> For the complete documentation index, see [llms.txt](https://advisorhub.syntheticfi.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://advisorhub.syntheticfi.com/product-deep-dive/retain-aum.md).

# Retain AUM

{% hint style="info" %}

## Selling for cash triggers three costs at once

When a client sells to raise cash, they trigger capital gains, pull themselves out of the market, and shrink your AUM. SyntheticFi avoids all three: the client gets liquidity, stays invested, defers the gains, and your book stays intact.
{% endhint %}

Selling investments is the most expensive way for a client to raise cash. They pay capital gains tax, give up future upside, and you lose AUM. SyntheticFi avoids all three.

### What selling actually costs

* **Capital gains tax.** A client who sells an appreciated position to raise cash owes tax on the gain, often tens of thousands of dollars, for no investment reason. Example: selling $200K from a position that's up 80% realizes roughly $90K in gains, which can mean $20K+ to the IRS between federal and state.
* **Lost market participation.** A well-diversified portfolio that stayed invested would generally have participated in market growth. A client who sold for liquidity gave that up. Staying invested compounds over decades.
* **Lost AUM for you.** Every dollar withdrawn stops compounding in your fee base. Over a long relationship, a single large withdrawal can cost six figures in lifetime fees.

### What SyntheticFi does instead

* **Cash without selling.** A loan against the portfolio delivers liquidity at a low, tax-deductible rate, with the assets staying fully invested.
* **Capital gains deferred indefinitely.** No sale means no taxable event. If the client holds until death, the assets may receive a step-up in basis under current law, which may reduce or eliminate the capital gains tax.\*
* **Your AUM stays intact.** The portfolio keeps compounding at your fee while the loan sits alongside it. From an AUM standpoint, nothing leaves.

For clients with appreciated, diversified portfolios, this conversation pays for itself many times over. The borrowing cost is a fraction of the tax and opportunity cost of selling.

***

[\* Important Disclosures](/disclosures.md)


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