NEUBERGER BERMAN AND KEY WEALTH ANNOUNCE A PROPRIETARY CUSTOMIZED DIRECT INVESTMENT OFFERING FOR KEY PRIVATE BANK CLIENTS

Rhea-AI Summary

Neuberger Berman and Key Wealth collaborate to introduce tax optimization solutions for high net worth clients through NB CDI™ platform, enhancing Key's equity strategies.

Financial Analyst

The integration of Neuberger Berman's Custom Direct Investing (NB CDI™) into Key Wealth's Equity Strategies represents a strategic enhancement in wealth management services, particularly for high net worth and ultra-high net worth clients. The emphasis on tax optimization through Separately Managed Accounts (SMAs) is indicative of a growing trend in personalized investment solutions. The ability to customize portfolios not just for performance but also for tax implications, personal values and risk preferences is increasingly sought after by investors.

The introduction of NB CDI™ is poised to provide Key Wealth a competitive edge in the wealth management market. The potential for consistent tax alpha through tax loss harvesting could differentiate Key Wealth's offerings from traditional investment vehicles like ETFs and mutual funds. This is particularly relevant as tax loss harvesting is a strategy that can enhance after-tax returns, which is a key consideration for the targeted affluent client base. The financial implications of this partnership could manifest in increased client retention and attraction of new clients looking for tailored investment strategies that consider tax implications more closely.

Tax Specialist

The announcement highlights the critical role of tax management in investment strategies, especially for high net worth individuals. The NB CDI™ platform's focus on tax loss harvesting is a sophisticated technique that can be leveraged to neutralize capital gains taxes by realizing losses in a portfolio. This can be particularly advantageous in volatile markets where the realization of losses can be used to offset gains elsewhere, effectively lowering the investor's taxable income.

However, investors and advisors should be aware of the complexities involved in tax loss harvesting, including the IRS's wash-sale rule, which prohibits claiming a tax deduction for a security sold in a wash sale. The integration of NB CDI™ suggests that Neuberger Berman and Key Wealth are investing in technology and expertise to navigate these complexities on behalf of their clients, potentially leading to more nuanced and favorable tax outcomes. The long-term benefits of such tax management can be substantial, considering the compounding effect of tax savings on investment growth over time.

Wealth Management Advisor

The collaboration between Neuberger Berman and Key Wealth is reflective of the evolving landscape in wealth management, where personalization and tax efficiency are becoming paramount. For wealth advisors, the ability to offer direct indexing solutions like NB CDI™ can be a game-changer in terms of client satisfaction and retention. Clients are increasingly looking for investment strategies that align with their personal values, such as ESG considerations, which the NB CDI™ platform can accommodate through factor tilts. This not only caters to the ethical preferences of investors but can also open up new growth avenues for wealth management firms by appealing to a broader demographic concerned with sustainable investing.

It's important to note that while tax optimization and personalized investment solutions can offer significant benefits, they also require a higher level of ongoing management and oversight. The success of this integration will depend on the continuous alignment of the investment strategies with the changing tax laws and client needs. As such, wealth management firms will need to ensure they have the requisite expertise and systems in place to deliver on the promises of such sophisticated investment solutions.

In an evolution of direct indexing, Neuberger Berman's Customize Direct Investing solution will be integrated into Key Wealth's Equity Strategies to help customize portfolios and manage tax impact for Key clients

CLEVELAND and NEW YORK, March 18, 2024 /PRNewswire/ -- Neuberger Berman, an employee-owned, private, independent investment manager, and Key Wealth, the wealth management business of KeyCorp (NYSE:KEY), announced the introduction of Neuberger Berman's Custom Direct Investing (NB CDI™) solution to tax optimize Key Wealth equity strategies for long-term wealth growth for Key Wealth's high net worth (HNW) and ultra-high net worth (UNHW) clients.

NB CDI™ is a Separately Managed Account (SMA) platform that customizes portfolios to client specifications around tax liabilities, personal values, factor tilts and risk guidelines.

The NB CDI™ platform will provide custom implementation of Key Wealth's proprietary equity strategies including Key Core Equity, Key Sustainable Equity Advantage and Key High Dividend. The customization offered by NB CDI™ aims to enhance Key's existing strategies by seeking to provide clients consistent tax alpha with precise tax loss harvesting. This tax loss harvesting has the potential to offset capital gains within a broader portfolio in a way that ETFs, mutual funds or tax-unaware management cannot. This approach is designed to not only seek to increase after-tax investment returns but also to elevate the overall client experience.

