Envestnet and Vanguard are expanding their partnership to tackle one of the biggest obstacles to broader adoption of model portfolios: the tax bills that can come with moving longtime clients into them.

While model portfolios have become a staple of modern wealth management, allowing advisors to outsource investment management and spend more time on financial planning, many are reluctant to trigger capital gains levies by leveraging them, especially for clients with highly appreciated, legacy portfolios.

To bring more expertise to bear on the challenge, Envestnet announced last week that Vanguard will join its Fund Strategist Tax Management (FSTM) Advantage program, which helps advisors make such transitions in a tax-sensitive…