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4 Applying tax overlay considerations at account implementation. Clients often come to advisors with legacy investments that may no longer align with their current goals. These holdings can carry unrealized gains and undesirable tax consequences. To evaluate the trade-offs between an optimized portfolio and expected capital gains, SEI offers a thorough and transparent tax transition analysis, with multiple approaches and scenario options to evaluate for account implementation. Exhibit 1 Tax management and transition approaches Three transition approaches for SMAs and UMAs To meet the diverse needs of clients and account tax statuses, we offer three tax management approaches: model overlap, light, and standard (Exhibit 1). Each approach considers in-kind transfers and individual tax lots in building the investment strategy. They differ in how they prioritize tax management, diversification, and tracking error limits relative to the target model—factors that collectively provide options for optimizing pre-tax and after-tax returns. Light and standard approaches incorporate advanced tax management elements, providing trade-off options to balance deviation from the target model with net realized gains for implementation, designed to actively harvest losses, defer gains, systematically optimize risk, and control costs. Transition approach Model overlap Light approach Standard approach Goal of approach and trade-off Maximize overlap with investment strategy Lower deviation (risk) from the target model, balancing net realized gains with target model overlap Offers a higher tax sensitivity and potential for less realized gains but higher deviation (risk) from the target model Tracking error Target 0% Low Medium Target model overlap Target 100% High Medium Potential turnover Highest Medium Medium-low Return emphasis Pre-tax After-tax After-tax In-kind security and tax-lot consideration ✓ ✓ ✓ Avoid wash sales ✓ ✓ ✓ Minimize capital gains ✓ ✓ Include ETFs ✓ ✓ Include annual capital gains budget ✓ ✓

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