Clients expect personalized portfolios with advanced tax management, but delivering that level of customization means wading through operational obstacles. Jerry Michael, President of Smartleaf and Smartleaf Asset Management (SAM), says that delivering customization need not be burdensome. “Most firms aren’t ambitious enough in what they want to achieve or what they think is possible,” Michael says. “Firms should set their ambitions higher because it is achievable to manage every portfolio, of any size, with whatever level of personalization and tax optimization you want—and there should be no incremental operational effort to do so.”
It’s a bold statement that comes from a fundamental rethinking of what automation should mean in portfolio management.
Beyond the Power Screwdriver
Many platforms in the wealth management space position themselves as efficiency tools. The systems help advisors work faster, generate better reports, or streamline certain workflows. Michael acknowledges the value but draws a sharp distinction between efficiency tools and automation.
“There are many fine systems out there, but most of them are not aiming to automate all the portfolio management details,” he explains. “They’re more like power screwdrivers. They want to help you become more efficient, which is a great thing, but they do not simply automate this task. It’s the difference between a car that may have all sorts of nice features and a self-driving car.”
The distinction matters. With “power screwdriver” systems, advisors still build the bookcase themselves—the tool just makes it a bit easier. True automation, on the other hand, builds the bookcase for you. It changes how advisors spend their days and determines which firms can scale personalized portfolio management profitably.
Michael outlines what he considers the proper standard: “The extra effort it takes to tax-optimize: zero. The extra effort it takes to manage a direct index instead of an ETF: zero. The extra effort to have risk personalization, ESG, or religious value screens: zero. The extra effort to transition accounts in a tax-optimized way: zero.”
The goal isn’t incremental improvement. It’s transformation. Under full automation, complexity doesn’t create extra work. Managing a simple ETF portfolio should take the same effort as managing a deeply customized direct index. Both should require nothing more than pressing a button.
Rebalancing at Scale: How Zero Effort Works
The mechanics behind Smartleaf’s automation reveal how the platform can deliver on Michael’s zero-effort promise—and how firms can rebalance entire books of business without adding operational burdens. The system separates investment strategy from execution, allowing firms to maintain control over the former while delegating the latter to an automated process.
Advisors begin by selecting a target portfolio for each client—essentially the hypothetical portfolio they’d build if the client started with all cash and no restrictions. Most firms maintain between five and 50 such targets, each representing a different client type or risk profile. From there, advisors specify any customization criteria: securities to avoid, ESG screens, tax management preferences, minimum trade sizes, etc.
Once those parameters are set, Smartleaf takes over. Every business day, the platform compares each portfolio to its target and generates specific tax-lot-level trades that aim to keep accounts aligned with their goals while respecting the customization rules. The system handles the entire book of business simultaneously—whether that’s 100 accounts or 10,000—ensuring consistent implementation of investment committee decisions across all clients, typically within a single business day.
When an investment committee updates a firm-level target, those changes cascade automatically to every portfolio following that target, regardless of how customized each account may be. An advisor managing 500 personalized portfolios rebalances just as easily as one managing 50. The operational effort remains zero in both cases.
Firms can also work with SAM, Smartleaf’s sub-advisory service that assumes responsibility for daily portfolio review, rebalancing, and trade execution. Advisors retain control over investment policy and client-specific customization parameters, but SAM handles operational implementation. The arrangement pushes the zero-effort model even further, enabling even smaller teams to manage sophisticated, personalized portfolios at scale.
The result establishes clear boundaries: investment committees focus on strategy and asset allocation, advisors focus on client relationships and customization needs, and Smartleaf handles everything in between.
Reclaiming Time for What Matters
The operational gains from thoughtful automation are obvious. But Michael argues that efficiency is only the beginning.
“Clients don’t come to you specifically for these details—though they’re important,” he notes. “Tax management is the single most reliable source of after-tax alpha available to anyone. But this capability is just the ground floor, the foundation of what every firm should be able to do. Table stakes.”
