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Advisor Wars

Advisor Wars

Written by: Obsidian CIO
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In the Advisor Wars podcast, hosts Bob Huebscher (founder of Advisor Perspectives) and Joe Halpern (Managing Partner and CIO of Obsidian CIO) tackle one of the most critical trends facing financial advisors today: alternative investments.

Subscribe to Advisor Wars on YouTube, Apple Podcasts, and Spotify to ensure you never miss an episode.

Listeners can download the new White Paper by Obsidian CIO, here:

How to Scale an RIA to $1 Billion and Beyond

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IMPORTANT DISCLOSURE: Obsidian CIO LLC sponsors the podcast to further education and critical thinking about the factors that affect markets and investing, and the podcast does not provide investment advice. Investment advice is only offered to clients of Obsidian CIO who have entered into an advisory agreement and with whom Obsidian CIO has identified individual objectives, risk tolerance, and other investment needs.Obsidian CIO, 2026 Economics Personal Finance
Episodes
  • The Advisor's Guide to Section 351 ETF Exchanges

    The Advisor's Guide to Section 351 ETF Exchanges
    Jun 24 2026
    In this episode of Advisor Wars, hosts Bob Huebscher (founder of Advisor Perspectives) and Joe Halpern (Managing Partner and CIO of Obsidian CIO) continue their series on the role of tax planning in the advisory profession.

    This time they tackle one of the most talked-about yet least understood tools available to RIAs: Section 351 exchange ETFs and related tax-efficient diversification strategies.

    Joining them is Meb Faber, co-founder and Chief Investment Officer of Cambria Investment Management and author of multiple books on investing. Faber's firm has run several Section 351 launches and is one of the few opening these exchanges to outside advisors and investors through open syndication. Concentrated and highly appreciated stock positions are one of the most common, and most expensive, planning challenges for wealthy clients.

    After a 17-year bull market, many investors want to diversify but fear the tax bill, and the solutions go far beyond simply selling and paying the tax. Advisors who understand the full toolkit, including Section 351 ETF contributions, exchange funds, direct indexing, and long/short overlays, will be positioned to deliver far greater after-tax outcomes for their clients.

    Key takeaways for advisors:

    Tax alpha is the easiest alpha: Faber argues the "old, boring alpha" of fees and taxes is far simpler to capture than chasing market calls. Choosing the right structure can be worth 1.5% or more per year in a taxable account.

    The ETF structure is the engine: The creation/redemption mechanism lets ETFs rebalance and defer gains rather than passing them to shareholders, the key reason ETFs are taking market share from higher-cost, less tax-efficient mutual funds.

    Section 351, explained simply: A 100-year-old provision in the tax code now paired with the ETF wrapper. Contribute a concentrated or highly appreciated portfolio, receive a diversified ETF in return, and defer the gain. Think of it as a 1031 exchange for stocks. It's a deferral, not a tax wash.

    Know the rules before you pitch it: The top position can't exceed 25% of the contributed portfolio, and the top five can't exceed 50%, so you generally need twelve or more stocks, or a diversified ETF that looks through to its holdings. Only liquid stocks and ETFs qualify, not bonds, crypto, options, mutual funds, or micro-caps.

    Cost is the differentiator: Traditional exchange funds under Section 721 require accreditation, a seven-year hold, and fees around 1% to 1.5%. Faber's Section 351 launches carry a 0.25% expense ratio with no lockup, and cost basis carries over from the contributed positions.

    A real opportunity for independent advisors: Over $20 billion has flowed into these structures in just a couple of years, with strong adoption among family offices. Many legacy incumbents can't or won't offer them, creating an opening for RIAs and individual investors.

    It doesn't have to be all-or-nothing: Match the solution to the client's full situation. Younger clients in low brackets may prefer to harvest gains now, and partial moves often make more sense than wholesale diversification. As Faber jokes, the oldest capital-gains solution of all is a bear market.

    Stick around to the end, where Faber discusses his new book, Investing in America: The Rise of a 250-Year Bull Market, out July 4th on Amazon and other major book retailers.

    To learn more about Cambria Investment Management or connect with Meb Faber, visit www.cambriafunds.com.

    Subscribe to Advisor Wars on YouTube, Apple Podcasts, and Spotify to catch every episode in this series on tax planning, including upcoming episodes on direct indexing and other tax-aware strategies for the mass affluent.

    To learn more about Obsidian CIO or connect with Joe Halpern, visit www.obsidiancio.com.

    IMPORTANT DISCLOSURE: Obsidian CIO LLC sponsors the podcast to further education and critical thinking about the factors that affect markets and investing. The podcast does not provide investment advice. Investment advice is offered only to clients of Obsidian CIO who have entered into an advisory agreement and with whom Obsidian CIO has identified individual objectives, risk tolerance, and other investment needs.
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    45 mins
  • The Advisor’s Guide to Long / Short Tax Strategies

    The Advisor’s Guide to Long / Short Tax Strategies
    May 18 2026
    In this episode of Advisor Wars, hosts Bob Huebscher (founder of Advisor Perspectives) and Joe Halpern (Managing Partner and CIO of Obsidian CIO) continue their series on the role of tax planning in the advisory profession.

    This time they go deep on one of the more sophisticated and misunderstood tools available to RIAs: long/short overlay strategies for concentrated stock positions.

