HILLTOP SECURITIES INC.

Hilltop Securities Inc. Managed Accounts Client Disclosure Brochure Part 2A of Form ADV: Firm Brochure IA SEC Number: 801-55529 CRD: 6220 Hilltop Securities Inc. Attn: Advisory Services Group 717 N. Harwood Street, Suite 3400 Dallas, TX 75201 214-859-6735 Revised March 26, 2025 This brochure provides information about the qualifications and business practices of Hilltop Securities Inc (“HTS”) Any questions about the contents of this brochure, may be directed to HTS at 888-658-9165 or 214- 859-9165 or clientpartners@hilltopsecurities.com. Page | 1  Summary of Material Changes Updated March 26, 2025 This Brochure has been updated with the following Material Changes that have occurred since the last Client Disclosure Brochure update on March 28, 2024. Envestnet was acquired by affiliates of vehicles managed or advised by Bain Capital Private Equity, LP, a private equity firm, and certain minority co-investors on November 25,2024. Envestnet is the parent company of Envestnet Asset Management, Inc., who works with HTS to provide investment advisory services. Envestnet does not anticipate any material changes to its day-to-day advisory business to result from the transaction, and the same management team and professionals are expected to remain in place. Envestnet Asset Management’s ADV Part 2A has been updated to reflect this material change in ownership and is available at: htttps://www.Envestnet.com/Forms-ADV-CRS. You may also request a copy from your HTS IAR. The Endeavor Active/Passive Program has been renamed The Endeavor Program. Additionally, new Endeavor Hilltop Models have been added to accompany the existing Endeavor Foundations and Flagship model portfolios. HTSPM was launched in 2024, and subsequently created a new model strategy, HTSPM Flexible Maturity Strategy, which is now available for IARs and Clients. The Navigator UMA Program has been created as a new advisory program for IARs to offer to clients. The Aviator Discretion Program that was previously closed as of 12/31/2024 to new accounts except on a limited basis has been partially re-established. Only the approved IARs may participate in the Program and establish new accounts. All existing accounts will continue to be supported. The following disclosures have been added in the Disciplinary Disclosures section of this brochure. On August 14, 2024, the Securities and Exchange Commission (“SEC”) entered into a settlement order with Hilltop Securities Inc. (“Hilltop”) to settle an administrative action finding that Hilltop failed to (1) maintain and preserve off-channel communications related to Hilltop’s broker-dealer business, as well as related to recommendations made or proposed to be made and advice given or proposed to be given with respect to Hilltop’s investment advisory business; and (2) reasonably supervise its personnel with a view to preventing or detecting certain of its personnel’s aiding and abetting violations of certain provisions of the federal securities laws. Hilltop admitted to the facts in the settlement order, acknowledged its conduct violated the federal securities laws, and agreed to: (a) a cease-and-desist order, (b) a censure, (c) payment of a civil monetary penalty in the amount of $1,600,000, and (d) certain undertakings related to the retention of electronic communications. Inc. by phone at 888-658-9165 or 214-859-9165 or by email A copy of the current Client Firm Disclosure Brochure is available at any time, without charge, by contacting at Hilltop Securities clientpartners@hilltopsecurities.com. A copy of the most recent disclosure brochure may be obtained by going to the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov. Page | 2  Table of Contents Summary of Material Changes .............................................................................................................................. 2 Advisory Business ................................................................................................................................................. 4 Financial Planning/ Consulting Services ............................................................................................................... 4 Financial Planning/Consulting Fees and Compensation ........................................................................................ 5 Retirement Planning Advisory Solutions .............................................................................................................. 6 Tax and Impact Overlay Services ........................................................................................................................ 11 Advisory Accounts available through Envestnet Asset Management, Inc. .......................................................... 11 Aviator and Co-Pilot Program Overview ............................................................................................................. 12 Mutual Fund Investments available through HTS ............................................................................................... 15 Passport Series SMA/Momentum Pathways UMA ............................................................................................. 16 Hilltop Securities Portfolio Management (HTSPM) ........................................................................................... 18 Types of Services Provided by Hilltop Securities, Inc. as Portfolio Manager .................................................... 18 HTSPM Portfolio Risks ....................................................................................................................................... 20 Brokerage Practices & Best Execution ................................................................................................................ 21 Gateway FSP – Fund Strategist Portfolios ........................................................................................................... 23 Compass UMA Program ...................................................................................................................................... 26 Endeavor Program ............................................................................................................................................... 28 Navigator UMA Program .................................................................................................................................... 30 Destination Fee-Based Annuity Program ............................................................................................................ 34 HTS Program Investment Strategies; Eligible and Ineligible Assets ................................................................... 39 Hilltop Holdings (HTH) Stock ............................................................................................................................ 40 Alternative Investments ....................................................................................................................................... 41 Billing Practices for all Programs ........................................................................................................................ 42 Advisory Program Fees, Compensation, and Other Costs ................................................................................... 44 Funding the Account ........................................................................................................................................... 47 Cash Sweep ......................................................................................................................................................... 48 Bank Insured Deposit Program ........................................................................................................................... 49 Free Credit Balances............................................................................................................................................ 51 Limitation on Security Type ................................................................................................................................ 51 Account Requirements and Types of Clients ....................................................................................................... 52 Methods of Analysis and Investment Strategies and Risk of Loss ....................................................................... 53 Risk of Loss ......................................................................................................................................................... 54 Voting Client Proxies .......................................................................................................................................... 61 Client Information Provided to Investment Managers ......................................................................................... 61 Client Contact with Investment Managers and Insurance Carriers ...................................................................... 62 Account Termination ........................................................................................................................................... 62 IAR Termination from the Programs ................................................................................................................... 62 Disciplinary Information...................................................................................................................................... 62 Other Financial Industry Activities and Affiliations ............................................................................................ 65 Registration as a Broker-Dealer ........................................................................................................................... 65 Registration as an NFA Introducing Broker-Dealer ............................................................................................. 66 Client Referral and Other Compensation ............................................................................................................. 66 Brokerage Practices – Best Execution ................................................................................................................. 67 Payment for Order Flow ...................................................................................................................................... 68 Order Aggregation & Block Orders..................................................................................................................... 68 Client Referral and Other Compensation ............................................................................................................. 69 Code of Ethics, Participation in Client Transactions and Personal Trading ......................................................... 69 Custody ............................................................................................................................................................... 70 Investment Policy Statements .............................................................................................................................. 71 Financial Information .......................................................................................................................................... 71 Page | 3  Advisory Business Hilltop Securities Inc. a Delaware corporation (“HTS”), is a full-service broker-dealer and registered investment adviser, serving the investment and capital needs of individual, corporate and institutional clients, banking and thrift clients, and qualified accounts ((“client,” “clients,” or “their”). HTS is a wholly owned subsidiary of Hilltop Securities Holdings LLC, a Delaware limited liability company. HTS, as a full-service broker-dealer, provides brokerage, execution, clearing, and custody services to its clients. HTS is registered with the United States Securities and Exchange Commission (“SEC”) pursuant to the Securities Exchange Act of 1934, a member of the New York Stock Exchange (“NYSE”), the American Stock Exchange, the Financial Industry Regulatory Authority (“FINRA”), and the Securities Investor Protection Corporation (“SIPC”). HTS is also an Investment Adviser registered with the SEC pursuant to the Investment Advisers Act of 1940. As an Investment Adviser, HTS completes a Form ADV which contains additional information about its business and affiliates. The Form ADV and additional information is available through public filings with the SEC at www.adviserinfo.sec.gov. In comparing account types and managed account programs (“Programs”) and their relative costs, the client should consider various factors, including, but not limited to, the range of investment products available in each Program, preference for an advisory or brokerage relationship, and preference for a fee-based or commission- based relationship. Each HTS managed account is assigned to an Investment Adviser Representative (“IAR”). Any IAR of HTS who provides investment advice for a fee is required to meet the appropriate states’ regulatory requirements which may include an administered examination or an approved designation in lieu of an exam. Registration of an Investment Adviser does not indicate a higher level of skill or training. As of December 31, 2024, HTS has $2,254,166,069.09 assets under management, $598,775,204.57 in an advisor discretionary basis, $1,029,197,247.38 on separately managed discretionary basis, and $626,193,617.14 on a non-discretionary basis. Financial Planning/ Consulting Services HTS provides financial planning services. Financial planning is an investment advisory service that creates a fiduciary relationship. HTS must place the interests of the client above their own or those of their advisors. This disclosure document explains the client's rights and HTS’s obligations in providing the client with a financial plan. Financial planning is a comprehensive evaluation of a client’s current and future financial state by using currently known variables to predict future cash flows, asset values, and withdrawal plans. Through the financial planning process, all questions, information, and analyses are considered as they impact and are impacted by the entire financial and life situation of the client. Clients purchasing this service will receive a written report (“Financial Plan”) which provides the client with a detailed Financial Plan designed to assist the client in pursuing their financial goals and objectives. Financial planning is an ongoing process, and a client's Financial Plan should be reviewed and updated accordingly as their financial situation and life circumstances change. In general, the Financial Plan will address any or all the following areas: PERSONAL: HTS will review family records, budgeting, personal liability, estate information and financial goals. TAX & CASH FLOW: HTS will analyze the client’s income tax and spending and planning for past, current and future years; then illustrate the impact of various investments on the client’s current income tax and future tax liability. INVESTMENTS: HTS will analyze investment alternatives and their effect on the client's portfolio. HTS does not advise on market timing or the timing of product transfers. Page | 4  INSURANCE: HTS will review existing policies to ensure proper coverage for life, health, disability, long- term care, liability, home, and automobile. RETIREMENT: HTS will analyze current strategies and investment plans to help the client achieve their retirement goals. DEATH & DISABILITY: HTS will review the client’s cash needs at death, income needs of surviving dependents, estate planning and disability income. ESTATE: HTS will assist the client in assessing and developing long-term strategies, including as appropriate, living trusts, wills, review estate tax, powers of attorney, asset protection plans, nursing homes, Medicaid, and elder law. BUSINESS FINANCIAL PLANNING: HTS will analyze the needs of a business owner, which includes business cash flow, valuation, tax planning, benefits planning, and transition planning. HTS will gather required information through in-depth personal interviews. Information gathered includes the client's current financial status, tax status, future goals, return objectives and attitude towards risk. After reviewing documents supplied by the client, including a questionnaire completed by the client, HTS will prepare a written report. The Financial Plan might not address all financial issues that impact the client for various reasons (e.g., insufficient data provided, out of the scope of specific plan covered in agreement), and such an omission does not imply that the excluded topic is not applicable to the client’s financial situation. Should the client choose to implement the recommendations contained in the plan, HTS will suggest the client work closely with their attorney, accountant, insurance agent, and/or financial adviser. Implementation of the Financial Plan recommendations is entirely at the client's discretion. Financial planning services do not involve the active management of client accounts or the implementation of specific transactions on the client’s behalf by the advisor. Implementation of specific transactions on the client’s behalf by the advisor would require a separate agreement and fees, which would vary based on the arrangement selected (e.g., fee-based managed accounts, commissioned brokerage). The client should review the written recommendations that they receive, to ensure that they accurately reflect their provided data and financial objectives. The appropriateness of HTS’s recommendations is dependent upon the accuracy of information provided by the client. Financial planning recommendations are not limited to any specific product or service offered by a broker- dealer or insurance company. All recommendations are generic in nature. Clients can also receive investment advice on a narrower basis. This would include tailored advice on specific area(s) of concern, such as estate planning, retirement planning, or any other specific topic. HTS also provides specific consultation and administrative services regarding the client's investment and financial concerns. Consulting recommendations are not limited to any specific product or service offered by a broker- dealer or insurance company. All recommendations are generic in nature. Financial Planning/Consulting Fees and Compensation HTS’s financial planning/consulting fee is determined based on the nature of the services provided and the complexity of each client’s circumstances. All fees are agreed upon prior to entering into a contract with any client. Fee arrangements can be charged in a variety of options determined by the client and their HTS advisor. HTS’s financial planning fees are calculated on an hourly, quarterly, or annual fee basis. Page | 5  • Financial planning/consulting hourly fees are calculated and charged on an hourly basis with a range from $250 to $500 per hour. Although the length of time it will take to provide a Financial Plan will depend on each client's personal situation, HTS will provide an estimate for the total hours at the start of the advisory relationship. Up to half of the estimated payment will be charged as a retainer upon completion of the initial fact-finding session with the client, with the remainder of the fees paid upon completion of the plan, based on actual hours accrued. • Financial planning/consulting quarterly and annual fees are calculated and charged as a fixed fee, either quarterly or annually. The fee varies depending on a variety of factors including the scope of services provided, the complexity of the process, the types of issues addressed, and the frequency of the engagement. The fees for developing a new financial plan differ from the fees for updating an established financial plan. The financial planning fees described above do not include the fees that a client may incur for additional professionals (e.g., accountant or personal attorney) in connection with the financial planning process. If a financial planning/consulting client executes recommended securities transactions through associated persons of the firm in their separate capacities as registered representatives of a broker dealer, those individuals will earn commissions that are separate and distinct from the fees charged for financial planning/consulting. Commissions cannot be credited toward future advisory fees. HTS reserves the right to reduce or waive the hourly fee and/or the minimum fixed fee if a financial planning client chooses to engage the firm for its portfolio management services. Retirement Planning Advisory Solutions Types of Retirement Plan Services HTS offers (1) Discretionary Investment Management Services, (2) Non-Discretionary Investment Advisory Services and/or (3) Retirement Plan Consulting Services to employer-sponsored retirement plans and their participants. Depending on the type of Plan, and the specific arrangement with the Sponsor, HTS may provide advice on one or more of these services. Prior to being engaged by the Sponsor, the firm will provide a copy of this Form ADV Part 2A along with a copy of our Privacy Policy and the Retirement Plan Consulting Agreement (“Agreement”) that contains the information required under Sec. 408(b)(2) of the Employee Retirement Income Security Act (ERISA) as applicable. The Agreement authorizes our Investment Adviser Representatives (IARs) to deliver one or more of the following services: Discretionary Investment Management Services These services are designed to allow the Plan fiduciary to delegate responsibility for managing, acquiring, and disposing of Plan assets that meet the requirements of ERISA. The firm will perform this investment management service through our IARs, and charge fees as described in the form ADV and the Agreement. If the Plan is subject to ERISA, HTS will perform these services as an “Investment Manager” as defined under ERISA Section 3(38) and as a “fiduciary” to the Plan as defined under ERISA Section 3(21). Specifically, the Sponsor may determine that the firm will perform the following services: Selection, Monitoring & Replacement of Designated Investment Alternatives “DIAs” Adviser will review with Sponsor the investment objectives, risk tolerance and goals of the Plan and provide to the Sponsor Investment Policy Statements (IPS) that contains criteria from which Adviser will select, monitor, and replace the Plan’s DIAs. Once approved, by the Sponsor and Adviser will review the investment options available to the Plan and will select the Plan’s DIAs in accordance with the criteria set forth in the IPS. On a periodic basis, Adviser will monitor and evaluate the DIAs and replace and DIA(s). Once approved, Sponsor and Adviser will review the investment options available to the Plan and will select the Plan’s investments in accordance with the criteria set forth in the IPS. On a periodic basis, Adviser will monitor and evaluate the investments and replace any investment(s) that no longer meet the IPS criteria. Page | 6  Non-Discretionary Fiduciary Services These services are designed to allow the Sponsor to retain full discretionary authority or control over assets of the Plan. HTS will solely be making recommendations to the Sponsor. HTS will perform these non- discretionary investment advisory services through its IARs and charge fees as described in this Form ADV and the Agreement. If the Plan is covered by ERISA, the firm will perform these investment advisory services to the Plan as a “fiduciary” defined under ERISA Section 3(21). Sponsor may engage the firm to perform one or more of the following non-discretionary investment advisory services. Investment Policy Statements “IPS” Adviser will review with Sponsor the investment objectives, risk tolerance and goals of the Plan. If the Plan does not have an IPS, Adviser will provide recommendations to Sponsor to assist with establishing and IPS. If the Plan has an existing IPS, Adviser will review it for consistency with the Plan’s objectives. If the IPS does not represent the objectives of the Plan, Adviser will recommend to the Sponsor revisions to align the IPS with Plan’s objectives. Advice Regarding Designated Investment Alternatives “DIAs” Based on the Plan’s IPS or other guidelines established by the Plan, Adviser will review the investment options available to the Plan and will make recommendation to assist Sponsor with selecting DIAs to be offered to Plan participants. Once Sponsor selects the DIAs, Adviser will, on a periodic basis and/or upon reasonable request, provide reports and information to assist Sponsor with monitoring the DIAs. If a DIA is required to be removed, Adviser will provide recommendations to assist Sponsor with replacing the DIA. Advice Regarding Model Asset Allocation Portfolios “Models” Based on the Plan’s IPS or other guidelines established by the Plan, Adviser will make recommendations to assist Sponsor with creating risk-based Models comprised solely among the Plan’s DIAs. Once Sponsor approves the Models, Adviser will provide reports, information, and recommendations, on a periodic basis, designed to assist Sponsor with monitoring the Models. Upon reasonable request, and depending upon the capabilities of the recordkeeper, Adviser will make recommendations to Sponsor to reallocate and/or rebalance the Models to maintain their desired allocations. Advice Regarding Qualified Default Investment Alternative “QDIA(s)” Based on the Plan’s IPS or other guidelines established by the Plan, Adviser will review the investment options available to the Plan and will make recommendations to assist Sponsor with selecting or replacing the Plan’s QDIA(s). Participant Investment Advice Adviser will meet with Plan participants, upon reasonable request, to collect information necessary to identify the Plan participant’s investment objectives, risk tolerance, time horizon, etc. Adviser will provide written recommendations to assist the Plan participant with creating a portfolio using the Plan’s DIAs or Models, if available. The Plan participant retains sole discretion over the investment of his/her account. Advice Regarding Investment of Trust Fund Based on the Plan’s IPS, Adviser will review the investment options available to the Plan and will make recommendations to assist Sponsor with selecting investments that meet the IPS criteria. Once Sponsor selects the investment(s), Adviser will, on a periodic basis and/or upon reasonable request, provide reports and information to assist Sponsor with monitoring the investment(s). If the IPS criteria require any investment(s) to be replaced, Adviser will provide recommendation to assist Sponsor with replacing the investment(s). Retirement Plan Consulting Services Retirement Plan Consulting Services are designed to allow our IARs to assist the Sponsor in meeting his/her fiduciary duties to administer the Plan in the best interests of Plan participants and their beneficiaries. Retirement Plan Consulting Services are performed so that they would not be considered “investment advice’ under ERISA. The Sponsor may elect for our IARs to assist with any of the following services: Administrative Support • Assist Sponsor in reviewing objectives and options available through the Plan • Review Plan committee structure and administrative policies/procedures Page | 7  • Recommend Plan participant education and communication policies under ERISA 404(c) • Assist with development/maintenance of fiduciary audit file and document retention policies • Deliver fiduciary training and/or education periodically or upon reasonable request • Recommend procedures for responding to Plan participant requests Service Provider Support • Assist fiduciaries with a process to select, monitor and replace service providers • Assist fiduciaries with review of Covered Service Providers “CSP” and fee benchmarking • Assist with use of ERISA Spending Accounts or Plan Expense Recapture Accounts to pay CSPs • Assist with preparation and review of Requests for Proposals and/or Information • Coordinate and assist with CSP replacement and conversion Investment Monitoring Support • Periodic review of investment policy in the context of Plan objectives • Assist the Plan committee with monitoring investment performance • Assist with monitoring Designated Investment Managers and/or third-party advice providers Participant Services • Facilitate group enrollment meetings and coordinate investment education • Assist Plan participants with financial wellness education, retirement planning and/or gap analysis Potential Additional Retirement Services Provided Outside of the Agreement HTS and its IARs, while providing Retirement Plan Services or otherwise, can establish a client relationship with one or more plan participants or beneficiaries. Such client relationships develop in various ways, including, without limitation: • • as a result of a decision by the plan participant or beneficiary to purchase services from HTS not involving the use of plan assets; as part of an individual or family financial plan for which any specific recommendations concerning the allocation of assets or investment recommendations relating to assets held outside of a plan; or • through a rollover an Individual Retirement Account “IRA Rollover” In providing these optional services, HTS may offer employers and employees information on other financial and retirement products or services offered by the firm and its IARs. While providing Retirement Plan Services to a plan, IARs may, when requested by a participant or beneficiary, arrange to provide services to that participant or beneficiary through a separate agreement. When a participant requests assistance with an IRA Rollover from his/her plan to an account advised or managed by the firm, a conflict of interest will exist if the fees are reasonably expected to be higher than the fees that would be received in connection with the Retirement Plan Services. For participants invested in plans which the firm does not advise, a conflict of interest arises when compensation is not earned if they remain invested in their current plan. All relevant information about the applicable fees charged by the firm will be disclosed prior to opening a retirement account. Any decision to affect the rollover or about what to do with the rollover assets remain that of the plan participant or beneficiary alone. A. Individually Tailored Services When providing investment fiduciary services, our advice or (if applicable) discretion is tailored to meet the investment policies or other written guidelines adopted by the Sponsor. When providing Participant Investment Advice, such advice will be based upon the investment objectives, risk tolerance and investment time horizon of each individual Plan participant. Page | 8  Fees and Compensation Fees for the Retirement Planning Advisory Services “Fees” are negotiable and vary based upon the nature, scope, and frequency of our services as well as the size and complexity of the Plan. A general description of the different types of fees for Retirement Planning Advisory Services appear in the fee schedule below: Fee Type Fee Range Asset-Based Fees Flat Fees Project or Hourly Fees 0.25% to 0.75% Negotiable based upon size of plan, number of participants, nature, scope, and frequency of services provided Negotiable based upon scope of work performed Depending upon the capabilities and requirements of the Plan’s recordkeeper or custodian, the firm may collect Fees in arrears or in advance. Typically, Sponsors instruct the Plan’s recordkeeper or custodian to automatically deduct Fees from the Plan account; however, in some cases a Sponsor may request that invoices be sent directly to the Sponsor or recordkeeper/custodian. Sponsors receiving Retirement Plan Services may pay more than or less than a client might otherwise pay if purchasing the Retirement Plan Services separately or through another service provider. There are several factors that determine whether the costs would be more or less, including, but not limited to, the size of the Plan, the specific investments made by the Plan, the number of or locations of Plan participants, services offered by another service provider, and the actual costs of Retirement Plan Services purchased elsewhere. In light of the specific Retirement Plan Services offered by us, the Fees charged may be more or less than those of other similar service providers. In determining the value of the Account for purposes of calculating any asset-based Fees, Advisor will rely upon the valuation of assets provided by Sponsor or the Plan’s custodian or recordkeeper without independent verification. Unless the firm agrees otherwise, no adjustments