Issue link: https://resources.envestnet.com/i/1533174
Frequently Asked Questions (FAQs) FOR ONE ON ONE USE WITH A CLIENT'S FINANCIAL ADVISOR © 2023 Envestnet. All rights reserved. 4 • Changes in market prices • Changes in risk attributes of the securities in your portfolio or the models • Changes in risk attributes of the market in general Q13: Why did my account realize short term gains, or realize more gains than my desired Tax Budget? • Envestnet may execute transactions in the account even though such transactions may generate tax liabilities, including realizing short-term capital gains or exceeding a desired Tax Budget • A desired Tax Budget is not a limit nor a guarantee, and Envestnet does not guarantee that tax liability in the account will be reduced by using the Tax Overlay Service • If the client requires a guaranteed limit on capital gains realization, the Tax Overlay Service may not be appropriate • Envestnet will not cancel trades to reduce capital gains realization but will make every reasonable attempt to adhere to the client's desired Tax Budget • Some of the reasons for capital gains realization exceeding the desired Tax Budget are: • Client directed requests, such as a Raise Cash • Aligning within required Asset Class or Style Drift thresholds • Mandatory corporate actions Q14: I do not want to realize any more gains in my account at all. How do I stop all gains realization? • The Tax Overlay service is an overlay that is applied to a managed account and is not a "tax prevention" service • The service may reduce gains realization, but cannot permanently avoid all gains realization • The service does not guarantee a limit on tax liability • If a client desires to halt trading of their account they may apply a "Trade Hold" Q15: My account's performance is much lower than I expected, and/or much lower than the manager's model performance, why? • The Tax Overlay Service will deliberately deviate from the manager's model holdings and weights in order to attempt to accomplish the client's desired tax objectives • The account and its sleeves may hold securities that are not part of the UMA Target Allocation Model and may not own all securities that are part of the UMA Target Allocation Model • The account and its sleeves may own model securities at weights very different than the model weight in the UMA Target Allocation Model • These deliberate deviations in holdings and weights, in an attempt to fulfill the client's tax preferences, may cause performance differences and may be significant • The Tax Overlay Service attempts to influence the potential size of these performance differences, but there is no assurance this will be successful • If the client is not comfortable with potentially significant performance differences, they should consider whether the Tax Overlay Service is appropriate for their managed account *Tax overlay fees listed above do not reflect the deduction of investment advisory fees. Performance results will be reduced by fees including, but not limited to, investment management fees and other costs such as custodial, reporting, evaluation and advisory services. For a more detailed analysis of the fees charged, please refer to the Envestnet Asset Management, Inc. Form ADV Part 2A or, Form ADV Part 2A - Appendix 1, as applicable. Past performance is not indicative of future results. █████████████████ Ì200001ATEyÎ