Unified Managed Accounts and Overlay Portfolio Management.

Unified Managed Accounts and

Overlay Portfolio Management

Coordinating the investment recommendations across multiple managers;

Incorporating client restrictions or mandates;

Trade order management and execution with multiple custodians;

Active tax management

Overlay Portfolio Management (OPM) is the core process that drives a Unified Managed Account (UMA).

Effective OPM requires leading edge technology and experienced portfolio managers, resources few independent advisors can effectively muster.

OPM Active Tax Management

Taxes matter, creating a drag on overall return. Active tax management services seek to minimize that drag.

• Cross-manager coordination, wash sale avoidance

• Tax-sensitive rebalancing– Attempting to actively match gains and losses

• Transition management– Tax-sensitive legacy asset transfers and disposition

• Possible delay of gain recognition until… – Long-term gain status realized– Subsequent tax year

• Loss / Gain Harvesting– Ongoing, opportunistic harvesting in accordance to specified parameters– Mandated loss / gain targets (typically year-end)

• Integration of external tax events into management of the portfolio

• Low Cost-Basis and Concentration Stock Protection

Advisor

WealthADV

Money Money ManagerManager

How WealthADV Unified Managed

Accounts (UMAs) work

WealthADVUMA

Client

WealthADV Overlay Portfolio Management Process, Methodology and Organizational Workflow

Discussion

Overlay Portfolio Management Workflow

• Program Design• Client Proposals• Model Onboarding• Overlap Analysis• Composite Design and Validation

• Establish Cash In/Out Treatment• Define Portfolio Monitoring Rules• Define Tax Treatment • Establish Transition Plan• Build Pre-Trade Compliance Mandates


• Custodial Selection • Select Custodial Pricing Schedule• SMA to UMA Account Merge• Tax Lot and cost Basis Validation

* Component of Active Tax Management option


• Identify Security Inheritance• Tax Term • Low Basis Lot ID• Transition Planning



• Tracking Error Drift• Cash Deposits• Liquidation Requests• Cash Floor Violations

• Cash Ceiling Violations•Compliance Violation•Tax Optimization



• Manager Trades• Composite Reweightings• Manager Hire/Fires• Scheduled Rebalancing• Ad Hoc Tax Harvesting• Fees and Client Billing



Portfolio Operations

• Trading• Allocations• Lot Level write-downs•Manager Lot Tagging•Settlement

Portfolio Administration

•Corporate Action Processing•Auditing •Manager Review•Trade Rotation Validation



Portfolio Administration

• Client Billing•Manager Payment Remittance•Contract Management •Advisor Communication

Portfolio Operations

• Manager Onboarding• Manager ADV , Collateral, Performance Collection and Distribution

Overlay Portfolio Management Organization

Brokers Custodians FIX Network

Brokers Custodians FIX Network

Due Diligence Providers Model Providers

Due Diligence Providers Model Providers

Advisors Advisors

Unified Managed Accounts and Overlay Portfolio Management.

Documents

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