or refunds will be made in respect of any period for (i) appreciation or depreciation in the value of the Plan account during that period or (ii) any partial withdrawal of assets from the account during that period. If the Agreement is terminated by HTS or by Sponsor, a refund of certain Fees to Sponsor to the extent provided in Section 8 of the Agreement. Unless otherwise agreed, all Fees shall be based on the total value of the assets in the account without regard to any debit balance. All Fees paid to the firm for Retirement Plan Services are separate and distinct from the fees and expenses charged by mutual funds, variable annuities, and exchange-traded funds to their shareholders. These fees and expenses are described in each investment's prospectus. These fees will generally include a management fee, other expenses, and possible distribution fees. If the investment also imposes sales charges, a client may pay an initial or deferred sales charge. The Retirement Plan Services provided may, among other things, will assist the client in determining which investments are most appropriate to each client's financial condition and objectives. Other administrative assistance provided to the client as requested. Accordingly, the client should review both the fees charged by the funds, the fund manager, the Plan's other service providers and the fees charged by HTS to fully understand the total amount of fees to be paid by the client and to evaluate the Retirement Plan Services being provided. In the event that any third-party payments are received or subsidies in connection with the Retirement Plan Services offered, a disclosure of such fees to Sponsors in accordance with ERISA and Department of Labor regulations. No increase in the Fees will be effective without prior written notice. Other Compensation Various vendors, product providers, distributors and other providers provide non-monetary compensation by paying for expenses related to training and education, including travel expenses, and attaining professional designations. Payments are also received to subsidize the firm’s training programs and certain vendors invite The Firm to participate in conferences, on-line training or receive publications designed to further our skills and knowledge. Some occasionally provide The Firm with gifts, meals, and entertainment of reasonable value consistent with industry rules and regulations. Page | 9  In the event the payments, or non-monetary compensation, are received in connection with, or as a result of, the Retirement Plan Services, a disclosure of such fees will be made in accordance with ERISA and Department of Labor regulations. Review of Accounts HTS will contact the client at least once a year to review our Retirement Plan Services. It is important that clients discuss any changes in the Plan's demographic information, investment goals, and objectives with their IAR. Plans may receive written reports directly from their IAR based upon the services being provided, including any reports evaluating the performance of Plan Investment Manager(s) or investments. Custody HTS will not serve as a custodian for Plan assets in connection with the Retirement Plan Services. Sponsor is responsible for selecting the custodian for Plan assets. The firm may be listed as the contact for the Plan account held at an investment sponsor or custodian. Sponsor for the Plan will complete account paperwork with the outside custodian that will provide the name and address of the custodian. The custodian for Plan assets is responsible for providing the Plan with periodic confirmations and statements. The firm recommends that the Sponsor reviews the statements and reports received directly from the custodian or investment sponsor. Investment Discretion When providing Retirement Plan Services described herein, HTS may exercise discretionary authority or control over the investments specified in the Agreement. These services are performed by HTS for the Plan as a fiduciary under ERISA Section 3(21) and Investment Manager under ERISA Section 3(38). HTS is legally required to act with the degree of diligence, care, and skill that a prudent person rendering similar services would exercise under similar circumstances. This discretionary authority is specifically granted to HTS by Sponsor, as specified in the Agreement (see also, Item 4 above). Voting Client Securities HTS has no authority or responsibility to vote any security held by the Plan or the related proxies. The Sponsor or trustee of the Plan reserves that authority. Services, Fees, and Compensation HTS sponsors a number of Programs that are designed to help clients meet their investment objectives and goals. The accounts managed by HTS are generally not intended to provide the client with a complete investment program, as HTS expects that the assets it manages for clients do not represent the entire value of their investment portfolios. The service begins with a consultation between the client and their IAR to review their investment objectives, financial circumstances, and risk tolerance. The client will complete a Risk Tolerance Questionnaire (“RTQ”) to document the results of this assessment. After reviewing the results of the RTQ, the client’s IAR will recommend a specific advisory program. By reviewing the RTQ and recommending a specific advisory program, the IAR seeks to appropriately balance their clients’ financial objectives with their risk tolerance as part of an investment strategy. The client agrees to immediately notify their IAR of any changes in their financial situation, risk tolerance or investment objectives. In some cases, these Programs cost the client more or less than purchasing the services separately. The client should be aware that commissions or Program fees charged in some cases are higher than those otherwise available if they were to select a separate brokerage service and negotiate commissions in the absence of the extra advisory services provided. The fee schedules are subject to negotiation, depending upon a range of factors, including, but not limited to account values and overall range of advisory services provided. HTS’s fee schedules are subject to negotiation, depending upon a range of factors including, but not limited to, account values and overall range of services provided. Services provided as part of the wrap fee for advisory accounts include, but not limited to: • Access to an IAR for personal service and financial advice; • Review of suitability based on client provided information in advisory agreements, new account forms and client interviews; • Portfolio management services; • Quarterly and/or monthly account statements; • Performance reports available on demand; Page | 10  • Execution of client portfolio transactions; • Custodial services; • Advisory fee billing; If the client holds qualified accounts in the Programs such as IRA or other tax advantaged types, please note that the client must carefully monitor their contributions to prevent them from inadvertently exceeding federal limits. The Insurance Carrier will provide all statements and confirmations for the Destination Program. Tax and Impact Overlay Services Envestnet as overlay manager offers Tax Overlay and Impact Overlay services for an additional fee. The client must select the services. If selected by the client, Envestnet will provide Tax Overlay Services, Impact Overlay Services, or both, to an account or sleeve. Envestnet operates both services in accordance with their policies and procedures as described in the Envestnet 2A Disclosure Brochure. Tax Overlay Services seeks to consider tax implications that detract from the Client’s after-tax returns. The Tax Overlay Service looks to improve the after-tax return for the client while staying as consistent as possible with the risk/return characteristics provided by the model portfolios. Envestnet evaluates proposed trades in the account and determines if the activity will have an acceptable level of taxable impact to the client, based on the tax settings that Envestnet has been provided by the client through their IAR. The gains and losses realized with the trading of Strategies and/or Funds are considered as part of the Tax Overlay in the Program account. Certain Program strategies contain the ability to be managed as tax-efficient or tax-aware by the applicable Model Provider. If the client and their IAR have selected a tax-efficient or tax-aware strategy, the client should discuss with their IAR whether the Tax Overlay Service is appropriate in that circumstance. Neither HTS, the IAR nor Envestnet assures that tax liability will be reduced or that any indicated limits or mandates will be met. Neither HTS, the IAR nor Envestnet provide tax planning advice or services. Clients should discuss any question with or request further information from their IAR or tax consultant in using the Tax Overlay Service. Impact Overlay Services seek to reflect a client’s own personal values by excluding investments linked to companies that derive revenues from specific business areas or companies that participate in controversial business activities (e.g., negative environmental impacts, human rights violations, corruption). The end goal of the Impact Overlay Service is to align a portfolio with the personal values of the Client, while staying as consistent as possible with the risk/return characteristics provided in the model portfolios. A separate approval must be provided to use the Tax Overlay and Impact Overlay services. When choosing to use either or both services, the client should consider whether the additional fee, which will be charged on the full balance of the account, is justified by the benefit they receive from the services. The client may choose to terminate these services at any time. Advisory Accounts available through Envestnet Asset Management, Inc. HTS advisory programs and services are available through Envestnet Asset Management, Inc. (“Envestnet”), a non-affiliate Investment Adviser registered under the Investment Advisers Act, through its web-based platform. These services in part or whole apply to HTS’s Aviator, Co-Pilot, Passport Series Separately Managed Accounts (“SMA”), Momentum Pathways Unified Managed Account (“UMA”) and Gateway Fund Strategist Portfolio (“FSP”) and Compass UMA, Endeavor and the Navigator UMA Programs. The services from Envestnet include: • Providing access to a variety of Portfolio Managers, Model Providers and Fund Strategists (Investment Managers) strategies and risk-based asset allocation models available for HTS Programs. This may include the use of Hilltop Securities Portfolio Management (HTSPM) which is a proprietary Investment Advisory Manager operating under Hilltop Securities. • Portfolio trading • Providing billing for all HTS advisory Program accounts • Providing account reporting including but not limited to performance, realized/unrealized gains and losses, account holdings etc. • Account rebalancing • Accepting and acting on reasonable account restrictions Page | 11  IARs will collaborate with their clients to complete a Statement of Investment Selection (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with clients to provide recommendations regarding the appropriate asset allocation and underlying strategies to meet their objectives. The Clients are directing the investments and changes made to the Program portfolio and are ultimately responsible for the selection of the appropriate asset allocation and underlying Investment Managers strategies. HTS will provide the Client with investment advisory service through one or more of its IARs. HTS will: (i) assist the client with defining financial, risk and objective information; (ii) assist client with selection of the Investment Managers; and (iii) review and analyze the Client’s Program Account. Investment Managers and may receive from HTS, among other information, certain information from the SIS, which will include Client’s investment objective, risk tolerance and any Client imposed restrictions on management of Client’s Program Account(s). HTS also may provide Investment Managers with other information regarding the Client, including a copy of the agreement between HTS and the Client. HTS will provide relevant updated information to Investment Managers after receipt of such information from the Client. The Client understands and agrees the Investment Managers shall be retained by Envestnet pursuant to agreements between the Investment Manager. The Client understands that the forgoing Investment Managers (and any such appointed in the future) shall have full discretionary authority over the Program account. Investment Managers will manage the Client’s Program Account on the basis of the SIS, the Client’s financial situation and investment objectives and any reasonable restrictions imposed by the Client. Additional services can be provided based on the Program selected. Fees and additional services for each Program are listed below: Aviator and Co-Pilot Program Overview Aviator Program The HTS Aviator Program, a fee-based advisory program, offers an open architecture platform. This enables the IAR to develop a personalized investment strategy for their clients, manage their customized portfolios, and deliver ongoing investment advice. With Aviator, the IAR can construct a portfolio that consists of a wide assortment of investments including, but not limited to, individual securities, ETFs, mutual funds, and fixed- income positions. In the Aviator Program, the IAR manages the accounts on a discretionary and non- discretionary basis. Only IARs that have been approved to use the aviator Discretion Program may establish new accounts in the Program. All existing Aviator discretionary accounts will continue to be supported, and all policies and procedure detailed in this document will remain in force. The Aviator Program features include: • Customized portfolio and allocations • Account minimum is $30,000 or as accepted • On-demand performance reporting and other account reports • Trading is done on the Momentum back-office system Co-Pilot Program The HTS Co-Pilot Program, a fee-based advisory program, offers an Adviser-created model-based platform that requires the use of Envestnet to create a model portfolio within the client’s risk tolerance and assign that model to accounts. This enables the IAR to develop a personalized investment strategy for their clients, manage their customized portfolios, and deliver ongoing investment advice. With Co-Pilot, the IAR will construct a model portfolio that consists of a wide assortment of investments including, but not limited to, individual securities, ETFs, mutual funds, and fixed-income positions. In the Co-Pilot Program the IAR manages the accounts on either a discretionary or non-discretionary basis. For the accounts to be in the Discretionary Program the IAR must first be approved to participate in the program. Page | 12  The Co-Pilot Program features include: • Customized model portfolio and allocations • Account minimum is $30,000 or as accepted • On-demand performance reporting and other account reports • Trading is done on the Envestnet Platform for eligible Platform securities. In some cases, certain securities will not be traded via the Envestnet Platform. The use of margin in Aviator and Co-Pilot Discretion accounts is not allowed unless first approved by Wealth Management Supervision and ASG. Aviator/Co-Pilot - Methods of Analysis Each IAR has the independence to take the approach they believe is most appropriate when analyzing investment products and strategies for clients in the Aviator/Co-Pilot Program. There are several sources of information that HTS and/or IARs use as part of the investment analysis process. These sources include, but are not limited to: • Financial publications • Research materials prepared by third parties • Corporate rating services • SEC Filings (annual reports, prospectus, 10-K, etc.) • Company press releases • Regulatory and self-regulatory reports • Other public sources As a firm, HTS does not favor any specific method of analysis over another and therefore would not be considered to have one approach deemed to be a “significant strategy.” There are, however, a few common approaches that HTS or the IAR, use individually or collectively, while providing advice to clients. Please note that there is no investment strategy that will guarantee a profit or prevent loss. The following are some common strategies employed in the management of client accounts: • Dollar Cost Averaging (“DCA”): The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high. Periodic investment programs cannot guarantee a profit or protect against a loss in a declining market. Dollar Cost Averaging is a long-term strategy that involves continuous investing, regardless of fluctuating price levels, and, as a result, the client should consider the financial ability to continue to invest during periods of fluctuating price levels. • Asset Allocation: An investment strategy that aims to balance risk and reward by allocating assets among a variety of asset classes. At a high level, there are three main asset classes— equities (stocks), fixed income (bonds), and cash/cash equivalents—each of which has different risk and reward profiles/behaviors. Asset classes are often further divided into domestic and foreign investments, and equities are often divided into small, intermediate, and large capitalization. The general theory behind asset allocation is that each asset class will perform differently from the others in different market conditions. By diversifying a portfolio of investments among a wide range of asset classes, IARs seek to reduce the overall volatility and risk of a portfolio by avoiding overexposure to any one asset class during various market cycles. Asset allocation does not guarantee a profit or protect against loss. Technical Analysis (a.k.a. “Charting”): A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value. Instead, they use charts and other tools to identify patterns that can suggest future activity. When looking at individual equities, a person using technical analysis believes that performance of the stock, rather Page | 13  than performance of the company itself, has more to do with the company’s future stock price. It is important to understand that past performance does not guarantee future results. • Fundamental Analysis: A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial, and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security’s value, including macroeconomic factors (e.g., the overall economy and industry conditions) and company-specific factors (e.g., financial condition and management). The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security’s current price, with the aim of figuring out what sort of position to take with that security (underpriced = buy, overpriced = sell or short). This method of security analysis is considered to be the opposite of technical analysis. • Quantitative Analysis: An analysis technique that seeks to understand behavior by using complex mathematical and statistical modeling, measurement, and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically. Some believe that it can also be used to predict real-world events, such as changes in a share price. • Qualitative Analysis: Securities analysis that uses subjective judgment based on no quantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. This type of analysis technique is different from quantitative analysis, which focuses on numbers. The two techniques, however, are often used together. Aviator and Co-Pilot Program Fees Fees for the Aviator and Co-Pilot program are offered on a wrap fee basis, covering all of HTS’s execution, consulting and custodial services. The maximum Aviator/Co-Pilot program fee schedule, shown in the table below, is based on the total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire total account value in the determination of the fee. The fee does not cover the fees and expenses of any underlying exchange traded funds (“ETFs”), closed-end funds, mutual funds, unit investment trusts or exchange traded notes (“ETNs”). The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis, and is billed in advance. The clients’ program fee will not be adjusted for no or low trading activity. Total Account Value Maximum Annualized Fee for Individual Securities Accounts Up to $249,999 $250,000 – $499,999 $500,000 – $999,999 $1,000,000 and over 2.25% 2.00% 1.75% 1.50% Maximum Annualized Fee for Mutual Fund/ETF/UIT Only Accounts 1.75% 1.50% 1.25% 1.00% If the client should make any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date they deposit the additional assets, or the client will receive a pro-rated adjustment or refund of any prepaid fee as of the date of withdrawal. Cash/Money Market and Securities Concentrations Advisory Programs are not appropriate for clients who want to maintain a high level of cash and/or highly concentrated positions that will not be sold regardless of market conditions. If the client continues to hold high level of cash/money market and/or highly concentrated positions, and the client does so against recommendations of HTS and with the understanding that the value of those securities will be included for the purposes of calculating the Program fee, resulting in a higher fee to HTS. Clients may hold excess cash or concentrated positions in a brokerage account without incurring the Advisory Program Fee. If the account continues to be outside of the cash and concentration guidelines over a specified period of time, then the account will be subject to removal from the Program. Page | 14  Unsolicited Transactions The advice and counsel of the Clients IAR is a critical service of the Aviator/Co-Pilot Programs. Solicited transactions will be made based on the recommendations that the IAR makes to the client. Unsolicited transactions are made when the Client directs the trades without advice or counsel from their IAR. The IAR assumes no responsibility for unsolicited trades, as these transactions are directed by the client absent of advice from their IAR. An unsolicited trading pattern may indicate that the Account is no longer appropriate for a client as they are not leveraging the advice of the IAR. In these situations, HTS has the right to terminate account from the Program. After the client has executed an unsolicited transaction without the advice of the IAR HTS’s, for so long as they hold that position in their Aviator/Co- Pilot Account, HTS will take that asset into consideration: • As part of the overall account assets, • When HTS provides the client periodic asset allocation advice, • When HTS values the client’s account holdings, • When HTS provides analyses and reports on the account’s performance, and • We can also make recommendations to consider selling the asset, when deemed appropriate by HTS HTS will include any holding that is acquired in an unsolicited transaction as part of the clients account assets for calculating their advisory fee on the last business day of each calendar quarter. Holdings that remain in the account will continue to be part of each fee cycle calculation until the holding is transferred or liquidated. Inactive Accounts Aviator/Co-Pilot Program accounts are reviewed on a quarterly basis for trading inactivity for accounts that have been in the Program for over 12 months. If the clients’ accounts have had zero trades for the trailing 12 months, their IAR will be notified of the inactivity and if the account does not have trading activity by the end of the next quarter review, the account will be subject to conversion to a brokerage account due to the continued inactivity. The reinvestment of Dividends and Capital Gains are not considered trades for this purpose. Mutual Fund Investments available through HTS The client should be aware that only those mutual fund companies with which HTS has a selling agreement will be available for purchase within a Program account, and may include those fund companies that provide HTS marketing service and support fees, which compensate HTS for marketing efforts to its clients concerning the mutual funds, as well as for shareholder servicing activities (such as order-taking, responding to customer inquiries, providing confirms, statements, prospectuses and issuer communications) that the mutual funds otherwise would have to provide to customers themselves, and are revenues to HTS in addition to the advisory fee revenue HTS receives from customers. These fees generally range from 0% to .31% (thirty-one, one hundredths of one percent) on HTS customer assets invested with those mutual fund companies, and when aggregated may be a material revenue source for HTS. As a result, not all mutual funds available to the investing public will be available for investment. However, HTS has selling agreements with over three hundred fund companies. The client should be aware that mutual funds contain internal expenses which are apart from and in addition to Program account fees and which are described in the respective funds’ prospectuses. Certain funds offered in the Program, while not having sales charges or having sales charges waived, assess distribution fees, such as those assessed pursuant to SEC Rule 12b-1 of the Investment Company Act of 1940, as amended (“12b-1 Fees”) which are paid to HTS. To the extent that HTS receives 12b-1 shareholder servicing fees in any Managed Accounts, they will be rebated to clients. The respective mutual fund prospectuses provide detailed information about such fees. Eligibility for various share classes offered by mutual funds to be used as part of the Advisory Services Group (“ASG”) Programs, is determined by the mutual fund company and disclosed in the fund’s prospectus. Rule 12b-1 fees will be rebated to client accounts as they are received. Use of a more costly share class will reduce the performance of a client’s account. Any recommendation to use a more costly share class when a lower cost share class of the same fund is available is a conflict of interest. HTS mitigates this conflict in that advisors do not have an incentive to recommend or select share classes that have higher expense ratios because their Page | 15  compensation is not affected by the share class selected. Shareholders considering transferring mutual fund shares to or from HTS should be aware that if the firm from or to which the shares are to be transferred does not have a selling agreement with the fund company, the shareholder must either redeem the shares (potentially incurring a tax liability) or continue to maintain an investment account at the firm where the fund shares are currently being held. Clients should inquire as to the transferability, or “portability,” of mutual fund shares prior to initiating such a transfer. Upon termination of their Managed account, Clients would generally be permitted to continue holding the institutional class of the fund but will be unable to make additional investments. Mutual Funds Assessed / Subject to 12B-1 Fees or Sales Charges HTS will convert existing advisory fee-eligible mutual fund positions in the Aviator, Co-Pilot; and Navigator UMA Program accounts to a specific mutual fund share class (“wrap recommended share class”) in an effort to provide advisory clients with lowest cost share class available through HTS. The Firm will perform ongoing quarterly maintenance conversions to ensure the wrap recommended share class has been selected for the client’s account. These share class conversions are non-taxable events, and clients’ cost basis will carry over to the new wrap recommended share class. Passport Series SMA/Momentum Pathways UMA The Passport Series SMA and Momentum Pathways UMA are discretionary investment advisory programs sponsored by HTS (“Sponsor”), available through it IARs that provides the client access to a broad selection of Separately Managed Accounts (“SMAs”) and Unified Managed Account strategies (“UMAs”). Passport Series and Momentum Pathways are made available with Envestnet Asset Management, Inc. (“Envestnet”), a non-affiliate Investment Adviser registered under the Investment Advisers Act, through its web-based platform. As manager of the web-based platform, Envestnet has entered into a sub-management agreement with Investment Managers to manage various types of portfolios offered through the platform and to develop model portfolios and research that is made available to Sponsor, IARs and IAR clients. For certain Investment Managers, Envestnet has entered into a licensing agreement with the manager, whereby Envestnet performs administrative and/or trading duties pursuant to the direction of the Investment Manager. In such situations the Investment Manager is acting in the role of “Model Provider.” The Investment Managers are responsible for all investment selections made for the portfolios they create. It is up to the client to select a third-party model portfolio. Unless Envestnet affirmatively cites the Investment Manager as “approved” as described below in Methods of Analysis section, Envestnet does not collect and report data on investment style and philosophy, past performance, and personnel of Investment Managers. IARs will collaborate with their clients to complete a Statement of Investment Selection (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with their clients to provide recommendations regarding the appropriate asset allocation and underlying strategies to meet their objectives, but clients are directing the investments and changes made to the Program portfolio and are ultimately responsible for the selection of the appropriate asset allocation and underlying Investment Managers strategies. The Passport Series SMA Program is a discretionary Program where; the client is offered access to actively managed investment portfolios managed by Investment Managers. Unlike a mutual fund, where funds are comingled, a separately managed account is a portfolio of individually owned securities that can be tailored to fit the stated investing preferences. IARs will work with the client to complete a Statement of Investment Selection (“SIS”) which includes a Risk Tolerance Questionnaire. The purpose of this statement is to establish an understanding between the client, HTS, and Envestnet regarding the investment objectives, goals, and guidelines for the Investment Management account. This will also assist the client with the selection of the Investment Manager(s). The Investment Managers who are selected for these Programs employ different methods of analysis that are described in each managers’ disclosure brochure. The HTSPM strategies are available along with the other unaffiliated Investment Managers. The Momentum Pathways UMA program is a discretionary program where Clients are offered access to combine a broad selection of Investment Managers as well as ASG Programs, including a Co-Pilot account, over which their IAR may exercise limited trading discretion in a single portfolio. The IAR will provide the Page | 16  client with recommendations regarding the appropriate asset allocation and underlying investment vehicles or investment strategies to meet their objectives, but the client is making the selection of the Investment Managers and changes made to the UMA portfolio and are ultimately responsible for the selection of the appropriate asset allocation and underlying investment strategies. Envestnet provides overlay management services for UMA accounts and implements trade orders based on the directions of the investment strategies contained in the UMA portfolio. The clients’ IAR will assist in creating a customized portfolio, providing the client with recommendations regarding the asset allocation and underlying investment strategies. The client shall select the asset allocation and the investment strategies. The asset managers who are selected for this Program employ different methods of analysis that are described in each manager’s Disclosure Brochure. In addition, to the extent that other investment vehicles are utilized in the portfolio such as mutual funds or ETFs, the client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the company associated with the investment. The HTSPM strategies are available along with the other unaffiliated Investment Managers and Model Providers. HTS reserves the right to remove any Investment Manager from the Passport Series and Momentum Pathways Programs without prior notice to the Client. Factors involved in HTS’s decision to remove any Investment Manager include failure to adhere to a management style or the Client objectives, a material change in the adviser’s professional staff, unexplained poor performance, dispersions of the account