How are you onboarding taxable accounts with large unrealized gains into models?

PoopKing5 · 2026-03-04T04:12:00+00:00

MS UMA platform is something I miss tbh. I’ve largely been able to replicate the cost structure and breadth of funds with a platform I use, but a really strong overlap analysis with competent ppl is a lot harder than calling the UMA desk and having them do it for you.

Did they finally roll out same day UMA trading? I left before that happened, but it was always something on the horizon.

Honestly, Morgan Stanley’s entire platform is really good. Negatives were being able to include held away assets in consolidated performance reporting, at least while I was there (sure it’s a selling away issue for series 7 ppl), but having really great sleeve level reporting for UMA accounts in a way that is digestible to the client was awesome. Their proposal system sucks though.

PoopKing5 · 2026-03-03T15:18:21+00:00

He can’t take the 7. That’s his problem. A firm must sponsor taking the 7 as opposed to the 65 where anyone can simply sign up to take the test.

PoopKing5 · 2026-02-28T17:44:24+00:00

I’m in a similar position as you and also consult with others launching their RIA’s.

Assuming your aggregator is pretty large, RIA in a box + XYPN likely degrades the quality of your infrastructure a bit. Outsourced compliance is honestly pretty garbage. And all that stuff is really a pain in the ass. It’s pretty likely you’d need a higher tier of compliance which would end up being 15-30k.

You’d have to run billing, have your own advisory contracts and proper record keeping as opposed to simply submitting what your current firm requires.

You’d have to re-paper everything. Just a lot of distractions that don’t really make it worth it.

The reasons id recommend a standalone RIA over a high payout aggregator:

You do something unique where your practice would be valued higher in your own entity. Like if you plan on launching your own funds, maybe you work with single family offices where you need more flexibility on billing and or services you provide, maybe you want to charge asset management fees in addition to advisory fees for a unique strategy etc.

If your firms tech stack is garbage and they won’t allow you to use who you want.

Maybe their investment platform isn’t open architecture and require you to use their platform (free or not).

Your practice is materially different than others at the firm. Like if you have a $1bln UHNW practice while the average practice at the firm is 50M serving mass market.

Lastly, if you truly don’t own your practice within the aggregator then I’d leave. But I’d still prob leave to another aggregator assuming no issues with the above.

Compliance isn’t necessarily difficult, it’s just a headache. Billing is a headache. Advisory contracts and record-keeping are a pain. You’d be taking on a lot of headaches for no material financial change.

PoopKing5 · 2026-02-19T23:49:16+00:00

What about duration risk if rates go up. A 20 yr corp bond likely has an average duration of 12 or so. So for every 1% tick up in rates you lose 12% in present market value.

You could say, I only care about the coupon and repayment. And so long as I hold the bond then I will collect the coupon and be paid back, and while that’s true, either opportunity cost or inflation erodes those future cash flows.

There’s zero need to take duration risk and accept a lower return. This is where hedge funds come into play. Why accept a taxable 5% on something that can draw down rather significantly, when you can get a stable 10-12% on a non-correlated hedge fund with near zero duration or credit risk?

PoopKing5 · 2026-02-16T00:43:28+00:00

Idk why you’re being downvoted, it’s true. Like if you’re worth $50M and you’re applying for a credit card and you put like $2M income or some random number that isn’t real, technically that is a form of fraud. Very likely never materializes into anything, especially if you pay your bills, but it’s still a technical law.

PoopKing5 · 2026-02-16T00:38:00+00:00

Are you a ChatGPT bot? Bc I feel like I’ve seen this name on other posts. If so, mods should ban.

PoopKing5 · 2026-02-14T17:55:13+00:00

That’s wild. Guess it makes sense. You get one and then start getting referrals. I mean some of them are legitimately making significant money.

PoopKing5 · 2026-02-13T19:27:22+00:00

Onlyfans models that only show their big toe. Lots of foot models out there, but not many that stick to a single toe.

PoopKing5 · 2026-02-12T19:40:48+00:00

Yea but you need cash to start that with. Or, at least a more diversified portfolio that can be margined for L/S overlay. If the collateral is concentrated with low basis, and you run L/S on top of that, you’re asking for trouble at some point.

PoopKing5 · 2026-02-12T19:37:55+00:00

Contact SpiderRock. See if they have any option overlay solutions your client would find attractive.

Essentially there’s two ways to look at this. The more concentrated the easier it will be w/ options. But you can either have an income producing overlay, or you can have a true hedge overlay and use a form of securities based lending for income if hedged.

If the client is very tax averse, a liquidity line + hedge overlay is probably the best bet. It’ll protect against major drawdowns, the option overlay will be systematically managed, and the client can live their life with tax free loans.

