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Custom Indexing · Year-Round Tax-Loss Harvesting

Is Tax-Loss Harvesting Still a December Problem at Your Firm?

A firm-wide look at what happens when tax-loss harvesting depends on each advisor catching it themselves, and what changes when it doesn't.

See What This Could Do Across Your Firm

Orion

$368M+

harvested in losses for Custom Indexing clients, 2025 alone¹

83% vs. 31%

of S&P 500 stocks dipped 5%+ sometime in 2025, but only 31% were still down that much by year-end²

+30 bps

more annualized tax alpha from daily monitoring vs. monthly³

Orion

When Tax-Loss Harvesting Depends on Memory

For most firms, tax-loss harvesting isn't a process, it's a habit that lives in individual advisors' heads. Some catch it early. Some catch it in the year-end scramble. Some don't catch it at all until a client asks why they didn't.

That inconsistency isn't a reflection of any one advisor's skill. It's what happens when a firm-wide opportunity is left to firm-wide guesswork, on a deadline, once a year.

The math makes the cost concrete. In 2025, nearly 83% of S&P 500 stocks fell 5% or more at some point during the year, but only about 31% were still down that much by year-end.² A firm that only looks in December is checking after most of the market's dips have already recovered, structurally, not because anyone missed something.

Built Into How the Accounts Operate

With Custom Indexing running across your advisor team, tax-loss harvesting isn't something anyone has to remember to go looking for. It's built into how the accounts operate, continuously, so opportunity gets captured as it happens rather than hunted for under a deadline.

Independent research from J.P. Morgan Asset Management found a daily monitoring approach delivered roughly 30 basis points more in annualized tax alpha than a monthly one.²

In 2025 alone, firms running Custom Indexing harvested more than $368 million in losses for their clients platform-wide.¹ That's not one exceptional year, it's what a continuous, always-on process produces when it isn't waiting for December.

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5 Planning Triggers

Applied across your advisor team's client list, not any single client's file. If two or more of these describe a meaningful slice of your firm, that's the signal worth acting on.

1
A real share of your clients sit in the top federal tax bracket. That's where a missed harvesting window costs the most, in dollars, not just in principle.
2
Several clients carry concentrated positions, whether a legacy holding, an inheritance, or years of employer stock. That's where continuous harvesting has the most room to work.
3
Clients have sales, vesting events, or distributions already on the calendar for 2027 or 2028. The earlier losses start banking against them, the less pressure there is the year they land.
4
Clients have mentioned wanting to give appreciated stock to causes they care about. Gifting works best alongside a portfolio that's already managing the position, not instead of one.
5
Your advisors still harvest losses manually, account by account, mostly in the fourth quarter. That's work that should run firm-wide, not advisor by advisor.

Two or more sound familiar?

You don't need a client to raise this first. The firms that get the most value here are the ones that get ahead of it, not the ones reacting to it.

 

 

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Ready to See What This Could Do Across Your Firm?

See how year-round, automated harvesting runs across every account at your firm, without adding work to your advisors' calendars.

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Custom Indexing offered through Orion Portfolio Solutions, LLC a registered investment advisor.

Custom Indexing is an investment strategy wherein a portfolio is managed to mimic an index or other portfolio, while taking into account the tax position, holdings, and individual investing preferences of a client. The performance of a portfolio using custom indexing may vary significantly from the target index (referred to as tracking error or tracking difference), and this variance may increase with greater customization within a portfolio.

Tax-loss Harvesting is a process by which securities trading at unrealized losses are sold to realize a taxable loss. Proceeds from the sales are then used to reinvest in alternate securities to maintain market exposure. Tax-loss Harvesting can be used as a strategy to offset realized gains from other investments and/or carried forward to later calendar years to offset future taxable gains.

Information contained herein is not intended to constitute accounting, legal, tax, security, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Orion Portfolio Solutions does not render tax, accounting, or legal advice.

¹ Orion, internal platform data, 2025. $368M figure represents aggregate losses harvested across Custom Indexing accounts for the period January 1–December 31, 2025. Individual results will vary by account and are not indicative of future performance. 

² J.P. Morgan Asset Management, "Continuous Tax-Loss Harvesting Yields More Potential for Tax Benefits." 2025 figures: approximately 31% of S&P 500 stocks finished the year down 5% or more, while approximately 83% experienced a 5%+ drawdown at some point during the year.

³ J.P. Morgan Asset Management, same source. Daily tax-loss-harvesting monitoring produced approximately 30 basis points more annualized tax alpha than monthly monitoring, based on analysis across 16 time horizons, 2018–2021.

Wealth management services provided by Orion Portfolio Solutions, LLC (“OPS”), a registered investment advisor. Orion OCIO services provided by TownSquare Capital, LLC (“TSC”), a registered investment advisor. OPS and TSC are affiliates and wholly owned subsidiaries of Orion Advisor Solutions, Inc.

For financial professional use only. Not intended for public distribution.

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