performance, or HTS’s decision to no longer include the Investment Manager on the roster. HTS will determine whether any or all of these factors are material when deciding whether to recommend termination. The Client can elect to remove an Investment Manager from their account at any time. Information HTS collects regarding any Investment Manager is believed to be reliable and accurate, but HTS does not necessarily independently review or verify it on all occasions. While performance results are generally reported to HTS, HTS does not audit or verify that these results are calculated on a uniform or consistent basis as provided to HTS. HTS also provides the client with monitoring and on demand reporting of portfolio performance on a periodic basis for the Passport Series and Momentum Pathways Program accounts. As described above, the client may select the Tax Overlay Service within this program which will incur an additional cost to the client. Additionally, as described above, the client may select the Impact Overlay Service within this program which will incur an additional cost to the client. Passport Series and Momentum Pathways Program Fees These programs charge an annual fee, out of which HTS pays for all portfolio management and administration, including Envestnet, Investment Manager Fees, and fees payable to the Sponsor, and Sponsors IARs, as well as costs for transaction execution, clearing, custody and reporting. The Investment Manager’s fee will generally fall within a range of 0.15% to 0.75% (annual rate) of assets under management. The fee payable to HTS, as the Sponsor, will generally fall within a range of 0.10% to 0.38% (annual rate) of assets under management. The program fee will not be adjusted if the manager trades away from HTS. The level of fee will vary with the amount of assets under advisement in the programs and the particular investment styles and investment options chosen or recommended. Clients could receive comparable services from other sources for fees that are lower than those charged by HTS. The maximum fee schedule for the Passport Series and Momentum Pathways Program services is set forth below and is negotiable in individual cases: Total Account Value Maximum Annualized Fee for UMA account First $ 250,000 Next $ 250,000 Next $ 500,000 Next $ 4,000,000 Over $ 5,000,000 Maximum Annualized Fee for Equity/Balanced SMA Portfolios 2.90 – 3.00% 2.40 – 2.50% 2.15 – 2.25% 1.90 – 2.00% 1.75 – 1.85% Maximum Annualized Fee for Fixed Income SMA Portfolios 1.55 – 1.65% 1.40 – 1.50% 1.25 – 1.35% 1.05 – 1.15% 0.90 – 1.00% 2.35% 2.30% 2.10% 1.90% 1.70% Page | 17  * The total fee charged to Clients’ accounts will vary depending upon the selection of Investment Managers and allocation of total portfolio assets thereto, the total amount of portfolio assets in the Program and other factors. Additions and Withdrawals from a Passport Series or Momentum Pathways Account If the client makes any deposit or withdrawal of $10,000 or more during a fee period, the client will be debited or credited a pro-rated fee on the market value of the assets deposited or withdrawn. The pro-rated amount will be due and charged to the account on the date the client deposits the additional assets, or the client will receive a pro-rated adjustment of refund of any prepaid fee as of the date of the withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Hilltop Securities Portfolio Management (HTSPM) Types of Services Provided by Hilltop Securities, Inc. as Portfolio Manager In addition to offering advisory services through our Wrap Fee program described above, HTS makes available certain separately managed accounts (SMA) offered through Hilltop Securities Portfolio Management (HTSPM). HTSPM is proprietary investment advisory service operating under Hilltop Securities, Inc., a registered investment adviser and registered broker dealer. HTSPM provides discretionary investment advisory services and offers several fixed income strategies available in the Passport Series SMA and Momentum Pathways UMA Programs (Program) to individuals, high net worth individuals, families, trusts, estates, corporate and non-corporate entities, retirement plans, pension plans, profit-sharing plans, and government entities. HTSPM strategies may also be available to non-affiliated Correspondent firms who have access through the Envestnet Platform. The availability of the strategies for their firms is at the sole discretion of the Correspondent firm for their IAR and Client use. HTSPM acts as Sub-Advisor to HTS registered Investment Adviser Representatives (IAR), where the IAR selects one or more of HTSPM’s fixed income strategies for their client’s program account based on the Statement of Investment Selection (SIS). HTS relies on such strategy selection by the client’s IAR, and the information captured in the SIS. HTSPM will begin providing investment advisory services to clients upon the creation of the Program Account, completion of the SIS as accepted by HTS and Envestnet Asset Management, in accordance with the fixed income strategy selected, and any applicable restrictions of the Client. Our investment advisory services may be terminated by either party in accordance with any applicable contractual notice provision. Minimum Investment The minimum initial investment for an account managed by HTSPM is $125,000, which may be waived at HTS and HTSPMs sole discretion. Level of Service Offered by HTSPM HTSPM manages its investment advisory accounts in accordance with HTS fixed income strategies. HTSPM permits the Client to identify reasonable restrictions on the Client’s Program account. However, such restrictions may have a significant impact on the timing of Client’s strategy implementation, yield, diversification, and account performance. HTS and HTSPM, may decline all or some of the Client’s restrictions. HTSPM Fees and Compensation HTSPM receives a management fee based on a percentage of assets under management for providing investment advisory services to the accounts in the Program. HTSPM does not charge performance-based fees on Program Accounts. These HTSPM fees will be detailed and incorporated on the Client’s SIS and included in the Annual Fee that the Client is charged HTS. Other Compensation HTSPM does not charge commissions, markups, or mark-downs to the Client’s participating in the Program. HTSPM Methods of Analysis HTSPM makes available several fixed income strategies in the Passport Series SMA and Momentum Pathways UMA Programs that primarily invest in tax-free municipal bonds. HTSPM considers many factors in analyzing and constructing fixed income portfolios. These include, but are not limited to maturity, coupon, ratings, sector, Page | 18  duration, callability, yield, spread to various benchmarks, and liquidity. HTSPM Short Municipal Ladder The investment objective is to generate tax-efficient income consistent with low principal volatility through investment in short maturity fixed income securities. The strategy invests primarily in tax-exempt municipal bonds with a maximum maturity of 5 years with an objective of approximately equal maturity amounts each year. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after- tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Short Municipal Ladder Strategy: National and California. HTSPM Short-Intermediate Municipal The investment objective is to generate tax-efficient income consistent with low principal volatility through investment in short to intermediate fixed income securities. The strategy invests primarily in tax-exempt municipal bonds with a maximum maturity of 10 years with an objective of approximately equal maturity amounts each year. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after- tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Short-Intermediate Municipal Ladder Strategy: National and California. HTSPM Intermediate Municipal Ladder The investment objective is to maximize tax-efficient income consistent with limited principal through investment in intermediate fixed income securities. The strategy invests primarily in tax- exempt municipal bonds with a maximum maturity of 17 years with an objective of approximately equal maturity amounts spread across the investment horizon. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after- tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Intermediate Municipal Ladder Strategy: National and California. HTSPM Full Curve Municipal The investment objective is to maximize tax-efficient income through investment in fixed income securities across the entire maturity spectrum. The strategy invests primarily in tax-exempt municipal bonds with a maximum maturity of 30 years, an objective of approximately equal maturity amounts spread across the investment horizon. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after- tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Full Curve Municipal Ladder Strategy: National and California. HTSPM Flexible Maturity Strategy The investment objective is to establish a high-quality municipal bond strategy for Clients who have a flexible maturity profile. HTSPM will not impose a maturity structure onto accounts within the strategy. HTSPM will consult with the IAR and the Client to create maturity parameters. The strategy will remain consistent with the HTSPM Municipal Ladders Strategies, which emphasize high credit quality and disciplined risk management through strong multifactor diversification. The agreed upon custom maturity parameters will be documented in Page | 19  the HTSPM Account Customization form. Neither HTSPM, HTS, nor their IARs provide tax or legal advice. Each Client’s tax or financial situation is different, and the Client is advised to consult with their tax or legal advisor for advice and information specific to their individual situation. HTSPM Portfolio Risks Fixed Income Securities Risks: Portfolios will invest in a variety of fixed income securities. Fixed income securities are subject to a number of risks including credit risk, interest rate risk, and liquidity risk. • • Credit risk is the risk the issuer or guarantor of a debt security will be unable or unwilling to make timely payments of interest or principal or to otherwise honor its obligations. Interest rate risk is the risk of losses due to changes in interest rates. In general, the prices of debt securities rise when interest rates fall, and the prices fall when interest rates rise. • Liquidity risk is the risk that a particular security may be difficult to purchase or sell and that an investor may be unable to sell illiquid securities at an advantageous time or price. Duration measures the change in the price of a fixed income security based on the increase or decrease in overall interest rates. Bonds with higher duration generally carry more risks and have higher price volatility than bonds with lower duration. Therefore, if interest rates are low at the time of purchase of the bonds, when interest rates eventually do rise, the price of such lower interest rate bonds will decrease, and anyone needing to sell such bonds at that time, rather than holding them to maturity, could realize a loss. It should be noted that HTSPM does not explicitly forecast interest rates. Municipal bonds may also have a call feature, entitling the issuer to redeem the bond prior to maturity. A callable security’s duration, or sensitivity to interest rate changes, decreases when rates fall and increases when rates rise because issuers are likely to call the bond only if the rates are low. Investors in callable bonds are therefore subject to reinvestment risk – that is, the risk that they will need to reinvest their proceeds at lower rates. Municipal bonds are also subject to state-specific risks, such as changes in the issuing state’s credit rating, as well as the risk that legislative changes may affect the tax status of such bonds. Tax-Exempt Securities Risks: Portfolios may also invest in tax-exempt municipal bonds. In order to pay interest that is exempt from federal or state and local income tax, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed to bond holders to be taxable. In addition, income from one or more municipal bonds held in a Portfolio could be declared taxable because of unfavorable changes in tax or other laws, adverse interpretations by the Internal Revenue Service (IRS), state, or other tax authorities, or noncompliant conduct of a bond issuer. Changes or proposed changes in federal or state income tax or other laws may also cause the prices of tax-exempt securities to fall. Finally, income from certain municipal bonds may be subject to the alternative minimum tax (AMT) and/or state and local taxes, based on the investor’s state of residence. Municipal Securities Risks: Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions (as discussed under Tax- Exempt Securities Risk above), and by uncertainties and public perceptions concerning these and other factors. In recent periods, an increasing number of municipal issuers in the United States have defaulted on obligations and commenced insolvency proceedings. Financial difficulties of municipal issuers may continue or get worse. The potential tax benefits of a tax free or tax deferred investment are eliminated if the investment is made in a qualified plan, such as a 401(k) or IRA. Investing Side by Side with Clients HTSPM Portfolio Managers and its support personnel are not permitted to trade in the same fixed income securities as those that HTSPM manages for investment advisory clients in the Program. Page | 20  Brokerage Practices & Best Execution Factors in Brokerage Selection HTSPM has the authority to select brokers for the execution of transactions in customer accounts in accordance with our obligation to seek “best execution” (i.e., seeking the most favorable overall price and execution under the circumstances existing at the time of the transaction). HTSPM selects brokers based on both quantitative and qualitative factors, firm size, underwriting activity, and inventory/trading considerations – as well as any other factors deemed appropriate. Transactions with brokers are also subject to periodic random sampling for review, to confirm that HTSPM is receiving services that are competitive and consistent with other transactions in the market. HTSPM has discretion to select broker-dealers to execute trades for client accounts. However, HTSPM will not transact securities transactions with Hilltop Securities, Inc. or its affiliate, Momentum Independent Network, Inc. Best Execution In placing orders for the purchase and sale of securities and directing brokerage to affect these transactions, HTSPM’s primary objective is to seek prompt execution of orders at the most favorable prices reasonably obtainable. HTSPM’s participation in the Passport Series and Momentum Pathways Programs have discretion and will direct trades to be executed by broker- dealers other than HTS. In some instances, these trades are executed by the other firms without any additional commission or markup or markdown, but in other instances, the executing firm imposes a commission or a markup on the trade. For certain trades in a client’s account with a broker-dealer where the broker-dealer imposes a commission or equivalent fee on the trade (including a commission embedded in the price of the investment), the client will incur trading costs in addition to the Advisory Fee. HTSPM is a party to the trades and may be in a position to negotiate the price or transaction- related cost(s) with the broker, dealer or bank selected by HTSPM for these trades. A Client’s trade order so executed is then cleared and settled through HTS. In seeking best execution, HTSPM is not obligated to choose the broker-dealer offering the lowest available price in all instances if, in our reasonable judgment, (i) we believe the total costs or proceeds from the transaction might be less favorable than could be obtained elsewhere or (ii) other considerations, such as the order size, the time required for execution, the depth and breadth of the market for the security, minimum credit quality requirements to transact business with a particular broker-dealer, or the quality of the broker-dealers back office or other considerations support our decision to use a different broker-dealer. Securities transactions in Client accounts participating in the HTS Programs are generally affected on a "net" basis (i.e., without commissions), and a portion of the fee is generally paid for advisory services provided. Clients will generally pay an asset-based fee for the brokerage/custody/clearing services provided by HTS as the broker/custodian (as opposed to transaction-based fees such as commissions), and those fees are generally included in the Program Fee for a Client. Research and Soft Dollar Arrangements: HTSPM does not utilize soft dollar arrangements. Therefore, HTSPM does not have an incentive to select or recommend a broker-dealer based on our interest in receiving research services or other soft dollar arrangements. Directed Brokerage: HTSPM has discretion to select broker-dealers to execute trades for clients’ accounts. However, HTSPM does not permit Investment Advisory Clients to direct securities transactions to particular brokers or dealers. If we select a broker-dealer to execute a trade, the Client will typically be responsible for any execution costs charged by that other broker-dealer in addition to the wrap fee paid to HTS. HTSPM manages client portfolios as a fiduciary on a fully discretionary basis on behalf of its clients. As a fiduciary, HTSPM owes each client a duty of loyalty and care with respect to client transactions. Trading and Allocation As a fiduciary to each Client, HTSPM owes each Client the same duty of loyalty. Consistent with this duty, Page | 21  HTSPM does not give one Client or a group of Clients preference over others. This is particularly true when HTSPM trades the same security for several Client accounts. HTSPM has developed appropriate, predetermined allocation procedures so as to minimize the risk that any particular Client would be systematically advantaged or disadvantaged by the aggregation or allocation of orders and to promote fairness and equity for all Clients. HTSPM portfolio managers have the responsibility of implementing all investment decisions in a manner most advantageous to Clients. Technological and operational systems assist in making the execution process more efficient. Each investment decision and the resulting securities transactions must be treated as a dynamic and unique occurrence. Where HTSPM has full discretion, fixed income trades are executed on a net basis. Bids and offers are gathered from competing firms and are executed when the levels offered are in-line with HTSPMs expectations. Aggregation of the Purchases and/or Sale of Securities for Program Assets: HTSPM will often aggregate accounts into block trades, both purchases and sales, in order to gain more advantageous pricing for Clients and to ensure a consistent execution process across portfolios. In order to ensure transactions are fair, equitable and allocated without preference, HTSPM uses functionality within its portfolio management software to prioritize and allocate securities. This functionality utilizes both quantitative and qualitative factors, the most common of which are: maturity, coupon, callability status and date, ratings, state of domicile of both the security and the account(s), duration, sector, percent of uninvested cash available in the account, age of uninvested cash in the account, and degree to which a trade moves an account towards greater conformity with portfolio strategy parameters. The goal of this approach is to ensure that all clients are treated fairly and equitably. Purchase Allocation Procedures: HTSPM allocates across client portfolios by prioritizing based on multiple factors including maturity, coupon, rating, call factors, state of domicile of the security and the account, duration, sector, percent of uninvested cash in each account, the age of uninvested cash in each account, and the degree to which a trade moves an account towards greater conformity with management strategy Parameters. In most cases, trades are allocated on a pro-rata basis. In certain circumstances, the Portfolio Manager may choose to allocate securities on other portfolio level factors. In those cases, the Portfolio Manager will document the reasoning for allocating on a different basis and will retain documentation of the rationale for the trade within the portfolio management software. Selling Allocation Procedures for All HTSPM Strategies: Most sales are account-specific and are related to client liquidity needs within a particular account. In cases where accounts are aggregated into a block sale, the accounts will be chosen in advance and the block will generally be sold in its entirety. In rare instances, there may be a partial sale of a block resulting in some portion of securities not being sold. In those cases, the preferred allocation method will be a pro rata allocation. In some instances, there may be adjustments made to that pro rata allocation, including account(s) that were included in the block due to specified liquidity needs, the size remaining in an account after the trade which will impact liquidity of the remaining position, and other factors. In some cases, the portfolio manager may choose to allocate based on other portfolio-level factors, taking into account the rationale for the trade, amount of cash in the portfolio(s) pre- and post-trade, and which accounts will be moved towards greater conformity with strategy guidelines. In all cases, when a trade is allocated on anything other than a pro rata basis, the rationale and supporting documentation will be retained. Pre-Allocated Trades: In certain trades, a portfolio manager may create a block order for bonds that may get only partially filled. In those cases, accounts will not receive the full allocation desired. The resulting smaller allocation will usually be done using the following methods: 1) pro rata allocations, with possible adjustments due to minimum block sizes and other considerations or 2) re-running the allocation process based on one of the allocation rules that prioritizes accounts according to need. The portfolio manager will retain documentation about which method and allocation rules were used. Page | 22  Trade Errors HTSPM has a fiduciary obligation to handle portfolio management and trading decisions in an accurate manner. In the event of a trade error, HTSPM will make all reasonable efforts to promptly correct the trade error. This may include canceling the trade, adjusting an allocation, and reimbursing the account. HTSPM Review of Accounts Periodic Review of Client Accounts: Client accounts are reviewed periodically in several ways. On a monthly basis, all accounts are screened in order to determine conformity with strategy and account-specific guidelines. On an annual basis, each account is reviewed more formally to confirm account guidelines, review drift from strategy targets and determine what steps, if any, are needed to mitigate. Custody All Client Program assets will be custodied with Hilltop Securities, Inc. as qualified custodian. Investment Discretion HTSPM manages fixed income Separately Managed Accounts (SMAs) on a discretionary basis for retail clients. The portfolios consist primarily of tax-exempt municipal bonds, but also may include US Treasury, Agency, and taxable municipal bonds. HTSPM manages the client portfolio in accordance with the strategy and objectives of the selected product, subject to any specific customization requested by the advisor. Voting Client Securities HTSPM does not vote or submit proxies for client accounts. Conflicts of Interest As a diversified, full-service financial services firm that engages in a wide array of activities including investment advisory services, investment management activities, investment banking, and other activities, Clients should be aware that there will be occasions when Hilltop Securities encounters potential and actual conflicts of interest in connection with its investment management services. We have adopted internal policies and procedures reasonably designed to identify and address these types of conflicts to the fullest extent possible. Since HTSPM is a proprietary investment advisory service operating under Hilltop Securities, Inc., we have a conflict of interest when HTS IARs recommend HTSPM versus a nonaffiliated third- party manager. Any Product Fee received by HTSPM is attributable to HTS and its profitability, which can impact the compensation of HTS employees. Moreover, our IARs may develop close personal relationships with employees and associated persons of HTSPM and, as a result, may be inclined to recommend HTSPM over a third-party manager. To mitigate this conflict, HTS does not additionally pay our IARs on the basis of recommendations of HTSPM or other affiliated products. To further mitigate this conflict, the fee charged to Clients utilizing and HTSPM strategy in the Program will be similar or the same as like third party managers, (i.e., Product Fees to utilize the services and/or Portfolios of HTSPM is comparable to Product Fees associated with third party managers). On occasion, HTSPM strategies may invest clients in bonds where HTS acted as an underwriter in the initial bond offering. In those instances, HTSPM strategies are prohibited from purchasing bonds in the primary market and only allowed to purchase in the secondary market in an agency capacity with no additional mark- up or commission. Gateway FSP – Fund Strategist Portfolios The Gateway Fund Strategist Portfolios (“FSP”) program is an investment advisory program sponsored by HTS (“Sponsor”) that provides the client access to a selection of Fund Strategist Portfolios (“FSP”) managed on a discretionary basis. The Program will provide adviser’s access to investment strategists who construct distinct portfolio solutions to help meet the ever-increasing demands of today’s investors. They typically comprise a set of mutual funds and/or exchange- traded funds (ETFs). Gateway FSP solutions espouse various approaches to portfolio construction and asset allocation, whereas most Gateway FSP portfolios employ a long-term, strategic asset allocation approach, others take a dynamic or tactical approach and actively shift allocations in order to take advantage of short-term market movements (these approaches are referred to below as the “Strategy” or “Strategies”). The clients IAR will assist in selecting one or more FSPs from a roster based on the client’s financial situation, investment objectives and risk tolerance. HTS also provides the client with monitoring and Page | 23  reporting of portfolio performance on an on-demand basis. IARs will collaborate with their clients to complete a Statement of Investment Selection (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with Clients to provide recommendations regarding the appropriate asset allocation and underlying strategies to meet their objectives. The clients are directing the investments and changes made to the Program portfolio and are ultimately responsible for the selection the appropriate asset allocation and underlying Fund Strategist Portfolios. For each model portfolio, the FSP determines the Strategy, including the underlying mutual funds or ETF’s to be used for each Strategy, the allocation of assets, and the investment advisory firms (“Money Managers”) responsible for managing the assets. The FSP will make changes to their underlying Strategies; and periodically can change the Money Managers for the portfolio and/or the allocation of assets to the various Money Managers. At HTS’s discretion, HTS will implement the changes proposed by the FSP. Fund–selected Investment Managers are terminated or replaced by the FSP generally due to changes in senior investment personnel and/or a deviation from the desired investment discipline. Such changes to fund investments are made without prior notice to the client. HTS reserves the right to remove any FSP from the Gateway FSP program without prior notice to the client. Factors involved in HTS’s decision to remove an FSP include failure to adhere to a management style or the client objectives, a material change in the adviser’s professional staff, unexplained poor performance, dispersions of the account performance, or HTS’s decision to no longer include the FSP on the roster. HTS will determine whether any or all of these factors are material when deciding whether to recommend termination. The client can elect to remove an FSP from their account at any time. Information HTS collects regarding any FSP, mutual funds, or ETFs is believed to be reliable and accurate, but HTS does not independently review or verify it on all occasions. While performance results are generally reported to HTS, HTS does not audit or verify that these results are calculated on a uniform or consistent basis. HTS also provides the Client with monitoring and on demand reporting of portfolio performance on a periodic basis for Gateway FSP Program accounts. As described above, the Client may select the Tax Overlay Service within this Program which will incur an additional cost to the Client. Additionally, as described above, the Client may select the Impact Overlay Service within this Program which will incur an additional cost to the Client. Passport Series/Momentum Pathways/Gateway FSP - Methods of Analysis HTS relies on Envestnet for analysis, information, asset allocation strategies and the identification selection, and monitoring of Investment Managers. Envestnet is responsible for the selection of Investment Managers offered on the Passport Series/Momentum Pathways/Gateway FSP platforms. Envestnet seeks Investment Managers with a variety of investment strategies available. Some strategies are higher-risk strategies and such strategies are not intended for all clients. Clients who choose to follow higher-risk strategies should know that there is a possibility of significant loss. Please review Envestnet’s and the Investment Managers Form ADV Part 2A for more information about its advisory business. Investment Managers offered by Envestnet are considered “Approved” or “Available,” depending on the level of due diligence performed. “Approved Investment Managers” are evaluated using data and information from several sources, including independent databases. Among the types of information analyzed are historical performance and volatility, and qualitative factors such as the Approved Envestnet Manager/Strategist and investment vehicle’s reputation and approach to investing. Envestnet also reviews the Investment Manager Form ADV Part 2A and portfolio holding reports. To ensure accuracy, Envestnet attempts to verify all information by comparing it to publicly available sources. In addition to Approved Investment Managers, Envestnet also makes available certain Investment Managers/Strategist for which Envestnet has not performed due diligence. These Investment Managers are categorized as “Available Investment Managers” and Envestnet makes no recommendations concerning Available Investment Managers. The client’s IAR will recommend and perform their own research on Investment Managers and investment vehicles that it believes are most appropriate for the client’s individual circumstances. Page | 24  Envestnet uses a quantitative process that measures risk and return for each portfolio versus its investment style peers via a ranking methodology. This ranking methodology is updated each quarter for all Investment Managers. The result of this review can result in the risk score being changed to a higher or lower risk. Envestnet notifies HTS of these reviews. The client and the client’s adviser should review this information, and in certain cases where the risk score materially changes, updated paperwork may be required. Before an Investment Manager is made available for the Passport Series/Momentum Pathways/Gateway FSP program, general research is conducted by HTS to determine eligibility. This includes, among other things, assets under management, inception date of strategy, manager tenure, investment style and performance factors. HTS also reviews investment philosophy and process, trading practices, fundamental and quantitative statistics of the strategy. In some cases, HTS may also conduct interviews with portfolio managers, principals, and key staff members. HTS conducts annual review of Investment Managers. This review is based on applicable information gathered from various sources that include, but are not limited to, disclosure documents, performance, assets under management and other applicable criteria. As