Issue link: https://resources.envestnet.com/i/1533175
FOR ONE ON ONE USE WITH A CLIENT'S FINANCIAL ADVISOR © 2024 Envestnet. All rights reserved. 1 Overlay Services FAQs What are the requirements for an account when selecting Overlay Services (OS)? • OS is an optional service for UMA accounts with at least one managed products. • Mutual funds, Exchange traded Funds (ETFs), Fund Strategist Portfolios (FSPs), bond and equity Separately Managed Accounts (SMAs) sleeves may be part of the asset allocation. • At least 50% of the UMA account must be allocated to managed products. • A security restriction or trade hold of "Do-Not-Sell" may not be used. • Tax Overlay is available for taxable accounts while Values Overlay is available for taxable and non‑taxable accounts. • For Tax Overlay accounts, cost basis must be complete and accurate. • If the client wishes to restrict the amount of long-term capital gains, the advisor must contact an Overlay Services Specialist to discuss the implications and viability in restricting realizing capital gains. Who is the ideal client for Tax Overlay Services? • Clients in high income tax brackets resulting in a significant difference between income tax rate and long term capital gains rate. • Clients investing large percentage of their portfolio allocated to managed products. • Clients looking to control the gains realization in their portfolio while accurately replicating the managed product's strategy. What are the primary benefits of Tax Overlay Services? • Taking advantage of the managed account structure to implement client-specific tax budgets. • Minimizing or eliminating short-term capital gains. • Migrating portfolios from one model to another in a tax-efficient manner. • Addressing ongoing model changes in a tax-efficient manner. How are taxes managed in a Tax Overlay account? • Proprietary risk based optimization engine is enabled to provide recommended trades based on several factors including but not limited to capital gains budget, client specific holdings, manager model portfolios, rebalancing, cash & security deposit and withdrawals. • Deferring the realization of short-term gains until they reach long term gains status. • Offsetting short-term gains with losses that may be available within the account. • Deferring the realization of gains to a subsequent calendar year. • Tax Loss Harvesting Frequently Asked Questions FREQUENTLY ASKED QUESTIONS █████████████████ Ì200001R2M(Î