Envestnet Partners with Asset Managers to Offer Tax Optimization at No Additional Cost to Investors

Fund Strategist Tax Management Advantage Program Waives Fees for Enterprises Who
Provide Access to Tax Management Offerings at No Additional Cost for Investors

Tax efficiency and access to advanced tax management capabilities continues to be one of the benefits investors value most in working with a financial advisor – especially as their wealth grows. To ensure broader and more seamless access to these important solutions, Envestnet announces that asset managers participating in its Fund Strategist Tax Management (FSTM) Advantage program will join in covering the cost of service for tax management capabilities on the Envestnet platform – removing a cost hurdle for this value-added service.

“This is the latest milestone in our ongoing commitment to empowering advisors to deliver better tax-managed outcomes for end clients, within our managed account offering,” said Erik Preus, Group Head of Investment Solutions at Envestnet. “In partnership with the asset managers in this program, we’re able to address investor concerns and eliminate obstacles to their incorporation of our Fund Strategist Tax Management offering.”

Designed to reduce tax exposure while improving after-tax returns, Envestnet launched this program to give advisors the tools they need to help mitigate capital gains taxes for clients. These taxes can be a portfolio’s largest expense. Advisors whose clients invest in Fund Strategist Portfolios can choose to utilize an optional tax service to help manage their portfolios in accordance with tax sensitivity factors – so that capital gains in portfolios are also managed to stay in line with an investor’s tax preferences.

“There is a great deal of demand among enterprises for technology platforms which offer tax management as part of a customary solutions program – and we have been able to bring ongoing tax management to the market at impressive scale,” said Sarah Bauer, Head of Asset Management Engagement at Envestnet. “Partnering with asset managers to cover a portion of client fees is just another way that we are expanding access to ongoing portfolio tax management for investors while also reducing their expenses.”

By adding Envestnet’s Fund Strategist Tax Management Advantage service to either an existing or new portfolio, advisors can better manage tax consequences for their clients. Advisors have the option to select a desired level of Tax Sensitivity for the portfolio from three options: Very High, High, or Moderate. This selection, personalized for the individual investor, can have a significant impact on the tax savings investors may experience if they are willing to accept more deviation from the Fund Strategist portfolio manager’s model. As the manager makes changes, Envestnet will evaluate the tax cost of executing those changes, subsequently making different trades than the model if needed for tax optimization. The optimization process balances the tax cost of adhering to the model, versus the risk incurred by deviating from the model year-round, with the goal of delivering better after-tax performance.

Asset managers currently participating in the Fund Strategist Tax Management Service include:

• Aptus Capital Advisors
• Ategenos Capital
• Envestnet PMC
• Fidelity Investments
• First Trust
• Franklin Templeton
• Frontier Asset Management
• Goldman Sachs Asset Management
• Horizon
• Janus Henderson
• JP Morgan
• Morningstar
• New Frontier Advisors
• Northern Trust Asset Management
• Ocean Park Asset Management
• SEI
• SSI Investment Management
• State Street
• T. Rowe Price
• WestEnd Advisors

Enterprises interested in making the Fund Strategist Tax Management Advantage service available to their clients at no additional cost may reach out to their respective Envestnet team contacts to learn more about the program.