a result of these reviews, HTS can request that Envestnet take corrective action to address such concerns. From time to time, these reviews also result in the removal of an Investment Manager being available to HTS clients. For additional information, please refer to the Investment Managers and/or Envestnet Asset Management’s disclosure brochures. Gateway FSP Program Fees Fees for the Gateway FSP program are offered on a wrap fee basis, covering execution, consulting, and custodial service as well as fees for services for each Investment FSP. Additional fees may be charged by HTS for certain administrative actions such as wire transfers. The maximum Gateway FSP fee schedule, shown in the table below, is based on total account value (“Account Value”) and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire Account Value for the purposes of determining the fee rate. The fees do not cover the fees and expenses of any underlying investments used by the appointed Investment Manager. The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis and is billed in advance. HTS compensates FSPs from 0.15% to .60% annually based on total aggregate client dollars with each FSP. In some cases, the Investment Managers are compensated directly from the operating expenses of the underlying proprietary funds that are used in the portfolios. These FSPs are not compensated directly from HTS. The Firm has a conflict of interest to recommend selections of management styles and advisers that would result in a lower percentage of advisory fees. HTS intends, however, to make all recommendations independent of such fee consideration and based solely on HTS’s obligations to consider the clients objectives and needs. The fees are calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis and is billed in advance. A portion of any fees received by HTS will be paid to the IAR. HTS can keep between 0 to 100% of the fee and pay the remaining portion to the IAR as agreed upon with each IAR. This amount will vary depending on a number of factors including negotiated agreements, assets under management or other factors as determined by HTS. The fee schedule shown in the tables below, are based on Account Value and are negotiable. The fee schedule for Gateway FSP is not applied incrementally; the corresponding rate is applied to the entire Account Value in determining the fee. The fees do not cover the fees and expenses of any underlying ETFs, closed-end funds, mutual funds, UITs or exchange traded notes (“ETNs”) or fees for ancillary services such as wire transfers, returned checks, etc. nor does it cover all applicable exchange fees or option reporting fees. Program fees will not be adjusted for no or low trading. The maximum fee schedule for the Gateway FSP program services is set forth below, but is negotiable in individual cases: Page | 25  Total Account Value ETF/Equity/Balan Maximum Annualized Fee Fixed Income Portfolios Mutual Funds Up to $249,999 $250,000 – $499,999 $500,000 – $999,999 $1,000,000 and up ced Portfolios 3.00% 2.50% 2.00% 1.85% 1.65% 1.50% 1.35% 1.15% 1.75% 1.50% 1.25% 1.10% Additions and Withdrawals from a Gateway FSP Account If the client makes any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date of the deposit of the additional assets, or they will receive a pro- rated adjustment or refund of any prepaid fee as of the date of withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Compass UMA Program The Compass UMA Program (“Compass UMA Program” is a non-discretionary program that provides the client access to several risk- based asset allocation models. The IAR will provide the client with recommendations regarding the appropriate asset allocation and underlying investments of mutual funds and ETFs to meet the account objectives, but the client is making the final selection of the investment allocation model and underlying funds and changes made to the Compass UMA Program portfolio and are ultimately responsible for the selection of the appropriate risk-based asset allocation model and underlying investment funds. Envestnet provides overlay management services for UMA accounts and implements trade orders based on the semi-annual or annual rebalance discipline as well as transactions directed by the Client and their IAR. The Clients IAR will assist the Client in completing the SIS; create the asset allocation portfolio; and provide the client with recommendations regarding the risk-based asset allocation and underlying investments. The Client shall select the asset allocation and the investment strategies. The Client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the mutual funds and ETFs that the client has selected. Compass UMA Program - Methods of Analysis HTS maintains a list of mutual funds and ETFs eligible to participate in the Compass UMA Program. The client’s IAR will research and recommend funds from an eligible funds list for the client’s account based on the stated risk tolerance, risk-based asset allocation model selected and investment objectives. Each adviser has a different philosophy or criteria in the review and selection of investment products. Periodically the list is reviewed by HTS, and funds are removed, or new funds are added as deemed appropriate. For mutual funds that are no longer open to new and/or additional investments, Clients that maintain a position are permitted to continue to do so as deemed appropriate by the IARs of HTS. HTS makes available several Compass UMA risk-based asset allocation models that the client and the client’s IAR will choose from. The IAR will work with the client to determine a model, the underlying funds and select either the required semiannual or annual rebalancing. The Rebalancing Process Client will have the option to either have the account rebalanced semiannually or annually. Envestnet will review all Compass UMA Programs based on the client’s selection of semi-annual or annual rebalancing at inception of the account and identify accounts that have not been rebalanced. If an account has been determined to have any position outside of the drift tolerance set by HTS the account will be rebalanced. If an account has no positions outside of the drift tolerance no trades will be made and the rebalance clock will be reset. Trades will be done to maintain client’s target asset allocation among the mutual funds and/or ETFs. The client’s affirmative consent is not required to implement these changes. Rebalancing will be accomplished by selling Page | 26  the shares of the over-weighted fund(s) and purchasing a corresponding dollar amount of the appropriate underweighted fund(s). Adviser and client are free to direct a rebalance as they choose, but the account will be automatically reviewed and rebalanced at least on a semiannual, annual, or basis as selected by the client. When the account is rebalanced, the calendar is reset with a new semiannual or annual review now established. HTS reserves the right to change the drift tolerance as the model portfolios/accounts are reviewed for activity. A rebalance of the account will also take place when the client directs HTS to raise cash for a withdrawal or the client makes a deposit to the account that results in the cash balance being low or high. All deposits made to the account will be deemed eligible for immediate investment and the client will be responsible for any losses that may arise from a deposit in error. Envestnet as the overlay trading manager will be taking discretion when placing the trades directed by the client and their adviser as well as rebalancing the account either semi-annually or annually. Fund Changes Changes to the mutual funds and/or ETFs utilized for investment within the Compass UMA Program account will require the client’s prior consent. All such change requests received by Envestnet prior to 12:00 pm CST will be processed the same day on a best effort’s basis. Requests received by Envestnet after 12:00 pm CST will be processed by 12:00 pm CST the following trading day. Rebalancing or fund changes may result in tax consequences to the account holder including, but not limited to, the realization of capital gains, and/or losses regarding the sale of fund shares. Compass UMA Program Fees Fees for the Compass UMA Program are offered on a wrap fee basis, covering all of HTS’s execution, consulting, and custodial services. The maximum Compass UMA Program fee schedule, shown in the table below, is based on total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire account value for the purpose of determining the fee rate. The fees do not cover the fees and expenses of any underlying ETFs or mutual funds. The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is charged to the account each calendar quarter, on a pro-rated quarterly basis and is billed in advance. The Program fees will not be adjusted for no or low trading activity. Maximum Annualized Fee Schedule Maximum Fee Schedule for Compass UMA Program Amount Maximum Annual Fee $0 - $250,000 3.00% $250,000 - $500,000 2.50% $500,000 - $1,000,000 2.25% $1,000,000 - $4,000,000 2.00% Over $4,000,000 1.85% The client agrees and acknowledges that other fees may be assessed to client that are not part of the program fee. Other Fees include, but are not limited to, fees for portfolio transactions executed away from the Sponsor, dealer mark-ups, electronic fund and wire transfer fees, market maker spreads, exchange fees and broker/custodian fees. Client is further advised that mutual funds/ETFs charge their own fees for investing the pool of assets in the investment vehicle and such fees are apart from, and in addition to, the Program fee charged hereunder. Please see the prospectus or related disclosure document for information regarding those fees. Client acknowledges and understands that HTS and/or its affiliates may receive 12b-1 fees or other fees from the mutual funds in which client invests. The client can request to have two or more eligible Advisory accounts be treated as related accounts for purposes of taking their assets into consideration in order to calculate the Program fee. This means that all eligible assets in those accounts will be considered together when determining breakpoints, if applicable, in the fee schedule. Relating Advisory accounts can provide the opportunity for fee reductions at certain breakpoints. Page | 27  Additions and Withdrawals from a Compass UMA Account If the client makes any single deposit or any single withdrawal of $10,000 or more of cash and/or securities during a fee period, the client will be debited or credited a pro-rated fee on the market value of the assets deposited or withdrawn. The pro-rated amount will be due and charged to the clients account as of the date they deposit the additional assets, or the client will receive a pro- rated adjustment or refund of any applicable prepaid fee as of the date of withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Endeavor Program HTS has entered into a strategic alliance with Envestnet PMC and BlackRock to create several risk-based investment models for use in the Endeavor Program. Endeavor Foundations and Flagship Portfolios The Endeavor Foundations and Flagship Portfolios provide Client’s access to discretionary model portfolios created and managed by Envestnet PMC (PMC). These portfolios are sub-advised by Envestnet Portfolio Solutions, Inc. (EPS). The minimum investment to establish a Foundations account is $2,000, $10,000 for Flagship with a maximum of $25,000 or as accepted. EPS provides discretionary investment advisory services under which EPS selects mutual fund investments for the Client. These investments consist of a series of third- party ETFs and mutual funds as well as one or more actively managed funds from the Envestnet PMC Fund family or the ActivePassive ETFs. EPS periodically monitors Client portfolios and makes changes in both the asset allocations as well as specific investment selections when deemed appropriate. Based on the Client’s financial needs, risk tolerances, and investment objectives, their IAR assists them in selecting the appropriate model portfolio. While the Client retains the ultimate decision-making authority over all of their accounts participating in the Endeavor Foundations and Flagship Portfolios, HTS generally expects to implement all asset allocation and/or fund changes applicable to one or multiple model portfolios as recommended by Envestnet PMC. In the selection of an Endeavor Foundations or Flagship Model Portfolio, the Client’s IAR will provide all investment advice relating to the Endeavor Foundations or Flagship Model Portfolios. Envestnet PMC communicates periodic updates to HTS as changes occur to the model portfolios. Model portfolio recommendations provided by Envestnet PMC to HTS are not based on the circumstances of or otherwise tailored to any individual client. Envestnet PMC as will be responsible for placing all trades in a Program account on a discretionary basis. This includes all trades at inception of the Account, Model Allocations changes as directed by Envestnet PMC, any deposit of funds to the account or any Client request to raise cash for a distribution. The Envestnet mutual funds and ActivePassive ETFs constitute a proprietary series of funds of Envestnet. As the investment advisor to the funds, Envestnet receives a management fee based on assets invested in the funds that comprise the Foundations and Flagship Model Portfolios. The management fee is based on the applicable fee for each fund. It is important to note that Envestnet is not compensated under the sub advisory agreement or as part of the advisory fee assessed by HTS to the Client’s account. The target allocation for each of the model portfolios applies at the time a client establishes a Foundations of Flagship Model Portfolio account within the Program. Additions to and withdrawals from an account are generally invested based on the target allocation. However, fluctuations in the market value of securities and other factors can affect the actual asset allocation at any given time. Advisory fees charged for the management of client accounts are in addition to annual management fees, operating expenses and distribution fees assessed by Envestnet PMC funds. Clients should refer to the fund’s prospectus for additional information relating to the expenses of the funds. As sponsor of the Foundations and Flagship Model Portfolios, HTS does not offer or recommend the full spectrum of Envestnet PMC models that may be available through firms that sponsor programs similar to the Endeavor Foundations and Flagship Model Portfolios offered through HTS. Clients may obtain a list of current model strategies and the applicable target allocations may be requested from their IAR. Additionally, a Client may request information regarding Envestnet PMC or unaffiliated fund’s portfolio manager(s), investment objectives, risks, charges and expenses and other details is available in the specific fund’s prospectus, which may be obtained from their IAR. Page | 28  HTS’s receipt of investment research, models, and/or technology from Envestnet PMC creates a conflict of interest for HTS because the receipt of these benefits reduces HTS’s operating costs, which, in turn creates an incentive for HTS to recommend and/or use Envestnet PMC funds and the ActivePassive ETFs products in the investment management of Client accounts. Endeavor Hilltop Model Portfolios The Endeavor Hilltop Model Portfolios provide Clients access to discretionary model portfolios created and managed by BlackRock and Envestnet PMC within the Endeavor Program. The minimum investment to establish an account is $25,000 or as accepted. BlackRock and Envestnet PMC collaborate to develop the model portfolio asset allocation and select the underlying BlackRock, iShare, Envestnet PMC funds and other funds populating each model portfolio, and thereafter communicates periodic updates to HTS as changes occur to the model portfolios. Based on the Client’s financial needs, risk tolerances, and investment objectives, their IAR assists them in selecting the appropriate model portfolio. While the Client retains the ultimate decision-making authority over all of their accounts participating in the Hilltop Model Portfolios, HTS generally expects to implement all asset allocation and/or fund changes applicable to one or multiple model portfolios as recommended by BlackRock and Envestnet PMC. In the selection of a Hilltop Model Portfolio, the Client’s IAR will provide all investment advice relating to the Hilltop Model Portfolios. BlackRock/Envestnet PMC communicate periodic updates to HTS as changes occur to the model portfolios. Model portfolio recommendations provided by BlackRock/Envestnet PMC to HTS are not based on the circumstances of or otherwise tailored to any individual client. Envestnet PMC as overlay manager will be responsible for placing all trades in a Program account on a discretionary basis. This includes all trades at inception of the Account, Model Allocations changes as directed by BlackRock and Envestnet PMC, any deposit of funds to the account or any Client request to raise cash for a distribution. The BlackRock ETFs and iShare ETFs are a proprietary series of ETFs of BlackRock. As the investment advisor to the funds, BlackRock receives a management fee based on assets invested in the funds that comprise the Hilltop Model Portfolios. This management fee is based on the applicable fee for each fund. It is important to note that BlackRock is not compensated under the sub advisory agreement or as part of the advisory fee assessed by HTS to the Client’s account. The ActivePassive ETFs are a proprietary series of ETFs of Envestnet. As the investment advisor to the ActivePassive ETFs, Envestnet receives a management fee based on assets invested in the ActivePassive ETFs that comprise the Hilltop Model Portfolios. The management fee is based on the applicable fee for each fund. It is important to note that Envestnet is not compensated under the sub advisory agreement or as part of the advisory fee assessed by HTS to the Client’s account. The target allocation for each of the model portfolios applies at the time a client establishes a Hilltop Model Portfolio account within the Program. Additions to and withdrawals from an account are generally invested based on the target allocation. However, fluctuations in the market value of securities and as well as other factors can affect the actual asset allocation at any given time. Advisory fees charged for the management of Client accounts are in addition to annual management fees, operating expenses, and distribution fees assessed by BlackRock, iShare, and Envestnet PMC funds. Clients should refer to the fund’s prospectus for additional information relating to the expenses of the funds. As sponsor of the Hilltop Model Portfolios, HTS does not offer or recommend the full spectrum of BlackRock and/or Envestnet PMC models that may be available through firms that sponsor programs similar to the Hilltop Model Portfolios offered through HTS. Clients may obtain a list of current model strategies and the applicable target allocations may be requested from their IAR. Additionally, a client may request information regarding BlackRock, Envestnet PMC or unaffiliated fund’s portfolio manager(s), investment objectives, risks, charges and expenses and other details is available in the specific fund’s prospectus, which may be obtained from their IAR. HTS’s receipt of investment research, models and/or technology from BlackRock and Envestnet PMC creates a conflict of interest for HTS because the receipt of these benefits reduces HTS’s operating costs, which, in turn creates an incentive for HTS to recommend and/or use BlackRock ETFs, iShare ETFs and Envestnet PMC ETFs products in the investment management of Client accounts. In the Endeavor Program IARs will collaborate with their client to complete a Statement of Investment Selection Page | 29  (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with their clients to provide recommendations regarding the appropriate asset allocation and underlying strategies to meet the Client’s objectives. The Clients are directing the investment model selections and changes made to a Program model and ultimately responsible for the selection of the appropriate asset allocation and underlying model portfolio. Endeavor Program Fees Fees for the Endeavor Program are offered on a wrap fee basis, covering all of HTS’s execution, consulting, and custodial services. The maximum Endeavor Program fee schedule, shown in the table below, is based on the total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire total account value in the determination of the fee. The fee does not cover the fees and expenses of any underlying exchange traded funds (“ETFs”) or mutual funds. The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis, and is billed in advance. The Clients’ Program fee will not be adjusted for no or low trading activity. Account Value Up to $249,999 250,000 - 499,999.99 500,000 - 999,999.99 1,000,000+ Maximum Fee 1.75% 1.50% 1.25% 1.00% The Client agrees and acknowledges that other fees may be assessed to the Client that are not part of the Program fee. Other fees include, but are not limited to, fees for portfolio transactions executed away from the Sponsor, dealer mark-ups, electronic fund and wire transfer fees, market maker spreads, exchange fees and broker/custodian fees. The Client is further advised that mutual funds/ETFs charge their own fees for investing the pool of assets in the investment vehicle and such fees are apart from, and in addition to, the Program fee charged hereunder. Please see the prospectus or related disclosure document for information regarding those fees. Client acknowledges and understands that HTS and/or its affiliates may receive 12b-1 fees or other fees from the mutual funds in which Client invests. If the Client should make any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date they deposit the additional assets, or the Client will receive a pro-rated adjustment or refund of any prepaid fee as of the date of the withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Methods of Analysis Foundations and Flagship Models: Envestnet provides Advisers with a variety of portfolio construction methods utilizing analytics module to blend a solution that meets Client requirements. Envestnet uses the capital markets assumptions “CMS” construction process of Black-Litterman and inverse optimization methods to estimate the expected returns for asset classes when constructing Envestnet’s proprietary strategies and in assisting the Adviser with asset allocation and portfolio construction. The underlying CMA process results in the construction of optimized diversified portfolios across a wide set of risk tolerances and preferences that can be employed by the Clients IAR. Hilltop Model Portfolios: BlackRock and Envestnet PMC use a quantitative and qualitative process that is implemented periodically during the year to decide how to rebalance the portfolio. A variety of indicators, including valuations, momentum, and rotation of style factors, are taken into consideration for the guidance of asset allocation decisions. Macroeconomic tendencies, global news and current market conditions are also considered. BlackRock and Envestnet PMC reserve the right to modify the target allocation of each model portfolio based on changes to its capital markets outlook. Navigator UMA Program The Navigator UMA Program is a discretionary fee based advisory program, offering Adviser created model Page | 30  investment strategies that requires the use of the Envestnet SIS to create a model portfolio within the client’s risk tolerance and assign that model to accounts. This enables Clients and their IAR to develop a personalized investment strategy to manage the customized portfolio and deliver ongoing investment advice. With the Program, Clients and their IAR will construct a model portfolio that consists of a wide assortment of investments including, but not limited to, individual equities, ETF’s and mutual funds positions. The SIS model is intended to provide guidance for the management of the Program assets at inception without being overly restrictive, given changing business and market conditions. Clients should review the SIS on a periodic basis and should discuss any modifications promptly with their IAR. In the Program, the IAR manages the accounts on a discretionary basis. For the accounts to be in the discretionary Program the IAR must first be approved to participate in the Program. The Program features include: • Customized model portfolio and allocations • Account minimum is $30,000 or as accepted • Trading done on the Envestnet Platform for eligible Platform securities (a) Client will have the option to either have the account rebalanced semiannually or annually. The Platform Manager will review all Program accounts daily and identify accounts that have not been rebalanced based on the rebalance selection at inception of the account. The review is based on the inception date of the account. If an account has been determined to have any position outside of the drift tolerance set by the IAR the account will be rebalanced. If an account has no positions outside of the drift tolerance no trades will be made and the rebalance clock will be reset. Trades will be done to maintain client’s target asset allocation among the investments in the model. Your affirmative consent is not required to implement these changes. Rebalancing will be accomplished by selling the shares of the over- weighted investment(s) and purchasing a corresponding dollar amount of the appropriate underweighted investment(s). The IAR and Client are free to direct an allocation change or rebalance as they choose, but the account will be automatically reviewed and rebalanced at least on a semiannual, annual, or basis as selected by the client. When the account is rebalanced, the calendar is reset with a new semiannual or annual review now established. The IAR reserves the right to change the drift tolerance as the model portfolios/accounts are reviewed for activity. (b) Client is always free to accept or reject any recommendation from HTS and Client hereby acknowledges that it has the sole authority with regard to the implementation, acceptance or rejection of any recommendation or advice from HTS. (c) The Program provides the Client access to 7 risk-based asset allocation models. The Client’s IAR will provide recommendations regarding the appropriate asset allocation and underlying investments to meet the Client’s objectives, but the client is making the final selection of the investment allocation model and underlying investments and changes made to the Program portfolio and are ultimately responsible for the selection of the appropriate risk-based asset allocation model and underlying investments. At the discretion of the IAR, the model allocation may be reviewed and changed while staying within the risk tolerance. Envestnet provides overlay management services for the Navigator UMA accounts and implements trade orders based on the semi-annual or annual rebalance discipline as well as transactions directed by the client and their IAR at their discretion. Envestnet as the overlay trading manager will be placing the trades directed by the client and their IAR as well as rebalancing the account either semi- annually or annually. The Client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the mutual funds and ETFs that have been selected. (d) A rebalance of the account will also take place when the client directs HTS to raise cash for a withdrawal or the client makes a deposit to the account that results in the cash balance being low or high. All deposits made to the account will be deemed eligible for immediate investment and the client will be responsible for any losses that may arise from a deposit in error. Page | 31  (e) All investment requests received by Envestnet prior to 12:00 pm CST will be processed the same day on a best effort’s basis. Requests received by Envestnet after 12:00 pm CST will be processed by 12:00 pm CST the following trading day. Rebalancing or model allocation changes may result in tax consequences to the account holder including, but not limited to, the realization of capital gains, and/or losses regarding the sale of investments. Cash and Securities Concentrations Advisory Programs may not be appropriate for clients who want to maintain a high level of cash and/or highly concentrated positions that will not be sold regardless of market conditions. If the client continues to hold high level of cash and/or highly concentrated positions then the client does so against HTS’s recommendation and with the understanding that the value of those securities will be included for the purposes of calculating the Program fee, resulting in a higher fee paid to HTS. Please note that the client may hold excess cash or concentrated position in a brokerage account without incurring the Advisory Program Fee. If the account continues to be outside of the cash and concentration guidelines over a specified period of time, then the account will be subject to removal from the Program. Unsolicited Transactions The advice and counsel of the Client’s IAR is a critical service of the Navigator UMA Program Account. Solicited transactions will be made based on the recommendations that the IAR makes to the client. Unsolicited transactions are made when the client direct the trades without advice or counsel from the IAR. The IAR assumes no responsibility for unsolicited trades, as these transactions are directed by the Client absent of advice from their IAR. An unsolicited trading pattern may indicate that the Account is no longer appropriate for the client as they are not leveraging the advice of their IAR. In these situations, HTS has the right to terminate the Account from the Program. After the client has executed an unsolicited transaction without the advice of the IAR, for so long as the client holds that position in the Account, HTS will take that asset into consideration: • As part of the overall account assets, • When giving periodic asset allocation advice, • When valuing the account holdings, • When providing analyses and reports on the account’s performance, and • HTS can also make recommendations to consider selling the asset, when deemed appropriate. We will include any security acquired in an unsolicited transaction as part of the account assets for calculating the advisory fee. Holdings that remain in the account will continue to be part of each fee cycle calculation until the holding is transferred out or liquidated. Inactive Accounts The Accounts are reviewed on a quarterly basis for trading inactivity for accounts that have been in the Program for over 12 months. If the accounts have had zero trades for the trailing 12 months, the IAR will be notified of the inactivity and if the account does not have trading activity by the end of the next quarter review, the account will be subject to conversion to a brokerage account due to the continued inactivity. The reinvestment of dividends and capital gains are not considered trades for this purpose. Navigator UMA – Methods of Analysis Each IAR has the independence to take the approach they believe is most appropriate when analyzing investment products and strategies for Clients in the Program. There are several sources of information that HTS and/or IARs use as part of the investment analysis process. These sources include, but are not limited to: Financial publications SEC Filings (annual reports, prospectus, 10-K, etc.) • • Research materials prepared by third parties • Corporate rating services • • Company press releases • Regulatory and self-regulatory reports • Other public sources Page | 32  As a firm, HTS does not favor any specific method of analysis over another and therefore would not be considered to have one approach deemed to be a “significant strategy.” There are, however, a few common approaches that HTS or the IAR, often use individually or collectively, while providing advice to Clients. Please note that there is no investment strategy that will guarantee a profit or prevent loss. The following are some common strategies employed in the management of Client accounts: Dollar Cost Averaging (DCA): The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high. Periodic investment Programs cannot guarantee a profit or protect against a loss in a declining market. Dollar cost averaging is a long-term strategy that involves continuous investing, regardless of fluctuating price levels, and, as a result, the Client should consider their financial ability to continue to invest during periods