Investors   ■  Private Clients  ■  Tax Efficiency

Cooke & Bieler’s private client specialists focus on several tactics to minimize our clients’ taxes:

  • First, we listen and understand: what is the client’s tax bracket now and (likely) in the future? What is his/her state of residency? Are there any special tax circumstances we should be aware of (e.g., loss carry forwards or significant charitable gifts?) Discussions with our clients’ tax advisors are critical.
  • Our investment process yields low turnover. The stable, high-quality companies in which we invest can generally be safely held for multiple years. This allows low turnover rates of 20-30%, so we realize capital gains only every 3-5 years.
  • Tax Lot Management.
  • Asset Location.
  • Many advisors force clients to sell most of their securities, realizing significant capital gains before they will accept new relationships. The performance drag from taxes paid during these transitions can be very meaningful. We work with clients to minimize their risk, but also to be sensitive to taxes, even before they become clients. See Concentrated Positions.
  • When we have taken all these steps, we sometimes advise clients that in our view, the 15% long-term capital gains rate is unlikely to go any lower, and that realizing a net gain of 85% is not the worst outcome.
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