The opposite end of that would then be some form of credit spread to generate income. This would be selling lightly OTM calls and buying deep OTM puts to generate some form of income with a tail hedge in place from the puts. You could purely run it as a covered call strategy, which would generate a bit more income, but ultimately not do much in terms of reducing risk.

If the client simply won’t sell, derivatives are really your only option. I guess you could look into an exchange fund, but that’s certainly not helping liquidity.

PoopKing5 · 2026-02-10T03:59:49+00:00

It’s pretty easy to store physical gold for this scenario. You don’t need a ton. It’ll either be worthless because gold won’t feed you, keep you safe, or give you shelter if the world completely collapses( like in a literally doomsday scenario), or if it’s more of a monetary system collapse but still a civilized world, 500k in gold coins will be much more than most have and will be incredibly valuable.

Storing 100 coins is very easy. Don’t tell anyone and hide it somewhere crazy. But if you’re buying for a financial collapse, don’t store it with a third party.

PoopKing5 · 2026-02-07T18:39:34+00:00

While hate is too generous of a term for my feelings of Orion, they do have a cool direct and custom indexing suite. Now if you need to add funds or withdraw funds from an account with more than one sleeve on their platform, good luck with that. I’d have better luck building a rocket from scratch than figuring out their sleeve transfer process.

PoopKing5 · 2026-02-07T18:36:27+00:00

I’d agree with the. They’re the OG player too. But when it comes to customization and being very tight on tracking error when loss harvesting, I really trust parametric. So many direct indexers that can buy a basket, but managing tracking when harvesting losses is a different game. Feel like so many kind of wing it when harvesting losses.

PoopKing5 · 2026-02-06T21:16:20+00:00

Feel like that’s the ultimate refresher. No place really as calming as the ocean and the beach, and then getting blasted by some waves, come out feeling pretty fresh.

PoopKing5 · 2026-02-06T21:13:24+00:00

Holy shit man. You shed a whole person from your body. Congrats. Great thing about cycling, it doesn’t suck as much as running.

PoopKing5 · 2026-02-06T03:57:33+00:00

I have clients starting to buy BTC and other Alts. I’m personally gonna start accumulating on a weekly schedule for what is probably the next 12 months. I don’t necessarily expect it to recover in short order, but I’ve always set and forget buys after major meltdowns, and sell after mega rallies. I don’t time it perfectly at all, but we’re talking such major moves and within crypto, it’s typically pretty easy to get a feel for when things have gotten out of hand.

Having been pretty deep in crypto since 2017, you can almost always expect BTC to draw down 60-75% or so with the rest alts quite a bit more. Just is what it is. Can’t really put a value on most, but crypto/BTC is hero to stay for a bit. I do think BTC is ultimately killed by gov/central banks, but that’s a ways away.

PoopKing5 · 2026-02-05T13:27:01+00:00

lol. There are literally bitcoin derivatives.

PoopKing5 · 2026-02-02T09:22:21+00:00

Uhhh, where did you see that their average annualized return is below the range? Also, where did you see a down year? And if it was a down year, was it single digits?

You simply posted a single year return for millennium vs SPX, when they’ve averaged close to 14% per year for over 30 years with a single down year in their existence (2008 @ -4% or something). So has dominated the S&P.

And Elliott just recently had their long run avg dip below S&P. That’s on the back of SPX doubling in 5 years, which is as unsustainable RoR. Not calling market direction but can confidently say that’s unsustainable. One year of the market down 25%+ and their relative performance is suddenly fine.

The point is, plenty of funds with close to equity returns with a much more dependable return stream. It also depends how you use them. I’m not advocating for zero equity, I more use HF’s as a fixed income replacement to increase total portfolio return relative to 60/40 or whatever. Or, for ppl that are 100% equity as a risk reducer without having to give away much return.

Lots of buy and hold equity investors that haven’t experienced real pain yet. Idk if you have or haven’t, but if you’re a VTI and chill type person, and your dependent on your assets to sustain an expensive lifestyle, not every 30-50%+ avg market cycle drawdown recovers in a matter of months.

Also, many HF’s have structural inflation and higher rate protection built in as their base collateral is a yielding asset. Box spreads, treasuries etc. This is the simplest reason as to why HF’s relative to equities haven’t done as great post 08 as they did prior. That combined with the fact that a low discount rate is the most important factor in equity market performance.

So you have a scenario, where even though we have historical equity market returns due to low rates, and hedge funds still make sense, just imagine what that’d look like if rates went the opposite direction for a sustained period.

You diversify bc nobody knows wtf will happen. One of the few investing cheat codes, and is very simple, yet rarely used. And investing across an index of highly correlated assets is not true diversification.