    Joining them is Brent Sullivan, founder of Tax Alpha Insider and a leading consultant to family offices and ultra-high-net-worth individuals on advanced tax management. Brent brings a rare engineering mindset to tax strategy and his precision shows.

    Concentrated stock positions are one of the most common, and most expensive, planning challenges for wealthy clients. The stakes are enormous, and the solutions go far beyond simply selling and paying the tax.

    Advisors who understand the full toolkit, including long/short overlays, exchange funds, Section 351 ETF contributions, and direct indexing, will be positioned to deliver far greater after-tax outcomes for their clients.

    Key takeaways for advisors:
    • Long/short is an alpha strategy first: The tax benefits are real, but they're the gravy, not the potato. Advisors who lead with tax and ignore alpha generation are missing the mark entirely.
    • The fishing net analogy: Direct indexing gives you $1 of harvesting surface for every $1 invested. Long/short can expand that to $3, $5, or more, dramatically widening the opportunity set for tax loss harvesting.
    • Short positions are a different beast: Unlimited risk, squeeze dynamics, lender recalls, and asymmetric custodian power make short exposure unlike anything in a traditional long-only portfolio. Advisors must understand this before recommending it.
    • Manager selection is everything: The RIA's job is rigorous due diligence, on alpha generation, risk management, operational competency, and short-position expertise. Picking the wrong manager is the most common mistake.
    • Jurisdiction matters: State tax regimes, like Washington State's unique capital gains structure, can significantly affect whether long/short is the right solution — or whether an exchange fund or options overlay makes more sense.
    • Flexibility is the long/short advantage: Unlike exchange funds or Section 351 contributions, long/short is fully customizable at the household level, allowing for liquidity access, tailored sector hedges, and even the ability to maintain some exposure to the concentrated position.
    • Costs are real and substantial: Manager fees, financing costs, and trading friction mean that alpha must be present and meaningful — not assumed.
    • Know your client's complexity tolerance: Some clients want to understand every layer of the strategy; others want to trust and delegate. The advisor's job is to map the solution to both the financial and psychological profile of the client.

    Long/short strategies are growing and as more managers enter the space and custodial lending infrastructure matures, they will become an increasingly important tool for advisors serving high-net-worth clients.

    Subscribe to Advisor Wars on YouTube, Apple Podcasts, and Spotify to catch every episode in this series on tax planning, including upcoming episodes on operational playbooks, client conversations, and building repeatable tax-aware processes.

    To learn more about Obsidian CIO or connect with Joe Halpern, visit www.obsidiancio.com.

    IMPORTANT DISCLOSURE: Obsidian CIO LLC sponsors the podcast to further education and critical thinking about the factors that affect markets and investing. The podcast does not provide investment advice. Investment advice is offered only to clients of Obsidian CIO who have entered into an advisory agreement and with whom Obsidian CIO has identified individual objectives, risk tolerance, and other investment needs.
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    31 mins
  • Why Taxes Could Be Your Last Great Differentiator, And What to Do About It

    Why Taxes Could Be Your Last Great Differentiator, And What to Do About It
    Apr 15 2026
    In this episode of Advisor Wars, sponsored by Obsidian CIO, hosts Bob Huebscher (founder of Advisor Perspectives) and Joe Halpern (Managing Partner and CIO of Obsidian CIO) kick off a new series on the role of tax planning in the advisory profession.

    Advisors will discover why mastering tax portfolio management may be the single most powerful way for RIAs to separate themselves from commodity advisors.

    Tax is one of the two largest lifetime expenses for most clients right alongside housing. Yet many advisors still treat it as an afterthought.

    In this episode, Bob and Joe explore why that can no longer be the case, what's changed in the advisory landscape over the last three to five years, and how the convergence of new products and better technology is raising the bar for what clients should expect.

    Key takeaways for advisors:
    • Tax is not optional: It's one of your client's top two lifetime expenses, treat it that way
    • Tax harvesting is table stakes: If you're not offering it, clients should be asking why
    • Premium strategies exist: Long/short tax extensions, exchange funds, and direct indexing go well beyond checkbox harvesting
    • Start with the basics: Maximizing 401(k) matches, 529s, and HSAs can make a bigger difference than any sophisticated product
    • Think in after-tax, after-fee returns: Gross performance is a distraction — net is what matters to clients
    • Technology is the great enabler: Advisors who build or partner with the right tech stack will be able to customize at scale in ways that were impossible just a few years ago
    • An OCIO can do what internal teams often can't: Deep focus on portfolio-level tax integration, freeing advisors to do what they do best, build client relationships

    The advisors who thrive in the next decade won't just manage portfolios. They'll manage tax outcomes. This episode tells you where to start.

    Subscribe to Advisor Wars on YouTube, Apple Podcasts, and Spotify to catch every episode in this series on tax planning, including upcoming episodes on operational playbooks, client conversations, and building repeatable tax-aware processes.

    To learn more about Obsidian CIO or connect with Joe Halpern, go to www.obsidiancio.com or download their White Paper, How to Scale Your RIA to $1 Billion and Beyond.

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    IMPORTANT DISCLOSURE: Obsidian CIO LLC sponsors the podcast to further education and critical thinking about the factors that affect markets and investing. The podcast does not provide investment advice. Investment advice is offered only to clients of Obsidian CIO who have entered into an advisory agreement and with whom Obsidian CIO has identified individual objectives, risk tolerance, and other investment needs.
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    27 mins
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