 "We're excited to introduce Neuberger Berman's Custom Direct Investing platform as part of our proprietary equity strategies for our HNW and UHNW clients," said Jonathan Theberge, Director of Wealth Services for Key Wealth. "Providing tax optimization across the entirety of an investor's equity allocation can result in a better client outcome."

"We recognize that taxes can significantly affect portfolio performance, and this is a concern that resonates deeply with our partners and their clients," said Scott Kilgallen, Managing Director and Head of North American intermediary at Neuberger Berman. "By actively implementing tax-efficient strategies tailored to the unique needs of each investor, we empower portfolio managers with a robust tool."

About Neuberger Berman

Neuberger Berman is an employee-owned, private, independent investment manager founded in 1939 with 2,800 employees in 26 countries. The firm manages $463 billion of equities, fixed income, private equity, real estate and hedge fund portfolios for global institutions, advisors and individuals. Neuberger Berman's investment philosophy is founded on active management, fundamental research and engaged ownership. UNPRI named the firm a Leader, a designation awarded to fewer than 1% of investment firms for excellence in environmental, social and governance practices. Neuberger Berman has been named by Pensions & Investments as the #1 or #2 Best Place to Work in Money Management for each of the last ten years (firms with more than 1,000 employees). Visit www.nb.com for more information. Data as of December 31, 2023.

About Key Wealth

Key Wealth is the wealth management business of KeyCorp (NYSE:KEY) one of the nation's largest bank-based financial services companies with assets of approximately $188 billion at December 31, 2023. Key Wealth provides financial planning, investment, fiduciary, banking and credit, insurance and business solutions tailored to meet our clients' specific goals and needs.

Key Wealth which includes Key Private Bank, Key Family Wealth and Key Institutional Advisors has served our HNW, UHNW and Institutional segments for nearly 200 years.

Key Wealth, Key Private Bank, Key Family Wealth, KeyBank Institutional Advisors and Key Private Client are marketing names for KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA).

Investing involves risk, including potential loss of principal amount invested. There is no guarantee that investment objectives will be achieved. Past performance does not guarantee future results. Asset allocation and diversification do not guarantee returns or protect against losses.

Investment products and services are:

NOT FDIC INSURED ● NOT BANK GUARANTEED ● MAY LOSE VALUE ● NOT A DEPOSIT ● NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY

CFMA 12032024 -2472183

Media Contacts:

For KeyCorp: Laura Mimura 216.471.2883, laura.mimura@key.com

For NB: Alex Samuelson, 212 476 5392, Alexander.Samuelson@NB.com

All Neuberger Berman information is as of December 31, 2023, unless otherwise indicated and is subject to change without notice. Firm data, including employee and assets under management figures, reflects collective data for the various affiliated investment advisers that are subsidiaries of Neuberger Berman Group LLC. Firm history/timeline includes the history of all firm subsidiaries, including predecessor entities and acquisitions. 

This material is being issued on a limited basis through various global subsidiaries and affiliates of Neuberger Berman Group LLC. Please visit www.nb.com/disclosure-global-communications for the specific entities and jurisdictional limitations and restrictions. The "Neuberger Berman" name and logo are registered service marks of Neuberger Berman Group LLC. © 2024 Neuberger Berman Group LLC. All rights reserved.

 

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SOURCE Neuberger Berman

FAQ

What is the collaboration between Neuberger Berman and Key Wealth about?

Neuberger Berman's Custom Direct Investing solution will be integrated into Key Wealth's Equity Strategies to help customize portfolios and manage tax impact for Key clients.

What is NB CDI™?

NB CDI™ is a Separately Managed Account (SMA) platform that customizes portfolios to client specifications around tax liabilities, personal values, factor tilts, and risk guidelines.

Which equity strategies of Key Wealth will be customized using NB CDI™?

Key Core Equity, Key Sustainable Equity Advantage, and Key High Dividend will be customized using NB CDI™.

What is the aim of customization offered by NB CDI™?

The customization aims to enhance Key's existing strategies by providing clients consistent tax alpha with precise tax loss harvesting to offset capital gains within a broader portfolio.

How does the collaboration benefit clients?

The collaboration seeks to increase after-tax investment returns and elevate the overall client experience by providing tax optimization across the entirety of an investor's equity allocation.