Envestnet PMC will be using lower cost share class mutual funds in their Flagship portfolios. These lower cost funds will be used with new business and share class conversions will be made in existing accounts. The changes to the portfolios were originally scheduled for the week of April 26th but have been postponed until May 17th.
Specifically, making this change will involve updating the portfolios on the platform for new business proposals, as well as completing a share class conversion on the existing accounts.
Share class conversions are not a taxable event, and don’t result in any new paperwork for advisors and clients. It will, however, require the accounts be put on trade hold while the conversions are completed*. In addition, the conversion will generate a confirmation of the conversion to the client, which may generate questions from your clients, so you may wish to discuss these changes with your clients before May 17th.
To view the specific changes to the portfolios, click here.
*The trade hold is temporary and is designed to prevent trading in the account at the same time the conversion is being done. In the event of an emergency, ESI could work with Envestnet to manually trade the account if necessary.
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