of fluctuating price levels. Asset Allocation: An investment strategy that aims to balance risk and reward by allocating assets among a variety of asset classes. At a high level, there are three main asset classes—equities (stocks), fixed income (bonds), and cash/cash equivalents— each of which have different risk and reward profiles/behaviors. Asset classes are often further divided into domestic and foreign investments, and equities are often divided into small, intermediate, and large capitalization. The general theory behind asset allocation is that each asset class will perform differently from the others in different market conditions. By diversifying a portfolio of investments among a wide range of asset classes, IARs seek to reduce the overall volatility and risk of a portfolio by avoiding overexposure to any one asset class during various market cycles. Asset allocation does not guarantee a profit or protect against loss. Technical Analysis (aka “Charting”): A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value. Instead, they use charts and other tools to identify patterns that can suggest future activity. When looking at individual equities, a person using technical analysis believes that performance of the stock, rather than performance of the company itself, has more to do with the company’s future stock price. It is important to understand that past performance does not guarantee future results. Fundamental Analysis: A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial, and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security’s value, including macroeconomic factors (e.g., the overall economy and industry conditions) and company-specific factors (e.g., financial condition and management). The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security’s current price, with the aim of figuring out what position to take with that security (underpriced = buy, overpriced = sell or short). This method of analysis is considered to be the opposite of technical analysis. Quantitative Analysis: An analysis technique that seeks to understand behavior by using complex mathematical and statistical modeling, measurement, and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically. Some believe that it can also be used to predict real-world events, such as changes in a share price. Qualitative Analysis: Securities analysis that uses subjective judgment based on no quantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. This type of analysis technique is different from quantitative analysis, which focuses on numerical values. The two techniques, however, are often used together. Navigator UMA Program Fees Fees for the Navigator Program are offered on a wrap fee basis, covering all of HTS’s execution, consulting, and custodial services. The maximum Navigator UMA Program fee schedule, shown in the table below, is based on the total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire total account value in the determination of the fee. The fee does not cover any underlying costs associated with exchange traded funds (“ETFs”), closed-end funds, mutual funds, unit investment trusts or exchange traded notes (“ETNs”). The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated Page | 33  quarterly basis, and is billed in advance. The Client’s Program fee will not be adjusted for no or low trading activity. Maximum Annualized Fee Total Account Value Up to $249,999 $250,000 – $499,999 $500,000 – $999,999 $1,000,000 and over 2.25% 2.00% 1.75% 1.50% If the Client should make any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date they deposit the additional assets, or the client will receive a pro-rated adjustment or refund of any prepaid fee as of the date of withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Destination Fee-Based Annuity Program The Destination Fee-Based Annuity Program is a non-discretionary investment advisory program. The program enables the client to receive ongoing investment advice and related services, including custody, and transaction reporting in connection with the Variable or Index Annuity for an asset-based fee (“Platform Fee”). Participation in the Destination Fee-Based Annuity Program may cost the client more or less than purchasing these services separately. HTS offers the Destination Fee-based Annuity Program through Envestnet Asset Management, Inc. (“Platform Manager”), an unaffiliated registered Investment Adviser that operates a technology platform. Investment advisory services for the Destination Fee- Based Annuity Program will be provided to the client by HTS and their IAR. To participate in the Destination Fee-Based Annuity Program, the client will complete and sign an annuity contract from the selected insurance carrier, the Statement of Insurance Selection (“SIS”) and the HTS Client Suitability Agreement to establish the annuity contract. Generally, the client will pay a Program fee based on the accumulated value of the Contract assets. The Contract is the only investment in the Destination Fee-Based Annuity Program. No other securities may be purchased or otherwise held within the Destination Fee- Based Annuity Program. Review the chart below and the HTS Destination Fee-Based Annuity Program Annuity Client Suitability Agreement for more information about the contract assets. The investment options available for assets held in the selected annuity contract are referred to as sub-accounts. The client also has the option of investing a portion of those assets into a fixed sub- account. As a shareholder of portfolio(s) invested in a sub-account, the client will pay the proportionate share of the portfolio’s underlying expenses, which may include advisory fees and other operating expenses. Destination Fee-Based Annuity Program Overview The Destination Fee-Based Annuity Program is designed to provide the client with ongoing investment management and advice for the sub-account investment options of a fee-based variable or index annuity. In some cases, annuities have additional riders available for purchase. IARs will monitor market conditions and the performance of the annuity’s sub-accounts and/or market linked indexes and discuss with the client and rebalance as needed. If the clients risk tolerance changes, updates should be made to the risk tolerance selection made for the annuity. In some cases, insurance carriers will, depending upon market conditions, modify the risk exposure of the annuity’s sub-accounts which can result in a change to the risk profile of the annuity. The Client should carefully review the prospectus for the selected annuity to understand the conditions under which a change to the risk profile will occur and discuss any questions they have with their IAR. What is a Variable Annuity A tax deferred variable annuity will allow the client and their IAR to determine how assets are invested by choosing from a selection of investments available from the annuity carrier called sub- accounts. These sub- accounts can be made up of a wide variety of investments. As the value of these investments fluctuate based on Page | 34  the volatility of the markets, so will the contract value. Variable annuities have greater growth potential than some other investments but can also lose money. The range of investment options with different risk and growth potential can provide additional flexibility in structuring an investment plan for retirement savings. What is an Index Annuity An index annuity is a tax deferred, long-term savings option that provides principal protection in a down market and opportunity for growth. It gives the client more growth potential than a traditional fixed annuity, but with less risk and less potential return than a variable annuity. Returns in an index annuity are based on the performance on an underlying index, such as the S&P 500. Participation rates of the underlying index will vary by contract. What is a Structured Annuity Structured annuities can also be referred to as registered index-linked annuities, variable-indexed annuities, indexed-variable annuities, or buffered annuities. This is essentially a blend of a variable and fixed indexed annuity. Depending on the Insurance Carrier, it may offer more market upside than a fixed indexed annuity. Structured annuities offer multiple different crediting strategies that let the client choose the balance between growth potential and downside protection. The IAR will help the client narrow these choices down and select a strategy that will help the client reach the individual retirement and legacy goals. As each crediting period expires, the client has the ability to reallocate to a new type of crediting strategy for a new term. This flexibility allows the client to meet changing financial objective over the life of the structured annuity. The IAR must be licensed to sell variable insurance products in the state of residence before presenting the Destination Fee-Based Annuity Program to a client or prospective client. Annuities are considered long-term, tax-deferred investments designed for retirement, involve investment risks, and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax penalty for withdrawals before age 59 1/2 unless an exception to the tax penalty is met. The Annuity Accounts are monitored by the IAR at least annually to ensure that the clients portfolio remains aligned with the selected model and the Client Risk Profile, as stated in the SIS. All investment decisions are made and implemented by the client and their IAR. The account statements will be provided to the client quarterly by the insurance carrier. Services Destination Fee-Based Annuity Program is a non-discretionary investment advisory program that gives the client access to several variable and index annuity contracts offerings from different insurance carriers. The IAR will help the client develop an asset allocation strategy, select from the sub-accounts or fixed account(s) available from the annuity carrier, and determine how much of the premium to allocate into each of the sub- account(s) and/or fixed account. The IAR may use a variety of methods and resources to develop a recommended asset allocation strategy. Due to changing market conditions, the asset allocation among the sub-accounts within the contract may change or deviate from its original allocation. Considering this, the IAR may recommend that the client participate in the automatic asset rebalancing program, which is an option available in most the offerings. If the client does not choose to participate in the asset rebalancing program, their IAR will recommend that the client rebalance or reallocate the sub- accounts and the fixed account assets. It is solely the client’s decision to implement any rebalancing or reallocation recommendations provided by the IAR. The client may also contact their IAR to rebalance or reallocate the Sub-accounts and the Fixed Account assets. Where permitted by applicable law and business need, the insurance carrier reserves the right to make certain changes to the structure and operation of the contract. These changes include, among others, the right to: • Remove, combine, or add new sub-accounts at its sole discretion. • Substitute shares of one portfolio for another, which may have differences including different Page | 35  fees, expenses, objectives, and risks. • Restrict or prohibit additional allocations, and/or payments to sub-accounts. Review the annuity prospectus for more information about these changes. Program Account Reviews and Reports The insurance carrier will provide custodial statements, and trade confirmations for products purchased through the Destination Fee- Based Annuity Program. The client should review these documents upon receipt and promptly notify their IAR of any discrepancies. Additional information regarding these documents is available below. Account Statements The insurance carrier will send the client statements at least quarterly. These statements contain information including, but not limited to, the accumulated value of the contract, the current market value of each sub-account invested in, the amount contained within the fixed sub-account and transaction activity for the previous quarter period. Trade Confirmations The insurance carrier will send the client confirmation of each purchase or surrender transaction effected in the contract and/or any other transaction for which it is obligated to send the client confirmation. Destination Fee-Based Annuity Methods of Analysis The clients IAR will use a variety of methods and resources to develop a suggested asset allocation strategy for the Program sub- accounts and fixed account assets in the clients Fee-Based Annuity contract. The clients IAR will research and recommend the sub-accounts from the eligible funds the carrier makes available for their account based on the stated risk tolerance and investment objectives. Each adviser has a different philosophy or criteria in the review and selection of investment products. Fees and Compensation Fees and charges differ when a variable annuity is purchased in a traditional brokerage account rather than an advisory program like Destination Fee-Based Annuity Program. Generally, variable annuities that are available for purchase in an advisory account have lower surrender charges than similar variable annuities from the same issuing insurance carrier when the product is purchased in a traditional brokerage account. The difference in surrender charges is largely attributable to the portion of the surrender charge that the issuing insurance carrier would use to pay selling commission to registered representatives in a traditional brokerage relationship. The fee for any optional death benefit riders and/or living benefit riders is generally the same whether the variable annuity is purchased in an advisory account or a traditional brokerage account; selling compensation is not paid to HTS nor IARs if the client selects an optional benefit rider. Clients that participate in the program will be charged a quarterly program fee for each Destination Fee-Based Annuity Program contract not to exceed the fee rate from the fee schedule below: Destination Fee-Based Annuity Program fee Schedule Portfolio Value Maximum Annual Fee 1.50% Any Billable Account Value The Program fee will vary among Clients and may be negotiable under certain circumstances. Factors typically considered to determine the Client Program fees include: • The managed account program(s) the Client have selected. • The amount of assets in the Contract. • The personal financial needs, objectives, and complexity of the client’s financial situation. • The level of anticipated or actual trading within the Sub-accounts. • The experience level and credentials of the IAR. Page | 36  Calculation of Program Fees The Program fee is based on the accumulated value of the contract assets as of the last business day of the end of the quarter and in accordance with the Client Agreement. The Program fee is not deducted from the annuity Program account, but instead it is deducted from a payment account opened at HTS. The payment account is a separate brokerage or ASG account and linked to the Destination Fee-Based Annuity Program account for the payment of the Program fee. In addition to the Program fee, the Client pays the insurance company the internal expenses for the selected annuity product as disclosed in the annuity’s prospectus. Internal expenses for annuity products are born by all customers that own the annuity and are in addition to the Destination Fee- Based Annuity Program fee the Client pay. They are paid directly from the assets in the annuity product as outlined in the products’ prospectus and cannot be paid from a payment account. Allocation of the Program Fee A portion of the Program fee is paid to HTS, the clients IAR and the Platform Manager for their services. The amount of the fees paid to the IAR and/or HTS depends upon the Program Fee that the client negotiates with their IAR and the amount of the fee payable to the IAR pursuant to the HTS compensation policies. Is the Destination Fee-Based Annuity Program right for the Client The IAR and/or HTS may recommend to the client one or more programs. The decision to select one or more managed account programs is the up to the client. A discussion between the client and their IAR, among other things, should include the following to determine if the recommended program is appropriate: • The cost, potential benefits, and potential risks of the Destination Fee-Based Annuity Program • The Clients investment objectives and sophistication of the investment strategy • The types of and number of investments the client hold and intend to make, including the percentage of the overall portfolio that the client intend to hold in the fixed sub-account. • The clients desire for diversification across sub-account(s) • The clients anticipated use of other services and features specific to the Destination Fee- Based Annuity Program. • The payment preference of an asset-based fee for ongoing investment advice and other related services compared to a commission-based variable annuity. At any time, a contract can vary greatly in the size, number and diversity of the sub-accounts held, due to, among other things, market conditions and the current investment needs and objectives. Generally, it is recommended that the client diversify the holdings to help reduce the portfolio’s overall market risk. Investment diversification does not ensure a profit or protect against loss. If the Client intends to hold a concentrated portfolio, including a concentrated position in the Fixed Account, for an extended period of time, the Client should consider other contract options (i.e., investing in a commissioned based variable annuity) that may be more economically advantageous. The IAR receives training related to the product offerings in the Destination Fee-Based Annuity Program. Training includes, but not limited to, client needs and suitability of product, expected trading, fee type preference, and desire for ongoing investment advice. Account Requirements and Types of Clients HTS, as a registered investment advisor, provides investment advisory services to individuals, trusts, estates, nonprofit organizations, corporations, and other business entities. The minimum initial investment amount for the Destination Fee-Based Annuity Program is $25,000. Margin accounts are not eligible within this program. If the client decides to establish an account in the Destination Fee-Based Annuity Program the client will sign a Client Suitability Agreement, which will govern the client’s participation in the Program, the insurance carrier’s annuity contract, and the Platform Managers Statement of Insurance Selection. Page | 37  Sub-account Selection and Evaluation The IARs may have access to a variety of methods and resources to develop a recommended asset allocation strategy for the sub- accounts and fixed sub-account assets within the annuity contract. Risks Investing involves risks and there is no guarantee that the sub-account options available will achieve the client’s stated objectives. Certain sub-account options may present more risk than others due to the nature and/or complexity of the strategy. While fixed income portfolios have historically been considered a more conservative investment in comparison to equity portfolios, it is an investment with associated risks that should be considered before investing. A fixed income investor should not expect to experience higher levels of income or yield without assuming some or all the potential risks associated with the underlying fixed income investments. There are various risks associated with fixed income investing, some of the primary risks include credit risk, duration risk, and interest rate risk. Review the annuity prospectus for the sub-account options, which contains more complete information on the investment objectives, risks, charges, and expenses of the portfolio, which investors should read and consider before investing. The potential tax benefits of a tax free or tax deferred investment are eliminated if the investment is made in a qualified plan, such as a 401(k) or IRA. Voting Client Securities HTS, the IAR and the Platform Manager do not vote proxies, nor will they advise the client regarding the voting of the proxies, corporate action or other materials regarding the shares held in the sub-account(s). Review the annuity prospectus for more information about voting privileges and delivery of proxy materials, reports and other materials relating to the sub-accounts. Review of Accounts HTS periodically reviews sub-account allocation for the Destination Fee-Based Annuity Program. Reviews may include, but not limited to: • Certain types of transaction activity or inactivity. • Sub-account options relative to the client’s financial status, investment objectives, and risk tolerance. Depending on the results of the review, HTS may take certain actions, up to and including the termination of the Program services. As a participating client in the Destination Fee-Based Annuity Program, the client will periodically receive reports from the insurance carrier. These include quarterly statements, transaction confirmations. The client should review these and report any suspected discrepancies immediately to their IAR. Selecting Annuity Riders and Features Riders are optional enhancements that are available on the client’s annuity contract at an additional cost. They allow the IAR to tailor the contract and provide additional protection of the client’s investment. Riders may not be available on all products in the Destination Fee-Based Annuity Program. Living Benefits Living benefit riders provide guaranteed lifetime income for the client (and the clients spouse, when elected). • Can provide guaranteed increases, or roll-ups to the clients benefit base, for future income. • Offer consistent lifetime payouts that are based on the age when the client take income, or on the younger spouses age, if elected. Death Benefits Death benefits allow the client to pass assets to beneficiaries while potentially avoiding the time- consuming and costly probate process. Death benefits may be used to: • Continue payments or a lump sum to a designated beneficiary. • Pay for the owner’s final costs (such as funeral, burial or estate planning). Page | 38  Annuity contracts (not specific to death benefits) generally waive surrender charges due to terminal illness or injury. Most products offer a standard death benefit – often the return of premium. In some cases, there may be an additional fee for this death benefit. Some annuities offer optional death benefits that let the client lock in the highest contract value (annually or monthly) or a set rate of interest, even if they pass away when performance is down. There are also annuities that offer a spousal protection feature on death benefits. It is important to note that these riders, in some cases, do have additional costs. Please make sure to discuss the benefits of these riders as well as the costs with the IAR. Additional information about these riders and the costs are found in the annuity prospectus. HTS Program Investment Strategies; Eligible and Ineligible Assets This Section describes HTS’s general policies regarding eligible and ineligible assets in the Advisory Programs. Specifically, the program permits the Client to hold, but not to purchase, certain assets deemed ineligible in the Programs including but not limited to the following: • B share class and C share class mutual funds and other classes deemed ineligible • Open-end mutual funds not approved for the Program • UITs not approved for the Program • ETFs and closed-end funds not approved for the Program Structured products not approved for the Program • Alternative investments not approved for the Program While these assets are permitted to be held in Program accounts, they will need to be coded as unsupervised. The assets are excluded from the calculations of the clients Program fees due to the additional compensation that HTS receives in connection with those investments. These unsupervised assets will not be included when determining the minimum account opening requirement, and they may not be included in the performance reports for the Clients Program account. HTS reserves the right to determine the eligibility of assets in the Program and to discontinue the inclusion of any security for any reason in the Client Program account, at any time and without advance notice to the Client. Any such addition or deletion may also result in a change in Program fees associated to the Program account. Investment strategies; Eligible and Ineligible Assets HTS employs a variety of investment strategies in connection with the wrap fee and other investment Advisory services, depending upon: • The type of Client involved • The Program chosen • The objective and risk tolerance selected by the Client Some of these strategies involve the use of asset allocation models, long-term and short-term investments. HTS has discretion in some cases to expand the offerings in the Programs to include multiple style accounts and investment strategies that include, but not limited to: • The purchase and sale of mutual funds • Common and Preferred Stocks • Fixed Income Securities • ETFs/ETNs • Non-Daily Traded Alternative investment vehicles • Margin and short sales • Option strategies HTS has discretion to impose special suitability and investment requirements with respect to these portfolios. Page | 39  Aviator/Co-Pilot/Navigator UMA Eligible Assets and Ineligible Assets HTS requires that the Client hold and purchase only eligible assets in their Aviator, Co-Pilot and/or Navigator UMA accounts. Generally, with respect to the Program, the client or the IAR have the ability to purchase and sell a broad array of different securities, including, but not limited to, any of the following eligible assets: • Common and preferred stocks • Government, corporate and municipal bonds (agency transactions only) – investment grade only in certain retirement plan accounts • Approved eligible option strategies • American Depositary Receipts • Closed-end funds • Open-end mutual funds which in some cases include several share classes including institutional, advisory, and other non 12b-1 fee paying share classes. In limited cases some mutual funds used pay 12b-1 fees. • Select no-load mutual funds • Eligible wrap CUSIP UITs • Eligible ETFs/ETNs • Public REITs • Approved publicly registered non-traded REITs – Co-Pilot program only • Approved eligible alternative investments – Co-Pilot Program only • Approved eligible structured products -Co-Pilot Program only • Certain commodities/future based securities products The following products/strategies may not be eligible (“Ineligible Assets”) for HTS’s Aviator, Co- Pilot, and Navigator UMA Advisory Programs: • Syndicate issues, initial public offerings, and Brokered CDs • Short positions - unless approved • Solicitation of low-priced securities • Non-publicly traded securities/Private Placements • Non-networked mutual funds • Share classes of mutual funds that pay 12b-1 fees or have CDSC charges unless approved • Auction rate securities – individual issues • Leveraged and inverse ETFs and ETNs. This also includes any derivative thereof, including, but not limited to, options, swaps, or futures contracts on these inverse/leveraged ETFs/ETNs. • Crypto exchange traded products • Day trading • Alternative investment funds that do not offer an advisory or institutional share class. • Listed or OTC index warrants • Commodities and futures (in certain programs) • Non-daily traded alternative investments – brokerage share classes The list above describes the products which are usually (but not always) eligible or ineligible in the Advisory Programs. The list can change at any time at HTS’s discretion. Eligibility of investments can vary by program and strategy type. The client should contact their IAR for the list of eligible investments in their specific program. HTS’s Advisory programs do not offer the ability to conduct principal trades. As such, in these accounts, the client is not permitted to purchase or sell securities that trade only on a principal basis. Currently, the client has access to principal execution in their Advisory account only for tax loss sales transactions in worthless securities in all Programs. Hilltop Holdings (HTH) Stock Subject to the exception described below, HTS’s Advisory Programs do not offer HTH stock or HTH securities. Page | 40  HTS does not allow Program Accounts to be funded by depositing HTH stock. HTS has discretion to allow SMA and UMA Managers in the Passport Series and Momentum Pathways Programs who are not affiliated with HTS to purchase HTH securities for those Accounts (this is limited to the common stock of HTH). Alternative Investments Alternative investments, including hedge funds, private markets (real estate funds, private credit, private equity, and interval funds) differ from traditional investment types and give investors access to additional sources of investment return. Alternative investments are generally less liquid than traditional investments, may require a longer investment period, are subject to increased volatility and risk of investment loss. Therefore, alternative investments may not be appropriate for all investors. Alternative investments are restricted to a percentage of the Client’s total investable assets, based on the Client’s risk tolerance. Investor qualification requirements also must be met in the case of private placement offerings. Alternative investment funds are limited to the advisory share class/cusip strategies made available through the HTS approved third party investment platform (IAR approval and Client qualification policies and procedures apply). For the selection of alternative investments for the Co-Pilot Program accounts (i.e., hedge funds and certain private market funds), HTS has partnered with a third-party and has established an initial and ongoing due diligence process. The process is designed to help ensure any alternative investments approved for investment allocations or strategies made available for the Programs have been properly researched and are suitable and consistent with the Client’s Investment Profile. This process may include, but is not limited to, an initial review of third-party reports, offering documents and marketing materials, an evaluation of the investment philosophy, process and performance, the general business practice and financials, regulatory compliance and disclosure documents, risk management and strategic planning. A fund that the Client purchased elsewhere could never have been subject to HTS research. Certain Alternative Investment Arrangements and Compensation It is imperative that Clients work with their IAR to evaluate how a specific alternative investment and its features fits their individual needs, risk tolerance and investment objectives. An important component of this selection process includes carefully reading the accompanying offering documents and/or prospectus prior to making an investment decision. The offering documents contain critical information and risk considerations that will assist Clients in making an informed investment choice. It is important to note that the fees and expenses related to alternative investments are often higher than those of more traditional investments. While each investment differs in terms of both total fees and expenses and how those fees and expenses are calculated, the following generally discusses the primary categories of fees and expenses that are common to many alternative investments and the different ways that HTS and the IAR may be compensated. Management Fees The manager for any particular investment often charges a management fee that is based on the total value of the investment. As the value of the investment increases, the total management fees the manager receives may increase. Conversely, as the value of the investment decreases, the total management fees the manager receives may decrease. Incentive-Based Compensation Many alternative managers receive incentive-based compensation in addition to management fees. Inventive- Based fees typically involve the manager retaining a percentage of profits generated for Clients. Fees related to incentive compensation are often referred to as incentive, performance- based fees or carried interest. The exact calculation of incentive fees or carried interest differs by product and manager. Upfront or Ongoing Servicing Fees or Placement Fees Many alternative investments have upfront costs directly related to compensating an IAR and/or HTS, generally based on the total amount of the