Consulting: What are wealth management consulting advising clients?

Raitzin: The one thing Morton Capital is not recommending is what we call the tail wagging the dog. We don't advise our clients to make tax-driven trades. We look at individual investments on their own merits. We take taxes into consideration and want to be as tax-efficient as possible, but I think prematurely selling investments that are throwing off good cash flow because you believe taxes are going up on that tax flow may not be prudent. Where there is good cash flow, there's likely a healthy company. We're looking for companies that have good cash flow that are able to pay out dividends. Those are companies we think still belong in the portfolio.

Consulting: Assuming the capital gains tax does go up, how do you envision clients making different long-term investment decisions?

Raitzin: There are three big umbrellas we're discussing with clients. One of the biggest constraints is actually time. One thing we are discussing with clients is really a Roth conversion. If you have your IRA in a traditional sense, and you've never converted to a Roth IRA, we think this could be the right time to do it. That's definitely something we're discussing with clients. The kicker is that you actually have until October of next year to undo it if you decide it was the wrong step. There are very few times in investing when you get a no-harm, no-foul, so we think depending on a client's tax bracket this year a Roth conversion may make a lot of sense. The other thing we think will happen is on the estate planning side. We're talking to clients broadly about ideas they can execute. One thing that concerns us at this point is we're already in December, if you're not in front of a trust and estate attorney discussing options, it could be very difficult to get anything done before year-end.

One on One with Morton Capital Management's Angela Raitzin

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