In a Monday interview with Bloomberg Television, Rob Sharps highlighted separately managed accounts as the focal point for the firm's tax work, saying it "is where a lot of the emphasis on tax-loss harvesting and tax optimization has really manifested itself." Tax-loss harvesting generally entails selling positions at a loss to help reduce capital gains taxes over time.
At a July industry event, some officials from the US Treasury Department voiced concerns about strategies designed to lower clients' tax liabilities. Sharps acknowledged that "certain products in the market" could face heightened scrutiny, but said he's "very comfortable" with how T. Rowe would implement its approach. Even as tax-cutting tactics proliferate on Wall Street, competitors Charles Schwab Corp. and Fidelity Investments have started dialing back such methods.
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T. Rowe Price, based in Baltimore, has been under pressure since 2022, when sharp declines in stocks and bonds led to billions of dollars in client outflows. Seeking new revenue streams, the firm rolled out its first interval fund last month through a partnership with Goldman Sachs Group Inc., aiming to broaden retail investors' access to alternative assets. The company also bought alternative credit manager Oak Hill Advisors in 2021 and earlier this year hired Bill Cashel to lead its expansion in alternatives across the US wealth market. Cashel had earlier served as a partner at AQR Capital Management, an organization that has helped pioneer tax-aware investing.