investment, up to 5%. Ongoing servicing fees can be as high as 4% of the total value of the investment. Page | 41  Redemption Fees Some investments have direct or indirect costs related to liquidating a position, particularly if an investment is liquidated shortly after being purchased or if it is specifically designed to provide limited or no liquidity to investors. Other Expenses Alternative investment strategies will be accessed through a variety of legal structures, including mutual funds, limited partnerships, and limited liability companies. In certain structures, particularly for new offerings, investors will incur organization and offering expenses that are related to the creation of the legal structure and marketing of the product. These costs ultimately serve to decrease the amount of the Client’s investment. Investors will also incur other expenses based on the investment activity of the fund. For example, in a Real Estate fund, investors may be charged fees related to the acquisition of property. In a hedge fund that shorts stock, there are costs associated with establishing and maintaining the short position. Lastly, investors in alternative investments generally bear the cost of certain ongoing expenses related to administration of the product. These expenses could include costs related to tax document preparation, auditing, or the custodial services. Clients should refer to the offering documents and/or prospectus for a full recitation of all fees and other expenses that will incur relating to a client’s alternative investment. HTS IAR will answer any questions regarding the total fees and expenses and the initial and ongoing compensation that the IAR, HTS and/or affiliates may receive. Impact of Ineligible Assets in The Client Accounts Neither HTS, the Clients IAR, or the SMA/FSP manager will act as the Clients investment advisor with respect to Ineligible Assets. If the client holds Ineligible Assets in the Advisory account and also has a separate HTS commission-based brokerage account, HTS may transfer those assets from the Program account to the HTS commission-based brokerage account in order to facilitate billing and performance reporting. However, the client understands that HTS is not obligated to transfer those assets and the client will remain responsible for monitoring and moving these assets from the Programs. The transfer of Ineligible Assets from the Advisory Program account to the brokerage account will not result in liquidation of the securities or taxable events, commissions, or any other compensation either to HTS or the Investment Adviser. HTS has discretion to terminate the Account. If the client does not have a separate HTS commission-based brokerage account and decides to hold Ineligible Assets in the Advisory account, the client does so against HTS’s recommendation with the understanding that the value of those securities will impact a variety of services offered in the Programs and will be included as part of the account assets for calculating the advisory fee on the last business day of each calendar quarter. Holdings that remain in the account will continue to be part of each fee cycle calculation until the holding is transferred or liquidated, this includes calculations and reporting of performance for the account and calculating the Program Fee and other account billing events, which will result in a higher fee to HTS. These Ineligible Assets can also cause a trade error(s) due to over investment and in this situation, HTS has discretion to terminate the account. HTS at its discretion will mark these ineligible assets unsupervised. Unsupervised Assets Under certain circumstances positions in the account will be held as unsupervised assets. These Unsupervised Assets will not be a part of the billing calculation for the Program account and will not a part of the Account Performance Calculation and will not be subject to ongoing monitoring as long as they are coded as unsupervised. If an asset is marked as an Unsupervised Asset during a quarterly billing period, the net value of that asset will be excluded for purposes of determining the asset-based Program Fee beginning at the start of the next quarterly billing period, and no portion of the asset-based Program Fee paid by a client in advance for the quarter will be refunded or rebated back to the client. Billing Practices for all Programs The billing process described below is subject to change upon prior written notice to the client. Page | 42  Relating Accounts for Billing Purposes The client can request to have two or more eligible Advisory accounts be treated as related accounts for purposes of taking their assets into consideration in order to calculate the Program Fee. This means that all eligible assets in those accounts will be considered together when determining breakpoints, if applicable, in the fee schedule. This request is subject to approval from HTS. Relating Advisory accounts can provide the opportunity for price reductions at certain breakpoints. If the client chooses a breakpoint fee schedule for the account, the client should review and consider the potential benefits of relating advisory accounts. The Program Fee for Advisory Accounts with a breakpoint fee schedule that are terminated prior to the quarterly billing process will be based on the contractual rate for that Account, not the relationship rate. Clients should discuss with their IAR for more information on the definition of eligible accounts and how to choose this billing option. Retirement Accounts cannot be linked where a prohibited transaction under ERISA or the Internal Revenue Code could result. Initial Program Fee HTS will deduct the Initial Program Fee from the clients account when the account is accepted for the Program. The fee will be calculated based on the value of the eligible assets on the date the account is accepted, pro-rated to cover the period from the date the account is accepted through the end of the calendar quarter. Quarterly Fee After the assessment of the Initial Program Fee, the subsequent Program Fees will be assessed quarterly based on the net asset value of the account on the last business day of each calendar quarter. Fees will be charged directly to the client’s account in the month following the close of a calendar quarter unless the client has designated another eligible HTS account to pay the Program Fee. The fee is an annual percentage of the account assets—and the client will pay the fee quarterly in advance, pro-rated according to the number of calendar days in the billing period. The quarterly fee for the Destinations Program will be billed in arrears. Advisory fees are calculated on the fair market value of the assets, as determined by HTS and Envestnet, on the last business day of the preceding calendar quarter. If the management of the account commences or is terminated at any time other than at the beginning or end of a calendar quarter, the fee is prorated based on the initial account value and the number of days the account was open in that quarter. For calculation purposes the fee is based on 365 actual days in a year (366 for leap year). The calculation is as follows: (Market Value x Rate x ((Days / 365)) with the Rate being the agreed upon fee within the Advisory Agreement. For more complete information on the fee charged, please contact HTS or the IAR of record. For the purposes of calculating the Program Fee, the value of the Account is calculated as the sum of the long and short market value of all Billable Securities held in the Account, plus accrued interest, minus any margin loan balances, as of the last day of the prior quarter. For mutual funds, HTS will use the fund’s net asset value, as computed by the mutual fund company. HTS and/or Envestnet prices securities based on information believed to be reliable. If any prices are unavailable or believed to be unreliable, HTS and/or Envestnet will determine prices in good faith to reflect understanding of fair market value. If the Agreement is terminated prior to the end of the quarter, the client will receive a pro-rata refund of the prepaid, unearned fees from the date the Account is removed from the Program through the end of the quarter. For accounts billed in arrears the account will be billed and debited on a pro rata basis up to the termination date. Please see the “Account Termination” section of this Disclosure Brochure for additional information. When fees are calculated, certain assets are excluded from the market value of the Account. These are called unsupervised assets and will not be included in the “billable” Market Value. Unsupervised assets are generally securities that are not considered approved for the Program or that the IAR and client have agreed should be held only and not included in Account rebalancing, performance tracking and management of Account. Cash and cash equivalents are included in the Program Fee calculations. Fee Rate Changes Changes to a fee rate on an Advisory account, whether an increase or a decrease in the Annual rate, must be received by ASG no later than the 20th of the month prior to the quarter end. If the request is received after the cutoff date, the new rate will not go into effect until the next quarter billing cycle. The changes will also apply to any contributions or withdrawals over $10,000 made after the rate change request. Page | 43  Alternative Investments Valuation and Redemptions The valuation of alternative investments held at HTS reflect the records of the issuers and administrators of those funds. HTS does not guarantee the accuracy of the information. The value shown is not necessarily the value the client would receive from the issuer if they sold the assets. The Net Asset Value is primarily based on estimated portfolio values provided by the underlying fund sponsor. Reported estimates sometimes do not reflect resale, liquidation or repurchase value, if any, and sometimes do not reflect distributions of capital until the next valuation is reported, generally on an annual or semi-annual basis. These valuation practices are important because HTS calculates the Program Fee for alternative investments the client holds in Advisory Accounts based on these estimates. For purposes of calculating the Program Fee, HTS will use the valuation of alternative investments available/reported to HTS as of the billing date. Valuation for alternative investments is often delayed, so only those investments that have at a minimum quarterly valuation will be eligible for the program. In addition, for Program Accounts holding eligible alternative investment (nondaily traded alternative funds), initial cash proceeds from redemptions sometimes are not received into the account for a period that can extend over several months. Proceeds from "hold back" promissory notes are usually received within 18 months of issuance. Redemptions and "Hold Back" Promissory Notes: For accounts holding eligible alternative investments, proceeds from redemptions are not to be received into the Advisory Account for a period that can extend over several months after a redemption request is submitted and is effective. As a result, the Program Fees charged originally are based on the value of the alternative investment fund inclusive of the value of the alternative fund pending redemption. The client will receive a credit of the Program Fee imposed on alternative investments the client redeems in whole or in part while they hold these investments in Advisory Programs of the amount meets the minimum requirements and the funds are withdrawn from the account. Credits will be based on the effective date of the withdrawal of the redemption amount. Advisory Program Fees, Compensation, and Other Costs For all Programs, the fees do not cover the fees and expenses of any underlying ETFs, closed-end funds, UITs, ETNs or mutual funds, fees for ancillary services such as wire transfers, returned checks, etc., nor does it cover all applicable exchange fees, stepped out transactions or option reporting fees. In the event of third-party fees, such as those from foreign exchanges; Securities and Exchange Commission; other broker-dealers; markups, markdowns, or spreads; or legally mandated fees; the firm reserves the right to pass these fees on to the client in addition to advisory fees. There are additional costs associated with the Destinations Program selection of optional riders, and the Tax and Impact Overlay Services offered on Passport Series SMA, Gateway FSP, and Momentum Pathways UMA Programs. The client should be aware that Program fees charged could be higher than those otherwise available if the client were to select a separate brokerage service and negotiate commissions in the absence of the extra advisory services provided. HTS’s fee schedules are subject to negotiation, depending upon a range of factors including, but not limited to, account sizes and overall range of services provided. HTS acts as the Sponsor and/or provide certain services offered by its affiliate Momentum Independent Network Inc. (MIN). The fees that these MIN charges sometimes are different from what is stated in this Disclosure Brochure. Please refer to the disclosure document of MIN, as appropriate, to determine the fees they charge. The client should consider the value of these advisory services when making such comparisons. The combination of custodial, advisory, and brokerage services sometimes are not available separately or could require multiple accounts, documentation, and fees. The client should also consider the amount of anticipated trading activity when selecting among the Programs and assessing the overall costs. Advisory Programs typically assume a normal amount of trading activity and, therefore, under particular circumstances, prolonged periods of inactivity or asset allocations with significant fixed income or cash weightings can result in higher fees than if commissions were paid separately for each transaction. If the client liquidates securities prior to initiating or after terminating a Program service, the client will be subject to customary brokerage charges with respect to that transaction, in addition to any Program fees that are applicable during the period. Page | 44  The clients IAR has a financial incentive to recommend a fee-based advisory program rather than paying for investment advisory services, brokerage, performance reporting and other services separately. A portion of the annual advisory fee is paid to the client’s IAR, which generally is more than the IAR would receive under an alternative program or if the client paid for these services separately. Therefore, the IAR has a financial incentive to recommend a particular account program over another. Such incentive compensation is generally available as follows: IARs utilizing any of the previously mentioned Programs offered by HTS generally receive compensation in the form of asset-based fees, and this compensation is typically credited to the IAR on a quarterly basis. Such compensation generally is more than the representative would receive if the client participated in other programs or paid separately for investment advice, brokerage and other services and, therefore, the IARs have a financial incentive to recommend the advisory programs over other services. IARs are typically compensated based on their annual gross production, whereby higher gross production will generally result in higher payouts. These compensation programs constitute a targeted payout increase to certain qualified IARs based on economies of scale achieved by HTS, its affiliates and IARs at increasing asset levels. However, such compensation arrangements represent a conflict of interest where an IAR is incentivized to recommend an asset-based fee account Program rather than recommending an alternative product or service, if comparable or if available separately to Clients. The client should be aware of such arrangements and should consult the IAR for additional details regarding the IAR’s compensation levels in fee-based accounts. As part of its fiduciary duties to Clients, HTS endeavors at all times to put the interests of its advisory Clients first. The Client should be aware, however, that the receipt of economic benefits by HTS (or its related persons) in and of itself creates a potential conflict of interest. While certain account minimums are set for each advisory account Program, the IAR can elect to recommend a Program based on his or her understanding of and familiarity with the various services offered within a particular Program. Because each Program is unique and offers a different bundle of services, the standard advisory fee a client pays is allocated within HTS differently from one Program to another. The compensation received by the IAR is higher in some particular programs relative to others, and this compensation fluctuates based on certain minimum clearing or retention rates assigned by HTS. These clearing and retention rates are a component of, and not in addition to, the overall advisory fee paid, and generally are higher as a percentage of the overall advisory fee paid by the Client for smaller accounts. As a result, an IAR has a disincentive to recommend certain of the aforementioned Programs to Clients with smaller accounts that otherwise would meet the standard account minimum for each respective Program. Therefore, this creates a conflict regarding the achievable level of investment diversification a client may achieve. HTS receives financial remuneration from some market centers for certain orders routed and executed at that market center. HTS has entered into a clearing arrangement with an unaffiliated registered broker-dealer pursuant to which the broker-dealer clears transactions in certain mutual funds. This broker-dealer has established relationships with the mutual fund companies. The registered broker-dealer receives sub-transfer agent fees and shareholder servicing fees from the mutual fund companies or their affiliates for the shareholder, administrative and other recordkeeping services it provides, and passes all or a portion of these fees through to HTS. The sub-transfer agent fees and shareholder servicing fees vary by mutual fund company and are based on assets held in HTS Client Accounts. Unaffiliated broker-dealer passes through all the fees that they receive from the Funds and charge HTS a clearing fee based on the value of the assets. As a result, the fees reduce the fund’s net asset value and thus the value of an investment in the fund. Therefore, these fees are a form of indirect compensation paid by all investors in the mutual fund. Generally, whether HTS receives these fees is not dependent on the share class in which the client invests. HTS has an incentive to only offer mutual funds and other investments that make third party payments or enter into revenue sharing agreements with us.” HTS also has an incentive to recommend these investments to the client because the more client assets that invest in them the more payments and revenue HTS receives. These revenue-sharing payments create a conflict of interest because some mutual fund companies pay more than others, and HTS therefore has a financial incentive to choose mutual funds issued by Companies that pay it more than others, and this financial incentive could interfere with HTS’s fiduciary obligation to choose the best available investments for their clients. These revenue- sharing payments also create a conflict of interest because they create an incentive for HTS to invest the clients’ assets in mutual funds that pay these fees, rather than other types of investments (such as equities, bonds, or ETFs) or mutual funds that do Page | 45  not. HTS can only sell mutual funds issued by mutual fund companies with which HTS signs a selling agreement, and these revenue-sharing payments create a conflict of interest because HTS has a financial incentive not to sign selling agreements with mutual fund companies that do not make these payments, which in some cases as a result offer mutual funds with lower operating expense ratios. HTS intends, however, to make all recommendations independent of such fee consideration and based solely on HTS’s obligation to consider the client’s objectives and needs. The IAR of HTS does not share in these fees that may be received by HTS. Payments from Structured Product Sponsors. Purchases of Structured Products in the Co-Pilot Program are not charged any sales commissions; however, Clients who purchase Structured Products will pay certain offering costs associated with issuing, selling, structuring, and hedging the products. Such costs are paid to the issuer, and are included in the initial offering price, and disclosed in the offering documents. Therefore, the estimated value of the investment on the pricing date will be less than the original issue price. HTS receives a structuring fee from the issuer for the sale of the Structured Product. The structuring fee that HTS receives varies by product and sponsor, with a range of 0.25% or $2.50 per $1,000 dollars purchased to a maximum of 1.25% or $12.50 per $1,000 dollars purchased, thus the offering document should be consulted for additional details regarding the structuring fee for any single investment. Compensation to IARs Who Recommend Advisory Programs In general, HTS pays IARs cash compensation consisting of two components: a guaranteed monthly minimum draw required by applicable law, and production payout if it exceeds the monthly minimum draw. The production payout is a percentage of the product-related revenue that each IAR generates during that billing cycle with respect to the clients he or she serves, minus adjustments due to distributions from or the closing of the advisory account. The payout rate is generally based on production levels and ranges from 25% to 57.5%. HTS reserves the right, at HTS’s discretion and without prior notice, to change the methods by which HTS compensates the IAR and employees, including reducing and/or denying production payout and/or awards for any reason. Investment Advisory Programs: For HTS’s Investment Advisory Programs (asset-based fee programs) the payout rate is applied to the program fees credited to the IAR by HTS. Under certain circumstances some IARs or producing Branch Managers are compensated differently. Recruitment Compensation: In general, if the IAR is joining HTS from another firm, the client should discuss the reasons their IAR decided to change firms and any costs or changes in services the client incur by transferring their accounts to HTS. In many cases, HTS pays IARs financial incentives when they join and on an ongoing basis as described below. Many IARs who joined HTS are eligible to receive incentives, including loans, bonuses, and/or other compensation, if they reach certain asset and/or production levels or other targets. The amount paid to IARs under these arrangements is largely based on the size of the business serviced by the IAR at their prior firm and the IAR achieving a minimum percentage of their prior firm production and asset levels within a specific time period after joining HTS. These payments can be substantial and take various forms, including salary guarantees, loans, transition bonus payments, temporary or transitional grid increases in the portion of account fees paid to the clients IAR and various forms of compensation to encourage IARs to join HTS, and are contingent on the IAR's continued employment. Therefore, even if the fees the client pays at HTS remain the same or are less, the transfer of the assets to HTS contribute to the IAR's ability to meet such targets and to receive additional loans and/or compensation even if not directly related to the clients account or the fees the client pays to us. These practices create an incentive and a conflict of interest for the IAR to recommend the transfer of the clients account assets to HTS since a significant part of the IAR's compensation is often contingent on the IAR achieving a pre-determined level of revenue and/or assets at HTS. The client should carefully consider whether their IAR's advice is aligned with their investment strategy and goals. Awards: IARs are generally eligible to qualify for strategic objective awards and recognition programs, which are based on production and other criteria as determined by HTS. Page | 46  Funding the Account The client may fund an advisory account by depositing cash and/or eligible securities designated as “eligible” for Program accounts. The Destinations Program Account must be funded by cash/check for all new purchases. Class A shares used to fund accounts subsequent to the Share Class Conversions will be converted, on a tax- free exchange basis (subject to availability of that service by the mutual fund sponsor), to the new share class available for the relevant fund. If the client funds the account with securities, they authorize and direct HTS, as applicable given the terms of their program, to liquidate those securities on the behalf of the client and to allocate the proceeds in accordance with their selected investment style. HTS will not advise the client regarding the liquidation of these securities. HTS will execute those transactions free of commission charges; however, depending on the type of security involved, those liquidations can result in the client incurring redemption charges and taxable gains or losses. The client should review the potential tax consequences of these liquidations with their tax advisor before funding the account with securities. When liquidating these securities for purposes of establishing the account, HTS will be acting as the client’s broker, not the Investment Adviser. Liquidations will be affected promptly after acceptance of the account at the then prevailing market prices. HTS will not be responsible for the liquidations and any consequences due to the Clients failure to notify HTS of other existing security holdings, the overall effect of liquidations once effected, or the loss of potential gains due to movements in the market prices or changes in market conditions. Securities that are ineligible for an HTS program should be transferred to a brokerage account. If immediately prior to funding an Advisory account, the client chooses to liquidate eligible and/or ineligible securities to fund an account with the cash proceeds, those liquidations will not be subject to commission charges or if charged, commissions will be reversed. For Programs that offer mutual funds, HTS will provide the client with mutual fund prospectuses and other fund information as the client may reasonably request to assist in completing appropriate forms for purchases, redemptions, account designations, address changes and other transactions involving these investments. Class A shares are available for mutual funds that do not offer Institutional or Advisory share classes or that declined to make those shares available in the Programs. Class A shares normally impose a shareholder servicing fee, commonly referred to as a 12b-1 fee, which the client pay directly to the fund company. These fees will be rebated to the account in most Programs. The Class A shares available in the Programs do not impose a load or sales charge at the time of purchase; however, because most Institutional or Advisory share classes do not impose a 12b-1 fee shareholder servicing fee, these share classes are usually more cost effective than the Class A shares. As part of its fiduciary duties to clients, HTS endeavors at all times to put the interests of its advisory clients first. The client should be aware, however, that the receipt of economic benefits by HTS (or its related persons) in and of itself creates a potential conflict of interest. Funding the account with Securities/Commissions Lookback Securities trades executed 30 days prior to the date the client signed the account agreement, should not include commissions or sales credits. Any securities trades in the previous 30 days that have had commission charges must be canceled and rebilled to reflect that no charges were made to the customer. Mutual funds, unit investment trusts and other products with a sales load that have not been held for the previous 12 months are not eligible for Program accounts. The positions should not be liquidated prior to approval in expectation of acceptance into the program. These positions will be reviewed for eligibility on a case-by-case basis by HTS Wealth Management Supervision and ASG. If not approved, these positions will need to be kept in a separate brokerage account until the full 12 months has passed or be marked as Unsupervised Assets and will stay in the account but not part of the billing calculation util the lookback period has expired. This will not apply to positions that transfer into the account from other firms. For the Destinations Program all eligible securities must be liquidated to fund the account. Page | 47  Tailoring of Advisory Programs and Reasonable Restrictions For all advisory programs sponsored by HTS, the client will select the IAR with whom they wish to work with. The IAR will assess prior investment experience, financial goals, time, horizon, risk tolerance and investment objectives to determine the appropriate program. The client may request that reasonable restrictions be imposed on the management of their account. Reasonable restrictions generally include the designation of particular securities or types of securities that should not be purchased for the account. If the restrictions are unreasonable or if HTS, or the IAR, believes that the restrictions are inappropriate, HTS has discretion to remove the clients account from the Program. In some cases, HTS has discretion to liquidate preexisting positions in the portfolio immediately and bring the Account into conformity with the Clients target allocations so if the Client wishes to hold certain positions for tax and investment purposes, they should consider holding these positions in a separate account or request to be held as an unsupervised asset. Under certain circumstances, the clients IAR can temporarily place certain restrictions on securities for the purpose of model rebalancing. This is for portfolio trading purposes only. Cash Sweep For all Programs, cash or money market investments will be included in the determination of the Account Value. Effective March 6, 2023, HTS implemented certain changes to the cash sweep program. Specifically, HTS no longer offers money market mutual funds (“MMMF”) as a sweep option for excess cash held in customer accounts. Instead, excess cash balances will be invested, upon affirmative written consent from the Client, only in our Bank Insured Deposit (“BID”) Program, BID a service provided by HTS to its customers which offers the Client the option of transferring excess cash balances in their securities accounts to our BID program, which is an account (“Sweep Account”) at a bank or credit union whose deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) or the National Credit Union Administration (“NCUA”), as applicable, up to applicable FDIC and NCUA limits. A sweep of excess cash allows the Client to earn interest on those funds from Participating Banks while retaining the flexibility to quickly access that cash to purchase securities or withdraw it. To participate in the HTS BID program, the client must select a sweep upon account opening by affirmative written consent. If participation is declined in the BID program, or if the account is otherwise ineligible to participate, the excess cash balances must be retained in an interest-bearing Securities Investor Protection Corporation (“SIPC”) insured credit interest program (“CIP”) account held at HTS. Unlike cash accounts, retirement accounts are required to participate in a sweep account program by affirmative written consent prior to account opening. Retirement accounts may not select CIP. For existing accounts, the Client should notify their Investment Adviser Representative (“IAR”) if they wish to sweep cash balances to the BID program. HTS may temporarily suspend or discontinue the sweep program at any time and without advance notice to Clients. HTS may change the BID program terms and conditions (“BID Program Terms and Conditions”), or change the timing or frequency of the sweep, by giving the client thirty (30) days prior written notice to the extent possible. If HTS fails to sweep excess cash balances in the manner described in the Customer Information Brochure, HTS’s liability is limited to the actual amount of interest the client would have earned had the sweep been performed. HTS may automatically sweep funds from the Client’s Sweep Account to an Advisory Program account anytime without advance notice to clients to