Make tax-smart investing part of your plan

We believe we can help you keep more of your money invested and working for you. To help achieve that goal, we've developed a comprehensive, tax-smart approach,1 which we apply throughout the year, that goes beyond purchasing tax-efficient investments or conducting year-end tax-loss harvesting.

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Looking to keep more of what you earn?

The average client with a Portfolio Advisory Services account using tax-smart strategies could have saved $4,137 per year in taxes.2 But that's just in one year and using one of our tax smart techniques. Over time that savings can stay invested, giving it a chance to grow over the long term.

Comprehensive strategies

We've refined our tax-smart approach through decades of experience and innovation and look to strategically apply it to help you reach your goals.

Personalized approach

When making trades in your account, we consider your personal tax rate, as well as the purchase date and individual gains and losses on every position in that account.

Continually seeking opportunities

Unlike some investment firms, which simply wait until year end to harvest losses, we seek to apply our approach throughout the year.

Our tax-smart approach can help with year-round tax planning

We employ a number of tax-smart investing strategies on your behalf throughout the year in your Portfolio Advisory Services accounts, some as early as when we start building your portfolio.

Transition management

We search for ways to integrate your existing eligible holdings3 into your managed account as opposed to selling all of your existing investments in order to "start from scratch." This can help reduce the potential tax consequences of creating your personalized investment strategy.4

Tax-loss harvesting 2

If we sell positions in your account at a loss, we may use those losses to offset gains elsewhere in your portfolio, which can help reduce your tax liability in either the current year or in future years.

Manage capital gains

When possible, we may realize long-term capital gains instead of short-term gains, which may reduce your tax obligations.

Manage exposure to distributions

We'll seek investments that pay out fewer or no distributions to help reduce your tax obligations.

Invest in municipal bond funds or ETFs

When it makes sense based on your tax rate, we may seek to provide exposure to municipal bonds, whose interest may be exempt from federal taxes and, depending on your state of residence, state and local taxes.

Asset location

For qualifying goals, we may strategically position assets across your Portfolio Advisory Services accounts based on their tax registration to help enhance your after-tax returns. Asset location may also increase the impact of some of our other strategies.

Tax-smart rebalancing

As markets move and your mix of investments shifts, we'll consider the potential tax impact of trades we make on your behalf when maintaining the appropriate level of risk.

Tax-smart withdrawals

When you need to withdraw money, we'll seek to reduce the tax impact of those withdrawals when selecting which holdings to sell.

Improving after-tax returns may have a significant long-term impact

The chart below is designed to help demonstrate how tax-smart investing can help add value, which can compound over time. In this example, we look at a group of accounts, each one with asset allocations of 42% domestic stocks, 18% foreign stocks, 35% bonds, and 5% short-term investments. Each set of bars represents the after-tax value of a $1 million initial investment at the end of that period, with and without tax-smart investing applied. The difference between the two bars in each case represents the additional value created by these techniques, based on our methodology and assumptions.

Chart: This graphic seeks to illustrate the benefits of tax-smart investment management over time. In this hypothetical example, 5 different $1 million portfolios are fully invested on January 1 2002, 2007, 2012, 2017 and 2021. Each line represents the additional returns generated by tax-smart investing between the beginning date for each portfolio and December 31, 2021. For the portfolio created in 2002 an additional $545,133 in after-tax returns were generated. For the portfolio created in 2007 an additional $308,892 in after-tax returns were generated. For the portfolio created in 2012 an additional $59,583 in after-tax returns were generated. For the portfolio created in 2017 an additional $56,836 in after-tax returns were generated. For the portfolio created in 2021 an additional $4,019 in after-tax returns were generated.

For informational purposes only. Returns for individual clients will vary. Each set of bars represents the after-tax value of a $1 million initial investment at the end of that period, with and without tax-smart investing applied. The graph is based on the performance of a composite of accounts managed using the following strategy characteristics: Growth with Income asset allocation using tax-smart investing techniques (but not household tax-smart strategies), the total return investment approach, blended investment universe, and investing in municipal securities, and includes accounts that do and do not use separately managed account sleeves (“SMAs”). Please be aware that the value of tax-smart investing techniques would be different, perhaps significantly, for an account that is not managed using the same configuration of strategy characteristics as the composites shown above. The Growth with Income asset allocation, total return investment approach, and blended investment universe were chosen because they are the most commonly used asset allocation, investment approach, and universe in the program. Please speak to your Fidelity representative for information about the performance of other strategy characteristics available through the program, and please review footnote 5 below for important information about the methodology and assumptions used (and their related risks and limitations).

Important information about performance returns. Performance cited represents past performance. Past performance before and after taxes does not guarantee future results, and current performance may be lower or higher than the data quoted. Investment returns and principal will fluctuate with market and economic conditions, and you may have a gain or loss when you sell your assets. Your return may differ significantly from the returns reported. The underlying investments held in a client’s account may differ from those of the accounts included in the composite. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Before investing in any investment product, you should consider its investment objectives, risks, and expenses. This material has been prepared for informational purposes only and is not to be considered investment advice or a solicitation for investment. Information is as of the period indicated and is subject to change. Please read the applicable advisory program’s Form ADV Program Fundamentals, available from a Fidelity advisor or at

Wealth Management through Fidelity® Wealth Services

You'll have the opportunity to work with a dedicated Fidelity advisor who can help you understand the benefits of tax-smart investing strategies, help you create a flexible plan for your full financial picture, and provide access to personalized investment management.

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