Tax Overlay Campaign

Proposed Asset Transition Summary For more information, go to investpmc.com Envestnet | PMC What is tracking error? As is the case with all tax-managed accounts, there is a trade-off between realizing gains and adhering to the manager's model. Any difference between how PMC's tax-managed account and the manager's model are managed is measured by tracking error (TE). PMC seeks to limit the amount of TE while also balancing the tax implications of each transaction within a client's account. Ultimately, PMC strives to replicate the manager's model as closely as possible, subject to the client's specific tax situation. Note: Clients who choose a zero tax bill as their tax mandate should expect higher TE in their account. How does PMC define tracking error? Tracking error is best described as a measurement of the additional risk associated with not replicating an investment manager's model exactly, and may explain actual performance fluctuations from composite returns. For tax-managed accounts, PMC seeks to limit the amount of tracking error while also balancing the tax implications of each transaction. What are tax budgets? Clients have the option of dictating tax budgets on their accounts by instructing that the amount of gains (long or short) or the overall tax bill be limited to, and not exceed, a certain dollar amount. If there is no budget provided at the time a PATS is requested, PMC will employ a high tax-sensitivity setting in an effort to minimize the tax impact of the transition. The default setting applies only to the PATS report and should not be interpreted as how PMC will trade the actual tax-managed account. An advisor who wishes to replicate the high tax-sensitivity assumption at the time the account is opened can do so by requesting a zero tax bill as the tax budget. Similar to the new account process, tax budgets are communicated to PMC via the firm's back office Operations group. The information, analysis, and opinions expressed herein are for general information only. Nothing contained in this document is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Investing carries certain risks and there is no assurance that investing in accordance with the portfolios mentioned will provide positive performance over any period of time. Investors could lose money if they invest in accordance with the portfolios discussed herein. Past performance is not indicative of future results. Investors should consult with an investment advisor to determine the appropriate investment vehicle. Investment decisions should always be made based on the investor´s specific financial needs and objectives, goals, time horizon, and risk tolerance. The statements contained herein are based upon the opinions of Envestnet | PMC and third party sources. Information obtained from third party sources are believed to be reliable but not guaranteed. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Advisors should always conduct their own research and due diligence on investment products and the product managers prior to offering or making a recommendation to a client. Neither Envestnet, Envestnet | PMC nor its representatives render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor. Client must carefully determine if the use of tax overlay services is appropriate for their circumstances, risk tolerance, and investment objectives. Tax management services are limited in scope and are not designed to permanently eliminate taxes in the account. In providing tax overlay services, Envestnet will allow Client's account to deviate from Client's selected investment strategy. Client's account may experience significant performance differences from the selected investment strategy due to Client's selection of tax overlay services. Envestnet makes no guarantee that the account's performance will be within any range of the selected investment strategy or the strategy´s benchmark. If Client subsequently disables tax overlay services this may result in the recognition of significant capital gains. FOR ONE-ON-ONE USE WITH A CLIENT'S FINANCIAL ADVISOR ONLY. ©2023 Envestnet, Inc. All rights reserved. PMC_FS_PATS_0523 How is a PATS report requested? Advisor starts a new client proposal 1. Proposal Property Tab • Select "Enter my client's current assets.." 2. Current Asset Tab • Click the pencil next to "Current Assets" • "Import Holdings" • Upload Client's cost basis via CSV file 3. Pick an Investment strategy Tab • Select "Tax Overlay Services" 4. UMA Tab • Complete the client's asset allocation with the investment choice for each sleeve 5. Click "Save" Send a PATS request to pmcoverlayservices@envestnet.com. Typical turnaround is 3-5 business day, if required sooner please indicate. • The email should include: - advisor name - client name - proposal name - proposal ID Once an appropriate Long Term Capital Gains budget is determined, the advisor can complete the proposal indicating if needed a Long Term Capital Gains Budget in the Overlay Feature tab. For help or additional question, please contact Overlay Services at pmcoverlayservices@envestnet.com or call 972-996-5404. The following client information is required when requesting a PATS report: █████████████████ Ì200001ATH-Î

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