pay for securities transactions and withdrawal requests, satisfy a debit balance, settle any other obligation owed to HTS, pay a margin loan, provide necessary collateral in a margin account, or for any other permissible purposes. Should the client wish to access these funds or information regarding the BID program rates, the client should contact their IAR. With ongoing changes to the interest rates paid by Participating Banks under the BID program, the client’s personal financial circumstances, and market conditions, Clients should always consider all of their investment options Available SIPC Coverage HTS is a member of SIPC, which protects securities customers of its members against the loss of cash and securities up to $500,000 (including a $250,000 limit for claims for cash). An explanatory brochure is available at www.sipc.org or by calling 202.371.8300. In addition, HTS has purchased Excess SIPC Insurance which covers the net equity of customers’ accounts up to an aggregate of $200 million from underwriting syndicates at Lloyd’s of London. The customer securities component, which restricts coverage with respect of any one Page | 48  customer, will be a maximum of $25,000,000 in coverage for securities, with the aggregate coverage of cash set at $900,000. SIPC and Excess SIPC covers accounts of the member firm in the event of a member’s bankruptcy or insolvency. Coverage does not apply to losses due to market fluctuation or to any decline in the market value of securities in an account. It is important that Clients understand the unique nature, insurance coverage and risk associated with each type of account and account category. SIPC coverage does not protect cash balances created and maintained solely for the purpose of earning interest, so funds in CIP accounts must be intended for future reinvestment. Bank Insured Deposit Program The BID program is a program that sweeps excess cash to Sweep Accounts at FDIC-insured Participating Banks in increments of $250,000 (the current standard maximum deposit insurance amount (“SMDIA”) per insurable capacity under FDIC rules). Subject to satisfaction of certain conditions, fund swept to each Participating Bank will be eligible for pass-through deposit insurance coverage will be equal to the SMDIA (currently $250,000 per insurable capacity) multiplied by the number Participating Banks at which funds are deposited (the “Maximum applicable FDIC Amount for an individual accountholder, or an individual owner of a joint account, would be $5 million ($250,000 multiplied by 20). And the combined Maximum Applicable FDIC Amount for accountholders of a joint account with two individual owners would be $10 million ($500,000 multiplied by 20). The actual Maximum Applicable DFDIC Amount will depend on the number of Participating Banks in the BID program at any given time excluding any Participating Banks in which a client elects not have funds swept. The FDIC insures bank deposit accounts such as checking, interest-bearing checking and savings accounts, money market deposit accounts, and certificates of deposit (CDs) if an insured bank or savings association fails. Bank deposits are generally insured up to $250,000 (the current SMDIA) per insurable capacity for all funds held by a bank for a client, including both funds deposited through the BID program and funds that a client may have on deposit at a bank outside of the BID program, while the IRA and other qualifying self-directed retirement funds on deposit are separately insured up to $250,000. The FDIC does not insure the money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if the client purchased those products from an insured bank. Accounts and funds held at a Participating Bank by a client in the same capacity outside of the BID program and any funds swept to the Participating Bank through the BID program are combined for purposes of determining FDIC insurance coverage. This, if a client has funds on deposit at a Participating Bank outside of the BID program, and $250,000 of the total deposits would be eligible for pass-through FDIC deposit insurance and amounts in excess of $250,000 held at the Participating bank would not be insured. If a client has deposits at a Participating Bank that were made outside of the BID program, the client should notify their IARE and elect not to have funds placed at such Participating Bank through the BID program. The client is solely responsible for monitoring the client’s total deposits at a Participating Bank, including deposits through the BID program and deposits outside of the BID program. Additional information regarding FDIC coverage is available at www.fdic.gov. The Client should consult their IAR, as certain types of accounts may not be eligible to invest in the BID program. As discussed in the BID Program Terms and Conditions, the BID program pays different rates of interest based on six different deposit tiers. The amount of interest paid will be determined by the amount of interest paid by the banks participating in the program, minus the amount of fees charged by us, as broker-dealer or custodian. The tiers are currently as follows: Tier Deposit Level Tier 1 $0 to $49,999.99 Tier 2 $50,000 to $249,999.99 Tier 3 $250,000 to $499,999.99 Tier 4 $500,000 to $999,999.99 Tier 5 $1,000,000 to $2,999,999.99 Tier 6 $3,000,000 or more Page | 49  information about Clients may obtain copy of the BID Program Terms and Conditions are available from their IAR. For information about current rates paid by Participating Banks in the BID Program, please discuss with an HTS IAR. Additional is available at our website at the BID program www.hilltopsecurities.com/disclosures/sweep-account-disclosure, or from an HTS IAR. The applicable interest rate tier will be determined based on the amount of cash available in the Client’s Advisory Program account on a per account basis. Cash available in one Advisory Program account will not be aggregated to include cash which may be contained in other Advisory Program accounts the Client holds with the Firm for purposes of qualifying for a higher interest rate tier. In other words, the amount of cash available in each specific Advisory Program account can only be used to qualify for one individual interest rate tier under the BID program. Interest on funds in a Sweep Account at a Participating Bank is accrued daily, compounded monthly and credited to accounts monthly. Interest begins to accrue on the date of deposit in the bank up to, but not including the date of withdrawal. The daily balance method is used to calculate the interest on these accounts. The daily rate is 1/365 of the applicable interest rate. Sweep Account rates are set in accordance with other bank products and may be changed at any time. The rate of return paid on funds invested in a Sweep Account at a Participating Bank may vary from the rates of return available to depositors making deposits with the Participating Bank directly, through other types of accounts at HTS, or with other depository institutions in comparable accounts. The Client should compare the terms, rates of return, required minimum amounts, charges and other features with other accounts and alternative investments. HTS anticipates receiving fees, including fees for administrative services (“Program Fees”) and other financial benefits, for providing sweep funds to the Participating Banks in the BID program. HTS anticipates that its affiliate, PlainsCapital Bank, will receive a financial benefit from the use of sweep funds, such as net interest income. The Participating Banks pay a total all-in cost of funds (“TAICF”) based on deposits held at the Participating Bank through the BID program. The TAICF consists of the interest payable to clients on their deposits in a Sweep Account, and the fee paid to HTS. HTS has a material conflict of interest with respect to the BID program because the Participating Banks in the BID program (including PlainsCapital) have discretion in determining the TAICF to pay on Sweep Account deposits, and HTS has discretion in determining how much of that bank interest rate is paid to customers in the program, and how much of the bank interest rate to retain itself as a Program Fee. The Participating Banks (including PlainsCapital) have a financial interest in paying a lower TAICF so that their net interest income is increased, and HTS has a financial incentive to retain a higher portion of the TAICF as a Program fee (resulting in a lower rate paid to customers). HTS does not share any portion of the Program Fee paid to HTS with HTS IARs. HTS contracts with a third-party to provide administrative services for the BID program. Certain selected affiliated and unaffiliated Participating Banks will receive priority in receiving BID program balances for overnight deposits and/or short-term deposits. HTS at times will maintain a reserve account with an affiliated and/or unaffiliated Participating Bank. Complete BID Program disclosures and a list of the participating banks available in the BID program are available at https://www.hilltopsecurities.com/disclosures/sweep-account-disclosure. Also, complete sweep account disclosures are contained in HTS’s Customer Information Brochure. Similarly, HTS has discretion concerning the amount of interest to pay, if any, on cash swept to free credit balances held at HTS, and HTS has a conflict of interest in determining this interest rate because a lower or no interest rate paid to customers on free credit balances results in greater revenue for HTS. HTS does not share any revenue received in connection with free credit balances with its IARs. HTS also offers money market mutual funds (of various share classes) to customers on a position- traded basis, which is to say, by having the customer’s IAR place individual buy or sell orders for those funds, not on an automated sweep basis. Some of these position-traded money market mutual funds offer higher yields to customers than the BID program or free credit balance and pay lower or no fees to HTS. HTS has a conflict of interest with respect to the decision whether to allow customer cash balances to be swept automatically to its sweep funds, or to be position-traded into other money market mutual funds that are higher-yielding to customers but pay lower or no fees to HTS. HTS also has a conflict of interest with respect to all sweep options because the revenue it earns from those seep options may give it an incentive to increase the amount of a client’s assets allocated to cash as compared to other investments. For more information relating to these money market mutual funds, the Client should discuss with their IAR and refer to the fund’s prospectus for more detailed Page | 50  information. When the funds in a client account exceed the Maximum Applicable FDIC Amount, then any such excess funds will be invested in the Dreyfus Government Cash Money Market Fund Investor Class (DGVXX). The investor share class does not charge 12b-1 fees but do include shareholder servicing fees and other fees and may be more expensive than other share classes of the same fund that are available to our Advisory Customers. The use of higher cost share class of money market mutual funds than may otherwise be available to the Customer, and the use of money market mutual funds that pay shareholder servicing and other fees instead of other money market funds that do not pay these fees, are conflicts of interest on the part of HTS. prospectus can be obtained by contacting an HTSIAR or via our website DGVXX, which is only available for account balances in excess of the Maximum Applicable FDIC Amount, is registered with the SEC pursuant to the Investment Company Act of 1940 and treated as a security. Please note that DGVXX is not FDIC-insured, not guaranteed by the federal government, and is not a deposit or obligation of any bank or guaranteed by any bank. There can be no assurance that this or any money market fund will be able to maintain a stable net asset value of $1.00 per share. See the DGVXX money market fund prospectus for more complete information, including terms, management fees, prevailing rates, and expenses. at A www.hilltopsecurities.com/disclosures/sweep-account-disclosure. Clients should consider the fund’s investment objectives, risks, and expenses carefully before investing. HTS has arrangements to receive compensation in the form of servicing fees and other fees, and other compensation based on assets invested in DGVXX. This compensation is not shared with the HTS IARs. The Firm anticipates receiving fees, including fees for administrative services, and other financial benefits for providing sweep funds on deposit with the BID program. Free Credit Balances Free credit balance refers to the amount of cash held in a client account resulting from sales of securities, dividends, interest, deposits or otherwise, which is free from any withdrawal restrictions. Free credit balances are held by HTS and are payable to the Client on demand. HTS uses their customers’ free credit balances to earn interest and other compensation, to the extent permissible under Rule 15c3-3 of the Securities Exchange Act of 1934. HTS considers free credit balances to be temporarily held in Client accounts for the purpose of reinvestment or otherwise being held awaiting investment. HTS may, but is not required to, pay interest on the free credit balances. As such, free credit balances should not be held by the Client solely for the purpose of earning interest. Clients are responsible for monitoring their free credit balances to determine whether a sweep program offered by HTS would be more appropriate for them. As discussed above, HTS has a conflict of interest when determining the interest rates it pays on free credit balances. Interest is calculated daily based on the free credit balance in the account as of the close of business the prior business day. Interest is then credited to a client account on a monthly basis. Interest rates are subject to change at any time and without notice based on a number of internal and external factors including current market conditions, interest rates, and other market factors. For current rates on Free Credit Balanced, please discuss with an HTS IAR, or visit our website: www.hilltopsecurities.com/disclosures/sweep-account-disclosure. Limitation on Security Type Except as may be provided in connection with the Sweep Program, in general, participating Investment Managers in the Endeavor, Compass UMA, Momentum Pathways UMA, Passport Series SMA and the Explorer Programs may not directly invest assets in cash equivalent securities or instruments such as money market securities. The Client should discuss with their IAR the sweep and position-traded money market mutual fund options available in the Aviator, Co-Pilot and Navigator UMA Programs. Page | 51  Account Requirements and Types of Clients The minimum initial account values for the Programs described in this Disclosure Brochure are listed below. HTS has discretion to terminate any Program account if they fall below the minimum Account Value guidelines established by HTS. Under certain circumstances, HTS has discretion to grant an exception to the minimum Account Value. Program Name Minimum Account Size Financial Planning/ Consulting Aviator and Co-Pilot Compass UMA Passport Series SMA Gateway FSP Momentum Pathways UMA Endeavor Foundation Endeavor Flagship Endeavor Hilltop Models Navigator UMA Destinations Fee Based Annuity No Minimum $30,000 $25,000 $100,000 (Subject to Managers Minimum) $25,000 (Subject to Managers Minimum) $100,000 (Subject to Managers Minimum) $2,000 $10,000 $25,000 $30,000 $25,000 Types of Clients HTS generally provides investment advisory services for individuals, individual retirement accounts (“IRAs”), banks and thrift institutions, pension, and profit-sharing plans, including plans subject to ERISA, trusts, estates, charitable organizations, state and municipal government entities, corporations, and other business entities. HTS can prohibit anyone or any account type from establishing a Program account for any reason, including if it is determined not to be an appropriate investment strategy for the client. The minimum initial Account Values for the Programs described in this document are listed above. HTS has discretion to terminate any Program account if they fall below the minimum Account Value guidelines established by HTS. Under certain circumstances, HTS has discretion to grant an exception to the minimum account value requirement. Conflicts of Interest Conflicts of interests can arise with respect to a variety of business and other relationships in almost any investment advisory program. When HTS acts as the client’s Investment Adviser, HTS and the IARs earn more when the client invests more in their advisory account, and both will earn the same advisory fee rate regardless of how frequently the client trades. HTS also receive payments from affiliated and unaffiliated third parties, including the investment products in which the client invests, and their sponsors. These third- party fees are disclosed in this HTS’s ADV Brochure and the investment product’s prospectus and other offering documents. Please refer to the “Other Financial Industry Activities and Affiliations” below for discussion of conflicts of interest relationships and product- specific compensation that is received by HTS. Review of Accounts Program Services include periodic reviews and monitoring of the clients account by their IAR. In addition, monthly and/or quarterly reviews are conducted by HTS Wealth Management Supervision. For clients of IARs registered through HTS, trading activity is reviewed on a daily basis by the Branch Manager or designee assigned to the IAR. Other reviews, as deemed appropriate, are conducted by Wealth Management Supervision, ASG, the Branch Manager or designee. IARs registered through HTS conduct reviews on at least an annual basis, which can provide an opportunity for the client to update HTS with any material changes in their financial condition, risk tolerance, objectives, and/or investment restrictions. Client Reports Clients receive written or electronic custodial account statements monthly if there is activity, or quarterly in the absence of activity. Confirmations of all securities buy/sell transactions. In addition, performance reports are available upon request. The Insurance Carrier will provide all statements and confirmations for the Destinations Program. Page | 52  Performance Based Fees HTS does not charge for performance-based fees in any of its managed account programs. Methods of Analysis and Investment Strategies and Risk of Loss Additional information relating to HTSPM Methods of Analysis, Investment Strategies and Risk of Loss are detailed above in this brochure. Investment Manager Selection and Evaluation The specific methods of analysis used, and Investment Strategies for each Program are described under each program. HTS uses the following investment strategies, as appropriate, when managing or making recommendations for Program Accounts: Long-term Purchases Where appropriate, HTS employs a long-term investment strategy when formulating the investment advice given to clients. This entails the purchase of securities with the idea of holding them in the clients account for a year or longer. This occurs when HTS believes the securities to be currently undervalued. This also applies when HTS wants exposure to a particular asset class over time, regardless of the current projection for this class. A risk in a long-term purchase strategy is that, by holding the security for this length of time, HTS does not take advantages of short- term gains that could be profitable to the client. Moreover, if HTS’s assumptions are incorrect, a security could decline sharply in value before HTS makes the decision to sell. Short-term Purchases Where appropriate, HTS also purchases securities with the idea of selling them within a relatively short time, typically a year or less. HTS does this in an attempt to take advantage of conditions that are believed will soon result in a price swing in the securities purchased. A risk in a short-term purchase strategy is that, should the anticipated price swing not materialize, HTS is left with the option of having a long-term investment in a security that was designed to be a short-term purchase, or potentially taking a loss. In addition, this strategy involves more frequent trading than does a longer-term strategy, and results in increased brokerage and other transaction- related costs, as well as less favorable tax treatment of short-term capital gains. Short Sales A short sale is a transaction in which the client sells a security they do not own. HTS borrows shares of a stock for the client’s portfolio from someone who owns the stock on a promise to replace the shares on a future date at a certain price. HTS then sell the shares HTS has borrowed. On the agreed-upon future date, HTS buys the same stock and returns the shares to the original owner. HTS engages in short selling based on HTS’s determination that the stock will go down in price after HTS has borrowed the shares. If the stock has gone down since HTS purchased the shares from the original owner, the client keeps the difference. There are certain costs associated with the securities that HTS borrows on the clients’ behalf, and they agree to pay such costs. One risk in selling short is that losses are theoretically unlimited. HTS is obligated to repurchase the stock no matter how much the price has climbed. In addition, even if HTS is correct in determining that the price of a stock will decline, HTS runs the risk of incorrectly determining when the decline will take place. Short selling has greater risks in times of inflation, as prices adjust upwards regardless of the relative value of the stock. For more information relating to risks and costs of short sales, please refer the Hilltop Securities Customer Information Brochure. Margin Leverage strategies, such as using margin, are desirable in some cases but are generally not recommended for Advisory accounts. If the account is approved for margin trading, the client could be required to deposit additional securities or cash on short notice to maintain the position and/or to maintain sufficient assets to meet HTS’s requirements. If the client does not meet requirements in the required time frame, HTS has discretion to liquidate all or a portion of the holdings. The client will be liable for any resulting deficit in the account. Margin trading can work against the client, for example, larger losses as well as the potential for larger gains. Before the client begin using margin, please read the “Margin Disclosure” brochure available from the IAR. Page | 53  Maintaining a margin account balance will also increase the wrap fee to the extent of the margin exposure. It is important that the client fully understand the risks involved in trading securities on margin. These risks include but are not limited to the following: • The client can lose more funds than the client deposit in the margin account. • HTS can force the sale of securities or assets in the account and in some cases without contacting the client. • The client will pay interest on the outstanding margin loan balance. • The use of margin can have a positive or negative performance affect, net of interest charges and other account fees that likely will be greater as a consequence of using margin. As a result, gains or losses in a leveraged managed account are likely to be greater than would be the case with an unleveraged managed account. As explained in the Margin Disclosure brochure, HTS has discretion when setting the interest rate for the margin balance, and HTS earns more revenue the higher it sets this interest rate. This creates a conflict of interest because HTS has a financial incentive to charge the client higher-than-market- rate interest rate for margin loans. HTS has the right to loan to third parties the securities pledged to secure the margin balance, HTS earns revenue from these loans, and HTS retains all of this revenue. This creates a conflict of interest because HTS has the ability to determine which securities will be pledged to secure the debit balance, and HTS has a financial incentive to loan the securities that will result in the greatest level of revenue for HTS. For more information relating to risks and costs of margin, please refer to the HTS Customer Information Brochure. Options Certain types of option trading are permitted in order to generate income or hedge a security held in certain Program Accounts; namely, the selling (writing) of covered call options or the purchasing of put options on a security held in the Program account. The client should be aware that the use of options involves additional risks. The risks of covered call writing include the potential for the market to rise sharply. In such case, the option counterparty has the right to call away the security and the Program account will no longer hold the security. The risk of buying long puts is limited to the loss of the premium paid for the purchase of the put if the option is not exercised or otherwise sold by the program account. Options involve risk and are not suitable for all investors. The client should read "Characteristics and Risks of Standardized Options" brochure provided by their IAR. There are costs associated with options trading, and the client agrees to pay such costs. Risk of Loss The client should understand that all investments involve a certain amount of risk. Investment performance can never be predicted or guaranteed and that the values of the accounts will fluctuate due to market conditions and other factors. The client should also understand that HTS makes no representations or warranties with respect to the present or future level of risk or volatility in, or the future performance of, the account. The client should further understand that the client is assuming the risks involved with investing in securities and other investment products and should understand that the client could lose all or a portion of the amount held in the account(s). Below are some of the common risks the client should consider prior to investing. This list is not a complete enumeration or explanation of the risks involved, and the client should consult with the IAR and the legal and tax advisers before investing in any particular strategy. • Market Risks: The prices of, and the income generated by, the common stocks, bonds, and other securities the client owns can decline in response to certain events taking place around the world, including those directly involving the issuers; conditions affecting the general economy; overall market changes; local, regional, or global health, political, social, or economic instability; governmental or governmental agency responses to economic conditions; and currency, interest rate, and commodity price fluctuations. • Asset Allocation and Diversification Risk: The performance of Accounts is dependent on the allocation of securities among various asset classes and the selection of underlying Funds. There is a risk that IAR’s decisions regarding asset allocation and the selection of investments will cause an Account’s performance to lag relevant benchmarks or will result in losses. While allocations to multiple asset classes can reduce risk, risk cannot be completely eliminated with diversification. Asset allocation and diversification do not guarantee a profit Page | 54  or protect against loss. • Long-Term Purchases Risk: IARs often recommends that clients purchase investments with the intention of holding them for one year or longer. This recommendation is often because the IAR believes the investments to be undervalued at the time of purchase and/or because IAR chooses to recommend exposure to a particular asset class over time, regardless of the current projection for such class. A risk of a long-term investment strategy is that by holding an investment for a longer period of time, the client is not be able to take advantage of potential short-term gains. Moreover, if the analysis is incorrect, an investment can decline sharply in value before it is sold. • Volatility and Correlation Risks: Clients should be aware that the IAR’s asset selection process is based in part on a careful evaluation of past price performance and volatility in order to evaluate future probabilities. However, it is possible that different or unrelated asset classes exhibit similar price changes in similar directions, which can adversely affect Client and become more acute in times of market upheaval or high volatility. Past performance is no guarantee of future results, and any historical returns, expected returns or probability projections do not reflect actual future performance. • Fixed Income: Bonds offer return of principal if held to maturity, but any bond remains subject to the creditworthiness of the guarantor and, prior to maturity, the bond is subject to interest rate, inflations, and credit risks. • Credit Risk: Changes in the financial condition of an issuer or counterparty and changes in specific economic or political conditions that affect a particular type of security or issuer can increase the risk of default by an issuer or counterparty, which can affect a security’s or instrument’s credit quality or value. Lower quality debt securities and certain types of other securities involve greater risk of default or price changes due to changes in the credit quality of the issuer. • • Municipal Bond Risk: The municipal market can be affected by adverse tax, legislative, or political changes and the financial condition of the issuers of municipal securities. Municipal funds normally seek to earn income and pay dividends that are expected to be exempt from federal income tax. If a fund investor is a resident in the state of issuance of the bonds held by the fund, interest and dividends are sometimes exempt from state and local income taxes. Income exempt from regular federal income tax (including distributions from tax-exempt, municipal, and money market funds) are sometimes subject to state, local, or federal alternative minimum tax. Certain Funds normally seek to invest only in municipal securities generating income exempt from both federal income taxes and the federal alternative minimum tax; however, outcomes cannot be guaranteed, and the Funds sometimes generate income subject to these taxes. For federal tax purposes, a fund’s distributions of gains attributable to a fund’s sale of municipal or other bonds are generally taxable as either ordinary income or long-term capital gains. Redemptions, including exchanges, can result in a capital gain or loss for federal and/ or state income tax purposes. Tax code changes could impact the municipal bond market. Tax laws are subject to change, and the preferential tax treatment of municipal bond interest income could be removed or phased out for investors at certain income levels. International/Global Securities Risk: expose the investor to currency risk and political, social, and economic risks of the countries in which the securities are domiciled, in addition to the equity or debt nature of the securities involved. • Pooled Investments Risk: Certain strategies invest in one or more pooled investment funds including mutual funds, ETFs, UITs Real Estate Investment Trusts, etc. The client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the company associated with the investment. • Market Trading Risks: Exchange Traded Funds/Notes face various market trading risks. These include the potential lack of an active market for Fund shares, losses from trading in Page | 55  the secondary markets, periods of high volatility and disruption in the creation/redemption process of the Fund. As a result of any of these factors, among others, the Fund’s shares can trade at a premium or discount to the NAV. For additional information please refer to the Fund’s prospectus for more specific market trading risk. • Legislative and Regulatory Risk: Investments in the clients Account can be adversely affected by new (or revised) laws or regulations. Changes to laws or regulations can impact the securities markets as a whole, specific industries and individual issuers of securities. The impact of these changes is not always known for some time. • Liquidity Risk: Liquidity is the ability to readily convert an investment into cash. Generally, assets are more liquid if many traders are interested in standardized products. There is a greater degree of illiquidity in those non-standardized products such as Alternatives, Structured and other products that are redeemed by the issuer’s acceptance of a tender offer. • Structured Products