Best Tax Loss Harvesting Software for a $1 Million Taxable Account

On a $1 million taxable account the fee difference between the cheapest and the most expensive tax loss harvesting software is about $3,100 a year, and the harvesting itself is worth somewhere between $1,800 and $4,400 a year on Wealthfront's own published backtest. That arithmetic decides almost everything. Wealthfront S&P 500 Direct and Frec Classic both charge 0.09%, or $900 a year at this size. Fidelity Managed FidFolios and Schwab Personalized Indexing charge 0.40%, or $4,000. Vanguard Personalized Indexing charges a 0.20% manager fee but only through an adviser, and Parametric and Aperio charge 35 bps with a platform fee stacked on top. At $1 million, all of them will take your money. The question is which of them can clear its own fee.

Every figure here was taken from a provider page or a Form ADV filing, with the date attached. Fees change. Verify before you sign anything. This is educational content, not investment or tax advice, and nobody named here pays us anything.

What changes at $1 million that did not change at $100,000

Three things open up, and one thing gets worse.

The adviser channel becomes available. Below $250,000 the separately managed account managers that dominate this category are simply closed to you. At $1 million, Parametric, Aperio and Vanguard Personalized Indexing will all take the account through an adviser, and their manager fees of 20 to 35 basis points look cheaper than Fidelity's or Schwab's 0.40%. That comparison is a trap, and the next section explains why.

Volume discounts start to appear, and they are small. Schwab Personalized Indexing drops from 0.40% to 0.35% above $2 million, so a $1 million account gets nothing. Vanguard's adviser schedule steps from 0.20% down to 0.18% only above $50 million of aggregate adviser assets. At a single million dollars you are paying rack rate almost everywhere.

Custom index construction becomes worth doing properly. At $50,000 a direct indexing account holds a sampled subset of the index and you take what the optimizer gives you. At $1 million the account can hold enough names to actually express a constraint, whether that is excluding an employer, excluding a sector you are already exposed to through private holdings, or tilting the weighting.

The thing that gets worse is basis depletion. A larger account harvests more in absolute dollars in the early years, which means it drives its own cost basis down faster. Vanguard's Form ADV puts the warning in writing: "over time, the ability of an investor in a tax-managed strategy to harvest losses may decrease and gains may build up in a securities portfolio." A $1 million account that has been harvesting for five years in a rising market can be almost entirely embedded gain, which is a different asset from the one you bought.

The real cost of each option on $1 million

Retail fees checked at each provider in August 2026. Adviser-channel rates transcribed from Form ADV Part 2A filings: Parametric dated 03/31/2026, Vanguard Personalized Indexing Management dated 07/22/2026, Aperio Group LLC dated 03/31/2026. The full side-by-side sits on our tax loss harvesting software comparison.

Why the adviser channel is not the bargain it looks like

A 0.20% Vanguard manager fee against Schwab's 0.40% looks like half price. It is not, because the manager fee is one layer of three.

On Morgan Stanley Select UMA, the platform where a large share of Parametric and Aperio money actually sits, the strategy profiles state a "0.50% maximum quarterly (2.0% maximum annual) MS Advisory Fee" plus an SMA manager fee of "0% to 0.1875% per quarter (0% to 0.75% per year)". Your own adviser then bills separately on top of that. A 35 basis point manager can very comfortably arrive as 1.2% or more all in, which on $1 million is $12,000 a year against Wealthfront's $900.

The adviser channel is worth paying for when you are buying the adviser: coordination across accounts, estate and gifting work, charitable strategies, asset location. It is not worth paying for if all you want is a machine that sells losers and buys similar things. That job is now available at 0.09%.

What the harvesting is actually worth on $1 million

Here is the arithmetic nobody puts in front of you, and at this account size it is the whole decision.

Wealthfront's own whitepaper, backtesting February 2015 to December 2025, found the harvesting benefit ran 0.18% to 0.44% a year of account value on the US stocks portion, depending on a marginal rate between 18% and 44%. On $1 million that is $1,800 to $4,400 a year. Vanguard's 2022 simulation claims "up to 1%-2% or more annually in after-tax alpha", which would be $10,000 to $20,000, but Vanguard attaches a condition that gets dropped every time the figure is quoted: it applies to clients who regularly realize large capital gains. Aperio's filing says the same thing in its own words, that the benefit "presumes that clients have capital gains from active managers, hedge funds, sale of low-cost-basis stock, or other sources suitable for offset."

So run your own number in two cases.

If you have no realized gains this year. Your harvested losses can only offset $3,000 of ordinary income under IRS Topic 409, worth $1,110 at a 37% marginal rate. The rest carries forward, which has real value but not this year. Against a $4,000 Fidelity or Schwab fee you are down about $2,900 before the market does anything. Against a $900 Wealthfront or Frec fee you are roughly flat, with a carryforward building for free. At 0.40%, with no gains to offset, direct indexing on $1 million loses money.

