We learn a lot from our clients, and we’d like to, from time to time, spotlight use cases that would be interesting to others.
INTRUST Bank is a regional bank headquartered in Wichita, KS, that oversees approximately $5 billion in assets for families, institutions and retirement plans. You may not be familiar with INTRUST but we’re pretty sure they’re a national leader in tax-efficient investing. Last year, INTRUST’s best-in-class tax management saved its clients an average of 4.31% in portfolio value.
We’ve worked with INTRUST for over a decade, and we’ve long been impressed by their commitment to innovation and their focus on lowering costs and taxes for their clients. Bill Martin, INTRUST's Chief Investment Officer, commented that "Through tax-smart investing, we have differentiated our practice from other wealth managers in the region, resulting in high client retention, increased wallet share, more referrals, and solid growth in our business. This has all been accomplished through a highly scalable process which works in tandem with our core custodial and trading systems."
Here are the full stats on INTRUST’s tax management in 2016:
- Average taxes saved: 4.31% of portfolio value. This was the highest among all Smartleaf clients and is consistent with their longstanding focus on tax efficiency.
- Average tracking error (return dispersion): 1.59%. This is above the average for Smartleaf clients, but still substantially better than industry average.
You can see where INTRUST stands relative to the average for Smartleaf clients in the graph below:
Tax management involves a trade off between taxes and dispersion, and there’s no single correct choice of balance between the two. Some firms prefer greater tax efficiency; others prefer lower dispersion. To compare these firms, you can look at their “Tax Management Information Ratio”, calculated by dividing their average taxes saved by their average tracking error. It’s a measure of a firm’s skill in minimizing dispersion for any given level of tax efficiency. The average Smartleaf Tax Management Information ratio is 2.2, which is high. INTRUST's Tax Management Information Ratio was an exceptional 2.71, which is the second highest among all our clients.
If you’re interested in learning more about INTRUST's industry-leading practices, you can reach Bill at Bill.Martin@INTRUSTWealth.com. If you’re interested in improving your own tax management and demonstrating value to your clients, give us a call at 781-315-7549.
For more on this topic, check out An Index to Smartleaf's Top Blog Posts.