Managed account provider and turnkey asset management platform SEI announced its acquisition of LifeYield, a tax optimization software company, this week.
The deal is intended to provide SEI and its client advisory firms with real-time, automated, unified managed household capabilities.
Terms were not disclosed, though SEI’s announcement did note the addition of LifeYield, which has around 40 employees, did not represent a significant acquisition of assets and was not “otherwise material to SEI’s operations or financial results.”
While there are other providers of unified managed household capabilities, including MyVest, Smartleaf, Vestmark and more, the acquisition is meant to provide a lower-cost option that is also a fully bundled overlay solution.
Following the addition, SEI plans to integrate all of LifeYield’s APIs into its existing SEI Wealth Platform and later expand on those capabilities with a new front-end solution for on- and off-platform distribution for UMH accounts.
“We believe that integrating LifeYield's tax-smart technology with our investment, technology and evolving multi-custody capabilities creates a unique suite of tax management solutions that position SEI as the industry leader in enabling the efficient accumulation and transfer of wealth, as well as maximizing retirement income,” said SEI chief product officer J. Womack. “Both firms fervently believe that tax optimization is a philosophy, not a feature.”
Specifically, the combined companies’ UMH capabilities will include asset location, tax-loss harvesting, ongoing household portfolio management and tax-efficient rebalancing.
This will help advisors in determining the best withdrawal strategies for retirement income across multiple household accounts and maximize Social Security benefits.
“Optimized withdrawals for generating retirement income is what I have in mind when I think of LifeYield, and tax optimization is client-specific and one of the key requirements for building multi-account capabilities,” said industry analyst and consultant Alois Pirker, who has run his own consultancy, Pirker Partners, for the last two years.
Pirker added that SEI could leverage other advantages from the acquisition in the future.
“SEI is a trust player, and I can see these capabilities layered across multiple platforms, those for RIAs and trusts for example, or I could see them being added as a chassis that layers across the platforms,” he said.
LifeYield has provided its APIs to or partnered with numerous firms over the years, from wirehouses and asset managers that include Morgan Stanley and Russel Investments, to RIAs and RIA technology platforms, including Mercer Advisors and Summit Wealth.
Serial entrepreneur Mark Hoffman launched the company in 2008. He previously founded Lattice Trading and co-founded Upstream Technologies, which were later acquired by State Street Brokerage Services and Fiserv, respectively.
"Joining the SEI team is a next step in building upon our existing strategic partnership,” Hoffman said, referring to the relationship between the firms established in 2022.
“We're excited to deliver a UMH solution that considers the entirety of a household, so the tax benefits extend to everyone who is part of a client's financial picture,” he said.