If you realized a $200,000 gain. Offsetting it at the top federal long-term rate of 23.8%, including the 3.8% net investment income tax, defers about $47,600. Now a $4,000 fee is trivially worth paying, and the argument flips completely. This is the case the research describes, and it is why the honest answer to "is it worth it" is a question about your tax return rather than about the platform.

Does a $1 million account get better harvesting?

Not automatically, and the differences that matter are structural rather than size-related.

Scan frequency is the one with a measured price. J.P. Morgan Asset Management modelled 16 scenarios from 2018 to 2021 and found roughly 30 basis points of extra annualized tax alpha purely from scanning daily rather than monthly. On $1 million that is $3,000 a year, produced by nothing except how often the software looks. Fidelity states its harvesting is applied "on a limited basis, at the discretion of the portfolio manager". Parametric's filing says it harvests "when deemed, in Parametric's discretion, to be in the client's best interest". Vanguard Personalized Indexing describes an automated algorithm that "identifies tax-loss harvesting opportunities and initiates buy/sell orders". Those are different products at similar prices.

The index you pick matters more than the platform. Frec publishes historical harvest rates by strategy and the spread is enormous: about 16% of the portfolio on its semiconductor index, 25% on the S&P 500, 44% on small caps and 55% on the Russell 2000. A large-cap index harvests least, because large-cap stocks fall together less often. If harvesting is the point of the exercise, the benchmark choice is doing more work than the vendor choice, and only Frec offers 25 of them.

The mistakes that are specific to this size

Running two accounts that cannot see each other. At $1 million people often split the money, which is exactly how wash sales happen. Schwab discloses the gap plainly: it "does not monitor for wash sales in other accounts held by a client, and as a result wash sales may occur from trading in multiple accounts held by a client, including multiple SPI accounts held by the same client." Two direct indexing accounts tracking similar indices at two providers will disallow each other's losses and neither provider will tell you.

Letting a 401(k) quietly destroy the losses. This is the expensive one. Under IRS Revenue Ruling 2008-5, if the replacement shares are bought inside an IRA within the 61 day window, the loss is disallowed and your IRA basis is not stepped up, so the deduction is forfeited permanently rather than deferred. A biweekly payroll contribution into an S&P 500 fund buys substantially identical shares 26 times a year. No harvesting software on the market can see it. The mechanics are covered in our guide to the wash sale rule and the $3,000 limit.

Assuming the replacement security is safe. Harvesting only works if what you buy back is not substantially identical, and at this account size, with individual positions running to five figures each, the replacement is a real position rather than a rounding error. If you are running any part of this yourself rather than handing it to an optimizer, it is worth pulling a structured research card on the specific company before you swap into it, because "similar sector, different ticker" is a tax test, not an investment thesis, and you can satisfy the first while badly failing the second.

Planning to leave later. A $1 million direct indexing account holds hundreds of positions, many of them fractional, and fractional shares generally cannot move through ACATS. The delivering broker sells them and sends cash, which realizes the gains you spent years deferring. Decide your exit before you enter, using our piece on ACATS transfers and direct indexing.

So which should you use at $1 million?

If you have real capital gains to offset and you want the cheapest competent machine, Wealthfront S&P 500 Direct or Frec Classic at 0.09% are the two to compare, and the choice between them comes down to the index menu. Wealthfront gives you the S&P 500 and the Nasdaq-100. Frec gives you 25 benchmarks including the small-cap and Russell strategies that historically harvest most, at 0.09% to 0.35%. On $1 million both cost about a tenth of what Fidelity or Schwab charge for a comparable job.

If you want a household-name custodian and a human to call, Schwab Personalized Indexing at 0.40% and Fidelity Managed FidFolios at 0.40% are the direct-access options, with the caveat that Fidelity's harvesting is discretionary and Schwab's Personalized Indexing menu has no S&P 500 strategy at all. Both are $4,000 a year at this size, which needs roughly $17,000 of offset gains annually at the top rate just to break even against a cheap ETF.

If your million dollars sits alongside a business, concentrated stock, private holdings or an estate plan, the adviser channel earns its money on everything except the harvesting. Go in knowing the manager fee is the small number, and read the actual adviser-channel fee schedules before anyone quotes you one.

And whichever way you go, settle the portfolio before you settle the vendor. Every product on this page applies the same service to a basket of stocks that somebody chose. Decide the membership, the weighting and the exclusions yourself, test the construction against real market history, and then go shopping for someone to run it. The full fee and minimum comparison is the right next stop once you know what you want held.