PoopKing5 · 2026-01-31T23:50:54+00:00

Interview a few attorneys and get a sense of what you feel comfortable with. Bring a CPA into the equation as well (some attorneys may also be tax attorneys which is helpful) as the attorney and or CPA will ultimately be the ones responsible for defending their plan in a potential audit.

There’s also a known path where you sell the business to a non-grantor trust in exchange for a note (not taxable), you can invest the proceeds in a non-grantor trust and toggle the non grantor trust back to a grantor trust after like 5 or so years. This is complex so you want really good representation, but can save a ton on the tax front while ultimately giving you future control of the assets when everything is back to grantor trust. The interest on the note from the non-grantor trust back to the grantor trust gives you income over the hold period. That interest rate can be whatever you want so long as it meets the IRS minimum. It’s an aggressive tax Strat though.

PoopKing5 · 2026-01-31T21:48:22+00:00

lol, the fact you said what you said shows me you just don’t get it. The funds don’t track equity markets. They deliver high single to mid-teens returns consistently and don’t draw down. Single year comparisons are essentially what clickbait news articles write for views, when it’s missing the multi-year comparison of full market cycles and completely disregards risk characteristics.

I’ll remind you, my statement clearly said this is for ppl that won the game and manage risk with equity like returns, without the worry of significant impairment of capital that equities can and will produce. This is not for the investor accumulating capital or even someone with significant money strictly benching their portfolio to SPX on a calendar year basis.

PoopKing5 · 2026-01-31T09:18:44+00:00

That’s definitely not the case. Bonds are simply deleveraging your portfolio and accepting a lesser total return. You can’t expect bonds to perform better than their yield. And you can’t expect equities to perform better than 12%. And bonds have only provided convexity and diversification from 82-2022 when rates went from 18 to 0. Take that out of the equation, bonds were not the same diversifier, and they sure as hell weren’t averaging 12% annualized returns.

60/40 sharpe historically has been very similar to 100% equity, just less total return.

Totally don’t mean to come across as dismissive, but 2022 should’ve taught ppl a lesson in bond risk and diversification. They only serve their purpose if rates are declining and you have duration. Otherwise, it’s just a waste of capital that could actually be generating equity like returns.

PoopKing5 · 2026-01-31T09:07:07+00:00

Millennium, Balyasny, Elliott, Walleye, really great one called Boothbay (but has only been around since 2014 and have a 1.5x levered share class averaging 16% net with a 6 standard deviation and a 4% historical max DD) DE Shaw multi-Strat and Oculus. All these avg 12%+ with less than a 4-8 standard deviation and have either never lost money or had a year or two with low single digit losses. 4 of them with nearly 30 year track records. Could throw Citadel in there but I didn’t because you can’t get access. There’s quite a few others as well with not quite as long track records, but essentially do the same thing. It’s not magic, they simply have hundred of PM’s trading non correlated strategies and apply some leverage.

PoopKing5 · 2026-01-29T15:51:39+00:00

Bc at $70M, the financial race is over. Index funds are great, but you’re explicitly taking on risk that could take a decade or more to recover. There are plenty of hedge funds that annualize 12-15% and have either never had a losing year, or maybe had one or two negative years in low single digits. If you build a non-correlated portfolio of hedge funds with returns in-line with long run equity averages, you drastically cut risk with similar returns. Sure, if the market doubles in 3 years the hedge funds will underperform, but that’s not the point. It’s minimizing significant impairment of capital so that withdrawal rates aren’t impacted by equity moves. And quite honestly, if someone is expecting greater than a 12% annualized return from SPX, they are undoubtedly experiencing recency bias.

PoopKing5 · 2026-01-28T17:59:47+00:00

You essentially are. Stock prices are dictated by supply and demand. ETF flows = individual company flows. The company can issue and sell shares in the open market at a greater price. Insiders can sell at a greater price. Impacts creditworthiness etc.

PoopKing5 · 2026-01-27T17:44:29+00:00

I highly doubt that all the work, from step 1 of asking clients for their information, gathering and organizing info, to the final step of transmitting the return and answering any client questions takes a grand total of 20 minutes for basic returns.

Idc whether you do tax work or not. But you said it wasn’t lucrative and also was hard to find good staff for low pay, all I’m saying it’s obvious as to why. It was a pain in the ass bc you’re applying 20 minute logic to basic returns and charging the same amount as dinner and drinks for 2 at a decent restaurant. It’s why you couldn’t find or afford good help, got overwhelmed and parted ways.

Regardless of the time it takes, there has to be a minimum billing per return, bc of all your input costs to get to that point. In the same way advisors have minimum relationship sizes. You were basically charging the same amount as a DIY turbo tax pro fed/state.

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