies and top 100 banks globally. Mellon manages $486.1 billion in assets and offers solutions tailored to sophisticated investors. For more information, visit BNY Mellon's website.

Positive

• Launch of customized tax solutions enhances service offerings.
• Expansion of Precision Direct Indexing suite provides more investment options.
• New tax transition and overlay management services improve portfolio management.
• Addition of five new direct indexing strategies increases market exposure options.
• BNY Mellon manages $48.8 trillion in assets and $2.0 trillion in assets under management.
• Mellon has over 40 years of index management expertise.
• BNY Mellon serves over 90% of Fortune 100 companies and top 100 banks globally.
• Introduction of services aims to help financial advisors scale their businesses.

Negative

• No specific data on the cost implications of the new services.
• Potential complexity in managing multiple new strategies and tax solutions.
• The announcement lacks detailed performance metrics for the new offerings.
• Possible risk of market saturation with expanded service offerings.

Insights

Market Research Analyst

BNY Mellon's introduction of customized tax solutions and the expansion of its direct indexing strategies reflect a growing trend in the financial sector toward personalized investment management. This move allows financial advisors and clients to manage portfolios more efficiently, taking into account individual tax situations and investment goals. The emphasis on tax efficiency, particularly through tax transition management and tax overlay management, can significantly enhance after-tax returns for investors. Thus, retail investors could see better performance in their portfolios, especially those with complex tax scenarios.

The addition of five more strategies within the direct indexing suite offers broader market exposure options, which can appeal to a diverse set of investment preferences. This flexibility can be advantageous for advisors looking to tailor solutions that meet specific client needs.

For retail investors, understanding the implications of this expansion is essential. Personalized strategies allow for better alignment with their long-term goals and can potentially reduce tax liabilities, enhancing overall returns. It may also provide a competitive edge for BNY Mellon in attracting and retaining clients.

Financial Analyst

From a financial perspective, BNY Mellon's expanded offerings in direct indexing and tax management solutions can be seen as a strategic move to capture a larger market share in the wealth management sector. This expansion could drive higher revenues through an increase in assets under management (AUM) and attract new clients who prioritize tax-efficient investment strategies.

Moreover, the combination of direct indexing and comprehensive tax solutions positions BNY Mellon to compete more effectively with fintech firms and traditional investment managers who have been enhancing their own tax optimization features. This could foster continued growth in their $2.0 trillion AUM, potentially translating to better earnings and stock performance for BNY Mellon's shareholders.

Additionally, the backing of Mellon's 40 years of expertise and robust asset management capabilities should instill confidence in retail investors. The prospect of generating tax alpha — the additional return provided by tax-efficient strategies — could be a significant draw, particularly for high-net-worth individuals and taxable accounts.

Tax Expert

The introduction of customized tax solutions by BNY Mellon is noteworthy for investors looking to optimize their portfolios for tax efficiency. Tax transition management enables investors to transition their portfolios with minimized tax impacts. This is important for those needing to rebalance or shift their investment strategies without facing substantial tax liabilities.

Further, tax overlay management ensures continuous tax optimization across customized asset sets. For instance, by targeting specific assets for tax loss harvesting, investors can offset gains and reduce their overall tax burden. This proactive approach to tax management can enhance net investment returns and provide substantial value to investors, especially those in higher tax brackets.

Overall, these tax solutions support a more refined approach to managing taxable accounts, enhancing the appeal of BNY Mellon's services to both new and existing clients. For retail investors, these tools can help maximize after-tax returns, aligning with the goal of tax-efficient wealth accumulation.

Financial advisors, broker-dealers and RIAs can now access customized tax solutions and an expanded range of direct indexing strategies that provide a variety of market exposures

NEW YORK, June 4, 2024 /PRNewswire/ -- The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE: BK), the global financial services company, today announced the launch of customized tax solutions and the expansion of its direct indexing suite, BNY Mellon Precision Direct Indexing^SM. This evolution will allow advisors to select a strategy that best aligns with their clients' investment goals and objectives. Managed by Mellon, a global leader in index management with over 40 years of institutional expertise, tax transition management and tax overlay management will also be offered alongside the expanded direct indexing suite.

With the addition of customized tax solutions, advisors will have the ability to migrate a portfolio from one exposure to another through tax transition management, which considers time horizon, tax budget, desired tracking error and composite assets. Additionally, ongoing tax overlay management can be applied around a customized set of assets, including models and customized portfolios.

