--- title: "Tax Alpha Is the New Alpha: Brent Sullivan Shares Investment Trends" description: Discover how tax-efficient strategies like direct indexing and long/short implementation can unlock greater after-tax value for clients. image: https://riacsuite.com/hubfs/Clearstead%20(3).png --- [![RIA C-Suite Logo](https://riacsuite.com/hubfs/RIA%20C-Suite%20Logo.png)](https://riacsuite.com) - [Content Hub](https://riacsuite.com/insights) - [Custom Index 101](https://riacsuite.com/custom-index) - [Digital Marketing 101](https://riacsuite.com/ria-digital-marketing) - [Webinars](https://riacsuite.com/webinars) - [Videos](https://riacsuite.com/videos) - [3 Good Questions](https://riacsuite.com/videos#three-good-questions) - [Done in 90 Seconds](https://riacsuite.com/videos#done-in-90-seconds) [![Demo Portal](https://no-cache.hubspot.com/cta/default/47138624/240dfc16-ca7d-4403-b5e5-40ff02093b05.png)](https://cta-redirect.hubspot.com/cta/redirect/47138624/240dfc16-ca7d-4403-b5e5-40ff02093b05) EVO Wealth Consulting # Tax Alpha Is the New Alpha: Brent Sullivan Shares Investment Trends Discover how tax-efficient strategies like direct indexing and long/short implementation can unlock greater after-tax value for clients. [Mike Casciano](https://riacsuite.com/ria-c-suite-insights/author/mike-casciano) Aug 6, 2025 --- **Tax Alpha Is the New Alpha: Brent Sullivan on Direct Indexing, Long/Short Strategies, and Unlocking Frozen Portfolios** *By Mike Casciano | 3 Good Questions Interview Series* Tax efficiency isn’t a back-office function anymore—it’s a competitive edge. In our latest *3 Good Questions* conversation, I sat down with **Brent Sullivan**, founder of **Tax Alpha Insider**, to explore how advisors can deliver greater after-tax value through smarter portfolio construction and implementation. If you're still talking tax-loss harvesting as an annual “cleanup,” you’re behind. Brent brings a unique background—PIMCO, Parametric, startups, and now consulting with ETF sponsors, sub-advisors, and hedge funds. But what sets him apart is his ability to make complex tax strategies visual, approachable, and actionable for advisors. Here are the key takeaways from our conversation. --- ### **1. Direct Indexing Is Just the Start** Brent breaks down the basics: **direct indexing** is the construction of a portfolio with individual securities to track a passive index—offering **granularity** that enables tax-loss harvesting, customized exclusions, and even gifting strategies. But where it really gets powerful is in how it evolves. Custom indexing takes this a step further by dialing in **factor exposure**, optimizing across benchmarks, and controlling for individual client preferences. While direct indexing was once seen as a tax-only strategy, Brent makes clear: **risk customization** and **portfolio personalization** are equally important drivers of value. --- ### **2. Long/Short for Tax Alpha in Any Market** One of the most powerful (and least understood) ideas Brent brings to light is **tax-aware long/short implementation**. For clients with highly appreciated positions, tax-loss harvesting opportunities dry up. Enter margin and shorting. By injecting **short exposure into an equity portfolio**, advisors can generate **harvestable losses** in both rising and falling markets. These losses offset gains elsewhere, creating more **trading flexibility** and extending the **lifespan of tax alpha**—even in portfolios that would otherwise be frozen by embedded gains. As Brent puts it: “You’re managing risk and generating tax assets on the household balance sheet. That flexibility is invaluable.” --- ### **3. From Sleeves to Householding: Cross-Account Awareness is Essential** Another crucial insight: **tax management can’t be siloed.** Brent emphasizes the growing need for **cross-account optimization**—managing IRAs, taxable accounts, trusts, and donor-advised funds together in a coordinated strategy. Tools and vendors may help, but it’s on the advisor to know, for example, that selling Google in a long/short sleeve and buying it in a spouse’s IRA creates a **permanently disallowed wash sale**. Visibility and planning across the entire **household balance sheet** is no longer a “nice to have”—it’s a requirement for real tax alpha. --- ### **4. The 351 Exchange: Unlocking Frozen Portfolios** Many advisors are managing legacy portfolios with massive embedded gains—what Brent calls “frozen capital.” His answer? The **Section 351 exchange**, where appreciated securities are contributed in-kind to a new ETF. This IRS code provision enables **re-diversification without triggering gains**, offering a game-changing way to transition concentrated or direct-indexed portfolios into more tax-efficient ETF wrappers. Brent even wrote a short, illustrated book on the subject to make the concept accessible—and funny. --- ### **5. Why This Matters: Advisors Need to Lead on Taxes** Too many clients don’t realize how much tax drag is eroding their long-term performance. Brent challenges advisors to bring these conversations forward and arm themselves with the tools and strategies to do it confidently. “In a world where alpha is scarce, **tax alpha is abundant**—and it’s one of the key areas where advisors can make a real, measurable impact.” --- 🎥 **Watch the full conversation with Brent Sullivan** Get smarter on direct indexing, tax-aware long/short strategies, and how to deliver more value to high-net-worth clients with taxable accounts. [Watch the Video](https://riacsuite.com/3-good-questions) [EVO Wealth Consulting](https://riacsuite.com/ria-c-suite-insights/tag/evo-wealth-consulting) ## Similar posts Smartleaf Asset Management ### [Smartleaf Article - Go Sleeveless or Go Home](https://riacsuite.com/ria-c-suite-insights/smartleaf-article-go-sleeveless-or-go-home) Discover the benefits of holistic portfolio management and direct indexing, comparing sleeves and sleeveless approaches for optimized trading and tax... 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