He compares systematic automation to a thermostat. Homeowners don’t marvel at how it keeps the house at the right temperature—they just expect it to work. Portfolio automation should function the same way: an invisible system that runs quietly and reliably in the background.
“It frees up your client-facing advisors to do what’s important,” Michael says. “And that’s not futzing around with which tax lot to sell. It is developing relations of trust. It is acting as a lifetime coach for those clients. The fact that they can tax optimize every portfolio, they can offer any level of personalization, they should take that for granted—and clients should take that for granted.”
By removing the manual work from portfolio management, advisors can reclaim time for what clients truly value—relationship building, financial planning, and guidance that helps them stay on track through changing markets and life cycles. The advisor who once spent hours each week reviewing rebalancing needs across dozens of accounts can now manage hundreds or thousands of portfolios with the same minimal effort.
Quantifying the Unquantifiable
Michael offers an example from a Smartleaf client who leverages automation to powerful effect during prospect meetings. The firm presents detailed reports showing how much each client has saved or deferred in taxes through active tax management. In most cases, those savings exceed the firm’s advisory fees.
“More than anything else, these reports of taxes saved or deferred close the deal with prospects,” he says. “But it’s not because this is a proof of the firm’s value—nobody should go to an advisor just because they’re great at tax-loss harvesting and tax deferral. Instead, it’s a proof of competence.”
Tax management is, at best, only the third most important thing the firm does, behind financial planning and coaching. But it’s hard to quantify excellence in planning or coaching.
That’s where the value of the report documenting taxes saved or deferred kicks in.
“Clients reason, ‘Hey, if they’re this buttoned-up at the third most important thing they do, tax management, it gives me confidence that they’re buttoned-up at the really important things they do,’ which is financial planning and that lifetime financial coaching.
And because automation handles the portfolio management work, creating detailed reports becomes effortless. Traditional systems often leave no time to document daily portfolio reviews or calculate precise tax impacts. With automation, those reports are generated automatically—a natural byproduct of the process.
Getting Out of the Way
Smartleaf’s mission is simple, as Michael describes it. The platform’s aim isn’t to dazzle; it’s to make the critical work disappear into the background. “We see our role as very basic: we’re clearing the table,” explains Michael. “As I’ve said before, we think everything we do is ‘boring.’ But those boring details—risk, tax, and expense management—should be done well, and done daily, for every account, of every size. And that’s what we do.”
The “boring” work is vital, but it’s not what advisors dream about doing. No one enters the profession eager to optimize tax-lot-level trades or calculate daily drift across portfolios. Automation handles those mechanics so advisors can focus on the human side of wealth management.
“We’re not the ones building trust with end investors. That’s the advisor’s role,” he continues. “We’re giving them back time in their day to focus on those relationships, confident that all the portfolio details are handled expertly.”
The philosophy embraces a clear division of labor. Smartleaf manages the plumbing; advisors manage the people. Each side excels at what it does best.
The Standard Worth Demanding
Michael believes the industry should expect more from technology. Too often, firms settle for tools that make existing processes slightly faster instead of demanding systems that manage those processes altogether.
“We encourage everyone in the industry to be more ambitious and aim for this level of scale,” Michael says. The invitation extends beyond Smartleaf’s client base because he believes all advisors deserve systems that genuinely automate portfolio management rather than simply speeding up manual processes.
Client expectations continue rising. Investors want portfolios tailored to their circumstances, tax situations, and values. Delivering personalized solutions at scale requires automation that removes operational friction.
Smartleaf still gives users full control to customize, experiment, and fine-tune. But the foundation starts at zero effort. Advisors can add complexity without being forced to manage it.
Client expectations keep rising, regulations tighten, and markets move faster than ever. Advisors can’t keep absorbing more operational burden while also deepening client relationships and growing their firms.
Smartleaf’s vision offers a potential way forward: automate the tedious work completely, then channel human talent where it matters most. Let technology handle the thermostat so advisors can focus on helping clients live the lives they want.
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