In addition to BNY Mellon Precision Direct Indexing^SM S&P 500®, advisors will also be able to access another five strategies within the direct indexing suite, which include:

• BNY Mellon Precision Direct Indexing^SM US Core 500
• BNY Mellon Precision Direct Indexing^SM US Total Market
• BNY Mellon Precision Direct Indexing^SM US Large Cap Growth
• BNY Mellon Precision Direct Indexing^SM US Large Cap Value
• BNY Mellon Precision Direct Indexing^SM International Developed Core

"Our goal is to bring institutional-quality index management to the retail investors in a tax-efficient way. With this expansion of our services, we have strengthened our ability to support financial advisors as they strive to better serve their clients and scale their businesses," said Stephanie Hill, Head of Index at Mellon. "With over 40 years of index investment expertise and 30 years of tax management experience, we are well-positioned within the industry to help investors generate tax alpha and grow the value of their portfolios."

BNY Mellon Precision Direct Indexing is available through BNY Mellon PershingX's[1] Wove platform and BNY Mellon Investment Management. For more information, visit: https://www.pershing.com/us/en/what-we-provide/advisory-solutions/direct-indexing.html. 

BNY Mellon is a global financial services company that helps make money work for the world – managing it, moving it and keeping it safe. For 240 years we have partnered alongside our clients, putting our expertise and platforms to work to help them achieve their ambitions. Today we help over 90% of Fortune 100 companies and nearly all the top 100 banks globally access the money they need. We support governments in funding local projects and work with over 90% of the top 100 pension plans to safeguard investments for millions of individuals, and so much more. As of March 31, 2024, we oversee $48.8 trillion in assets under custody and/or administration and $2.0 trillion in assets under management.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). We are headquartered in New York City, employ over 50,000 people globally and have been named among Fortune's World's Most Admired Companies and Fast Company's Best Workplaces for Innovators. Additional information is available on www.bnymellon.com.  Follow us on LinkedIn or visit our Newsroom for the latest company news.

BNY Mellon Investment Management is one of the world's largest asset managers, managing almost $2 trillion across a range of traditional and alternative assets through seven specialist investment firms – ARX, Dreyfus, Insight, Mellon, Newton, Siguler Guff, and Walter Scott. For more information: www.bnymellonim.com.

Mellon is a global leader in index management with $486.1 billion in assets under management. Our dedication to precision and partnership goes beyond the benchmark. From 1983 to today, partnership with clients and precise execution drives our business. Mellon provides solutions to the world's most sophisticated investors designed to meet their unique challenges, proving that index investing requires an active mindset.

BNY Mellon Pershing (member FINRA, NYSE, SIPC) is a leading provider of clearing and custody, trading and settlement, advisory and investment solutions, data insights, business consulting and other services to wealth management and institutional firms looking to grow their businesses. For more information, go to: pershing.com

This press release is qualified for issuance in the U.S. only and is for informational purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon to members of the financial press and media and the information contained herein should not be construed as investment advice.

¹ Technology services may be provided by Pershing X, Inc., an affiliate of Pershing LLC, member FINRA, NYSE, SIPC. Pershing and Pershing X do not provide investment advice or offer investment advisory products or services.

Contact:
Sue Watt
Sue.Watt@bnymellon.com

View original content:https://www.prnewswire.com/news-releases/bny-mellon-launches-customized-tax-solutions-and-expands-precision-direct-indexing-302163250.html

SOURCE BNY Mellon

FAQ

What new services did BNY Mellon announce on June 4, 2024?

BNY Mellon announced the launch of customized tax solutions and the expansion of its Precision Direct Indexing suite.

What is included in BNY Mellon's new tax solutions?

The new tax solutions include tax transition management and tax overlay management.

How many new direct indexing strategies did BNY Mellon add?

BNY Mellon added five new direct indexing strategies.

What are the new direct indexing strategies introduced by BNY Mellon?

The new strategies include US Core 500, US Total Market, US Large Cap Growth, US Large Cap Value, and International Developed Core.

What is the significance of BNY Mellon's Precision Direct Indexing suite?

It allows advisors to select strategies that align with clients' investment goals and offers tax-efficient management.

What are the assets under management for BNY Mellon as of March 31, 2024?

BNY Mellon manages $48.8 trillion in assets under custody and $2.0 trillion in assets under management.

How does BNY Mellon's new offering help financial advisors?

It helps advisors better serve their clients and scale their businesses with tailored investment strategies.