Risks: Structured products are a hybrid between two asset classes (typically in the form of a note or CD) but instead of having a pre-determined rate of interest, the return is linked to the performance of an underlying asset class. Investing in structured products involves special risks, including, but not limited to, risks associated with derivative instruments. Other risks may include market risk, management and securities selection risk, investment objective and asset allocation risk, equity market risk, fixed income securities risk, credit risk, foreign issuer and investment risk, emerging market risk, commodities risk, and currency risk. Structured products are complex investments and involve special risks. As a result, these may not be suitable for all investors. • Alternative Investment Risks: Generally speaking, alternative investments employ various investment strategies for hedging and other speculative purposes and may also utilize techniques such as short selling, leverage, derivatives, and options, which can increase volatility and magnify the risk of investment loss. Alternative investments are therefore considered speculative and may involve a high degree of risk. These risks are potentially greater than and different from those associated with traditional equity or fixed income investments. Concentration in a few alternative investments further magnifies these risks. Please refer to the offering documents and/or prospectus and discuss the associated risks further with a HTS’s IAR. Alternative investments, including hedge funds, private equity, alternative mutual funds, non-traditional ETFs, managed futures, real estate investments, private credit and interval funds may present unique risks, such as decreased liquidity and transparency and increased complexity. The use of derivatives involves multiple risks. In addition, to the extent the alternative investment uses commodities as part of its investment strategy, the investment return may also vary as a result of fluctuations in the supply and demand of the underlying commodities. Real estate and related investments will be subject to risks generally related to real estate, including risks specific to geographic areas in which the underlying investments were made. Certain alternative investments may be less tax efficient than others. Each alternative investment is typically subject to internal fees including but not limited to management and/or performance fees, which affect the investments’ net asset value and reduce the return that the Client will realize with respect to the investment. Additional risks may include, but are not limited to, style-specific risk, credit risk and lower quality debt securities risk, equity securities risk, financial services companies’ risk, interest rate risk, non-diversification risk, small and mid-cap company risk and special risks of mutual funds and/or ETFs. • Cybersecurity Risk: With the increased use of technologies to conduct business, corporate and personal technology are susceptible to information security and related risks. In general, cyber incidents can result from deliberate attacks or unintentional events and arise from external or internal sources. Cyberattacks include but are not limited to gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information; corrupting data, equipment, or systems; or causing operational disruption. Cyberattacks are also carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make network services unavailable to intended users). Cyber incidents affecting HTS, its affiliates or IARs, or any other service providers (including, but not limited Page | 56  to accountants, custodians, transfer agents, and financial intermediaries used by a fund or an account) have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the ability to calculate net asset value (“NAV”), impediments to trading, the inability to transact business, destruction to equipment and systems, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. Similar adverse consequences could result from cyber incidents affecting issuers of securities in which an Account invests, counterparties with which an entity engages in transactions, governmental and other regulatory authorities, exchange and other financial market operators, banks, brokers, dealers, insurance companies and other financial institutions (including financial intermediaries and service providers), and other parties. • Digital Assets Risk: Digital assets represent a new and rapidly evolving industry. The value of digital assets depends on the acceptance of the digital assets, the capabilities and development of blockchain technologies and the fundamental investment characteristics of the digital asset. Digital asset networks are developed by a diverse set of contributors and the perception that certain high-profile contributors will no longer contribute to the network could have an adverse effect on the market price of the related digital asset. Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets could have an adverse effect on the market price of such digital assets. A substantial direct investment in digital assets may require expensive and sometimes complicated arrangements in connection with the acquisition, security and safekeeping of the digital asset and may involve the payment of substantial acquisition fees from third party facilitators through cash payments of U.S. dollars. Because the value of digital assets may be correlated with the value of Bitcoin, it is important to understand the investment attributes of, and the market for, the underlying digital asset. The Client should consult with their IAR. Investments in digital assets are speculative investments that involve high degrees of risk including a partial or total loss of invested funds and are not suitable for any investor that cannot afford loss of the entire investment. • Conflicts of Interest Risk: Sponsors of investment products may engage in business practices that conflict with the interests of investors in their products. These practices can have a negative impact on the market price of the investment products. Clients are encouraged to review the prospectus or other disclosure documents for the investment product and also discuss with their IAR the risks that may apply to them. • • • Equity Securities Risk: Strategies that invest in equity securities are subject to the risk that stock prices may fall over short or extended periods of time. Equity markets tend to move in cycles, and the value of each strategy’s equity securities may fluctuate drastically from day-to-day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. These factors contribute to price volatility, which is the principal risk of investing in the strategies that are offered. Interest Rate Risk: Fixed income securities increase or decrease in value based on changes in interest rates. If rates increase, the value of these investments generally decline. On the other hand, if rates fall, the value of the investments generally increases. Securities with greater interest rate sensitivity and longer maturities generally are subject to greater fluctuations in value. Variable and floating rate securities are generally less sensitive to interest rate changes than fixed rate instruments, but the value of variable and floating securities may decline if their interest rates do not rise as quickly, or as much, as general interest rates. Many factors can cause interest rates to rise or fall. Some examples include the Central Bank Monetary Policy (such as an interest rate increase/decrease by the Federal Reserve), rising inflation rates and general economic conditions. Inflation Risk: The risk is that the rate of inflation will exceed the rate of return on an investment. The investment value itself does not decline but its relative value does. • Default Risk: An issuer’s inability to remain solvent an pay any outstanding debt obligations in a timely manner. Adverse changes in the creditworthiness of the issuer (whether or not reflected in Page | 57  changes to the issuer’s rating) can decrease the current market value and may result in a partial or total loss of an investment. • Mid Cap and Small Cap Company Risk: The securities of mid or small cap companies may be subject to more abrupt or erratic market movements and may have lower trading volumes or more erratic trading than securities of larger sized companies or the market averages in general. • Emerging Markets Risk: International investing bears greater risk due to social, economic, regulatory, and political instability in countries in “emerging markets.” Emerging market securities can be more volatile and less liquid than developed market securities. Changes in exchange rates and differences in accounting and taxation policies outside the U.S. can also affect returns. Investments in foreign currencies and foreign issuers are subject to additional risks, including political and economic risks, greater volatility, civil conflicts and war, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, expropriation, and nationalization risks, and lets stringent investor protection and disclosure standards. These risks are magnified in countries in “emerging markets.” • Environmental, Social and Governance Consideration Risk: ESG risk is the potential losses or negative impacts that can result from investing in companies, assets, or industries that do not align with environmental, social, and governance principles and market trends. Consideration of ESG factors in the investment process may cause an IAR or manager to forgo opportunities to recommend or invest in certain companies or to gain exposure to certain industries or regions. There is a risk that, under certain market conditions. A strategy pursuing strategies that consider ESG factors may underperform strategies that do not consider such factors. • Government Obligation Risk: Client assets may be invested in securities issued, sponsored, or guaranteed by the U.S. Government, its agencies, and instrumentalities. However, no assurance can be given that the U.S. Government will provide financial support to U.S. Government-sponsored agencies or instrumentalities where it is not obligated to do so by law. For instance, securities issued by the Government National Mortgage Association (Ginnie Mae) are supported by the full faith and credit of the federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) have historically been supported only by the discretionary authority of the U.S. Government. While the U.S. Government provides financial support to various U.S. Government-sponsored agencies and instrumentalities, such as those listed above, no assurance can be given that it will always do so. • Quantitative Strategy Risk: Quantitative analysis uses complex mathematical models and statistics to analyze past events to make investment decisions about security performance (or larger market movements) in the future. Common risks encountered in using quantitative analysis are that the models used are based on assumptions that prove to be incorrect, and that the underlying sets of historical data utilized by the manager are incomplete. • Technical Strategy Risk: Technical analysis involves the use of statistical data, and trends in that data, to identify trading opportunities. Technical analysis does not consider the underlying financial condition of a company, or the intrinsic value of its securities. This type of analysis presents a risk in that a poorly managed or financially in sound company may underperform regardless of larger movements in the market. • Concentration Risks: When assets are invested in a small number of issuers, specific asset type or overly exposed to particular sectors, industries or geographic regions that may create more vulnerability to unfavorable developments in these issuers, asset type, sectors, industries or geographic regions and greater risk of loss than those that are more broadly invested. • • Frequent Trading and Portfolio Turnover Risks: The turnover rate within the Advisory Program account may be significant. Frequent trades may result in higher transaction costs, including substantial brokerage commissions, fees, and other transactions costs. In addition, frequent trading is likely to result in short-term capital gains tax treatment. As a result, frequent trading and portfolio turnover in an Advisory Program account may have an adverse effect on the cost and therefore the return on the Advisory Program account. Infrequent Trading/Low Portfolio Turnover Risk: Advisory Program accounts may trade infrequently and experience low trading/turnover. As set forth elsewhere in this brochure, wrap fees Page | 58  charged are intended to cover various service, including trade execution. If a specific Clients Program account experiences low trading/turnover, the Client may not realize the full benefit of wrap fee paid with respect to such wrap account. Clients are encouraged to discuss the expected and/or historical level of trading with their IAR when evaluating the cost of a proposed or existing wrap account. • High Yield/Junk Bond Risk: Certain investment strategies invest in securities and instruments that are issued by companies that are highly leveraged, less creditworthy, or financially distressed. These investments are considered speculative and are subject to greater risk of loss, greater sensitivity to interest rate and economic changes, valuation difficulties and potential illiquidity. • Mutual Fund and/or ETF Risk: A common risk of mutual fund and/or ETF analysis is that, as with other securities investments, past performance does not guarantee future results. A manager who has been successful in identifying profitable opportunities among mutual funds may not be able to replicate that success in the future. In addition, because HTS does not control the underlying investments in a mutual fund or ETF, the manager of different funds held by the client may purchase the same security, creating concentrated exposure for the client to that security and increasing the risk if that security were to fall in value. There is also risk of a manager deviating from the stated investment mandate or strategy of the mutual fund or ETF, which could make the holding(s) less suitable for the client’s portfolio. • Closed End Fund Risk: CEFs are subject to market volatility and the risks of underlying securities which might include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments. Investment return will vary and an investor’s shares, when sold, might be worth more or less than their original cost. CEFs with complex or specialized investment strategies may experience increased market price volatility. For more information relating to the specific risk of the CEFs purchased, Clients should contact the fund’s sponsor and/or the IAR. • Unit Investment Trust Risk: A UIT is a pooled investment vehicle in which a portfolio of securities is selected by the sponsor and deposited into the trust for a specified period of time. The portfolio of a UIT is designed to follow an investment objective over a specified time period, although there is no guarantee that the objective will be met. UITs can have many different investment objectives and strategies, including equity, fixed income, balanced, international, global, and strategies that focus on a particular market capitalization, investment style, economic industry or sector, or geographic region. UITs are passively managed and follow a buy and hold strategy, meaning that UITS buy a fixed portfolio of securities and hold on that portfolio until their termination date at which time the portfolio is liquidated with the net proceeds paid to investors. UITs generally have a relatively higher risk of loss than other funds in the event of adverse changes in market or economic conditions. UITs have other risks, which may include management and securities selection risk, investment objective and asset allocation risk, stock market risk, equity securities risk, common stock risk, fixed income securities risk, interest rate risk, credit risk, capitalization risk, investment style risk, foreign issuer in investment risk, and emerging market risk. Certain UITs pursue Complex Strategies, which are subject to special risks. The degree of these and other risks will vary depending on the type of UIT selected. Also, investment return and principal value will fluctuate, and units, if and when redeemed, may be worth more or less than their original cost. • • Technology Risk: The offerings within the Programs are dependent upon various computer and telecommunication technologies, many of which are provided by or are dependent on third parties. The successful operation of the Program could severely be compromised by system or component failure, telecommunication failure, power loss, a software related system crash, unauthorized system access or use (such as “hacking”), computer viruses and similar programs, fire or water damage, human errors in using or accessing relevant systems, or various other events or circumstances. It is not possible to provide comprehensive and foolproof protection against all such events, and no assurance can be given about the ability of applicable third parties to continue providing their services. Any event that interrupts such computer and/or telecommunication systems or operations could have a material adverse effected on the Program. Such a material adverse effect may have a heightened impact on some of the Programs given the automated nature of the services provided. Insurance Carrier Risk: The risk associated with an insurance carrier’s financial strength in meeting Page | 59  current, ongoing, and senior financial obligations, which are obligation to policy/contract holders. An insurance carrier’s balance sheet strength, operating performance and financial profile are major factors that quantify an insurance carrier’s financial strength. • Derivative Instrument Risk: The value of options, convertible securities, futures, swaps, forward contracts, and other derivative instruments is derived from an underlying asset such as a security, commodity, currency, cryptocurrency, or index. Derivative instruments often have risks similar to the underlying asset, however, in certain cases, those risks are greater than the risks presented by the underlying asset. Derivative instruments may experience dramatic price changes and imperfect correlations between the price of the derivative and the underlying asset, which may increase volatility. Derivatives generally create leverage, and as a result, a small movement in the underlying asset’s value can result in large change in the value of the derivative instrument. Derivatives are also subject to liquidity risk, interest rate risk, market risk, credit risk, management risk and counterparty risk. The use of these instruments is not appropriate for some clients because they involve special risks. A Client should not invest in these instruments unless the Client is prepared to experience volatility and significant losses in the account. • Non-Traditional Assets Risk: Non-Traditional Assets, such as commodities, currencies, cryptocurrencies, securities indices, interest rates, credit spreads and private companies, are subject to risks that are different from, and in some instances, greater than, other assets like stocks and bonds. Some Non-Traditional are less transparent and more sensitive to domestic and foreign political and economic conditions than more traditional investments. Non-Traditional Assets are also generally more difficult to value, less liquid, and subject to greater volatility compared to stocks and bonds. Commodities Risk: Investments in commodities markets or a particular sector of the commodities markets, and investments in securities or other instruments denominated in or indexed or lined to commodities, are subject to certain risks. Those investments generally will subject a Client Account to greater volatility than investments in traditional securities. The commodities markets are impacted by a variety of factors, including changes in overall market movements, domestic and foreign political and economic conditions, interest rates, inflation rates and investment and trading activities in commodities. Prices commodities may also be affected by factors such a drought, floods, weather, livestock disease, embargoes, tariffs, and other regulatory developments. The prices of commodities can also fluctuate widely due to supply and demand disruptions in major producing or consuming regions. Certain commodities may be produced in a limited number of countries and may be controlled by a small number of producers or groups of producers. As a result, political, economic and supply related events in such countries could have a disproportionate impact on the prices of such commodities. No active trading market may exist for certain commodities investments, which may impair the value of the investments. • Currency Risk: Changes in foreign currency exchange rates will affect the value of certain portfolio securities. Generally, when the value of the U.S. dollar rises in value relative to a foreign currency, an investment impacted by that currency loses value relative to a foreign currency, an investment impacted by the currency loses value because that currency is worth less in U.S. dollars. Currency exchange rates may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates. Devaluation of a currency by a country’s government or banking authority also will have a significant impact on the value of any investments denominated in the currency. Currency markets generally are not as regulated as securities markets, which may be riskier than other types of investments and may increase the volatility of a portfolio. • Hedging Risk: Hedging techniques involve risk such as the possibility that losses on the hedge may be greater than the gains in the value of the positions of the Program account. • Exchange Traded Notes Risk: Risks of investing in exchange traded notes include, among others, index or benchmark complexity, price volatility, market risk associated with the index or benchmark, uncertain principal repayment based on the issuing financial institution and potential illiquidity. The ETN prospectus can be obtained by the Clients IAR for a description of the specific index or benchmark to which its performance is linked as well as a description of the risks of investing in the ETN and any of the non-traditional or complex investment strategies that the ETN follow or seeks to replicate. • Page | 60  • Exchange Traded Fund Risk: There may be a lack of liquidity in certain ETFs which can lead to a large difference between the bid-ask prices (increasing the cost to the Client when they buy or sell the ETF). A lack of liquidity can cause an ETF to trade at a large premium or discount to its net asset value. Additionally, an ETF may suspend issuing new shares and this could result in an adverse difference between the ETF’s publicly available share price and the actual value of its underlying investment holdings. At times when underlying holdings are traded less frequently, or not at all, an ETF’s returns also may diverge from the benchmark it is designed to track. • Managed Futures Risk: Managed futures strategies may seek exposure to different asset classes, such as equity securities, fixed income securities, commodities, currencies, interest rates, and indices. Investing in managed futures involves risks, including but not limited to, liquidity risk and risks associated with commodities, currencies and other non-traditional assets, leverage, derivative instruments, and complex strategies. Other risks may include market risk, fixed income securities risk, interest rate risk, credit risk, foreign issuer and investment risk and emerging market risk. Investors investing in these strategies should have a high tolerance for risk, including the willingness and ability to accept significant price volatility, potential lack of liquidity and potential loss of their investment. • Master Limited Partnership Risk: Investments in Program Accounts in securities of MLPs involve risks that differ from investments in common stock, including limited control and limited voting rights; dilution; compulsory redemptions at an undesirable time or price because of regulatory changes; and greater price volatility. • Climate Change Risk: Climate change, its physical impact, and related regulations could result in significantly increased operating and capital costs that could materially impact certain portfolio companies of Program account. • Key Personnel Risk: Advisory Program Accounts rely on certain key personnel who may leave or become unable to fulfill certain duties. Clients should understand that investing in any security involves a risk of loss of both income and principal. There can be no assurance that the IAR’s or HTS’s investment advice and recommendations will be successful or that Client’s investment objective will be achieved. Voting Client Proxies HTS will not vote on matters requiring shareholder voting in connection with the securities held in the account, or with respect to certain legal actions involving securities including, for example, voting proxies, mergers, bankruptcies, restructuring, class actions, or similar matters. Under the circumstances where HTS receives material on the client’s behalf, HTS will promptly forward such material to the client’s attention. HTS does not offer advice regarding proxy voting; this is the sole responsibility of the shareholder. With respect to the Passport Series, Momentum Pathways, Endeavor and Gateway FSP Programs, Envestnet and/or third-party Investment Managers have discretion to vote the proxy. The Client may request information on how their securities were voted by contacting HTS.HTS will aid any customer to obtain proxy voting information if requested. For more information relating to the voting of proxies by Envestnet and/or the Investment Manager, please refer to their respective disclosure brochures. If such information is not readily available, it would be grounds for termination of the Investment Manager. Any problems will be immediately referred to the Advisory Services Manager and the Chief Compliance Officer (“CCO”) of HTS. Client Information Provided to Investment Managers Information Provided to Envestnet When the client establishes an Advisory Services Group Program account, HTS will send information about the client and the account to Envestnet including the name, address, account assets, taxable status, account registration type, state/country of residence, the client’s Statement of Investment Selection, any applicable restrictions, and the account activity. Upon acceptance of the account, Envestnet will forward the foregoing information on to the Investment Manager in order for the Investment Manager to effectively manage the account. Investment Managers are not provided with client specific information, except for the brokerage number, account size and information about the IAR. In some cases, HTS sends the Investment Manager duplicate brokerage statements and/or confirmations. Page | 61  Client Contact with Investment Managers and Insurance Carriers The IAR will be the primary point of contact for addressing any questions or concerns relating to the managed account. If the client is enrolled in a program that employs an Investment Manager or Insurance Carrier, HTS imposes no limitations on a client’s ability to consult their Investment Manager(s), Portfolio Strategist(s), or Insurance Carrier directly, but the client is encouraged to first contact their IAR. Account Termination Investment advisory services may be terminated by either party at any time. Upon termination, the client is responsible for monitoring and managing the securities in their portfolio, and they will be subject to customary brokerage charges. HTS, the clients IAR, and any Investment Managers will have no further obligation to act or advise with respect to those assets. Any unused portion of the prepaid quarterly fee will be refunded and credited to the account. Such refunds will be pro- rated based on the number of days remaining in the calendar quarter for which the client prepaid a fee. If the client should choose to terminate their participation in any of HTS’s Programs, HTS can liquidate the account at that time if instructed to do so. If so instructed, HTS will liquidate the account in an orderly and efficient manner. HTS do not charge for such redemption if redeemed in the Advisory account. If the account is converted to a brokerage account and redemptions are executed in the brokerage account, standard commission ratels will apply. The Client should be aware that certain mutual funds impose redemption fees as stated in their fund prospectus. The Client should also keep in mind that the decision to liquidate securities or mutual funds may have tax consequences that should be discussed with their tax advisor. IAR Termination from the Programs HTS retains the authority to remove any IAR from the Programs at any time and to transfer day- to-day management responsibility of the client account to another HTS IAR or Branch Office Manager in certain situations, at any time without first notifying the client or obtaining their consent. In most cases this will result in the termination of the advisory agreement and the need to establish an advisory agreement with newly assigned IAR. Under certain circumstances a new advisory agreement will not be required. When an IAR who managed Client assets in an ASG account leaves the firm, ASG will close the accounts as Advisory and a pro-rated refund, based on the number of days remaining in the calendar quarter will be credited to the Client’s account. If the accounts are assigned to a new IAR and the Client wishes to establish a new Advisory relationship, the newly appointed IAR will need to provide the Client with their ADV Part 2B and submit new ASG paperwork to establish the account in the program selected. Disciplinary Information Below is notice of certain regulatory and legal settlements entered into by HTS and/or its affiliates: In March 2013, SWST (now HTS) reached a settlement agreement with FINRA after allegations were made that the firm bought or sold municipal securities from customers at prices that were not considered fair given the current market conditions and also failed to properly report certain trades within the required time period. In addition, FINRA further alleged that the firm’s supervisory system with respect to the alleged conduct was insufficient. The firm agreed to a censure, $77,500 fine, and $32,167.14 restitution plus interest. In August 2013, SWST (now HTS) reached a settlement agreement with FINRA for failure to transmit last sale reports to the appropriate trade reporting facility within the required time period. The firm agreed to a $5,000 fine. In November 2013, SWST (now HTS) reached a settlement agreement with FINRA for failing to execute the proper and timely close out of short positions creating a fail-to-delivery position in violation of FINRA rules relating to Regulation SHO. SWST (now HTS) agreed to a censure and $10,000.00 fine. In June 2014, SWST (now HTS) reached a settlement agreement with FINRA for failing to report the correct time of trade executions as required and failure to properly maintain record of the time of execution as required within the Firm’s records. SWST (now HTS) agreed to a censure and $12,500.00 fine. Page | 62  In October 2014, SWST (now HTS) reached a settlement with FINRA for failure to, within 30 seconds of execution, transmit last sale reports of transactions to the NASDAQ Trade Reporting Facility. FINRA further alleged that the firm failed to report the correct time of execution. The firm agreed to a censure and a fine of $17,500 and agreed to revise its Written Supervisory Procedures relative to the trade reporting of NMS Securities. In July 2015, affiliate FSC reached a settlement agreement with FINRA for failing to deliver Exchange Trade Fund Prospectuses to its own customer at the time of delivery of the security in contravention of Section 5 of the Securities Act of 1933. FSC agreed to a censure and $450,000 fine. In August 2015, an extended hearing panel decision was made to fine affiliate broker-dealer SWSFS (now MIN) $50,000. The sanction was based on the findings that the firm’s Supervisory system and its procedures were not reasonably designed to achieve compliance with rules relating to the suitability review process for certain variable annuity transactions and the time for transmitting Variable Annuity Transactions to the issuer. The findings also stated that the firm failed to implement adequate surveillance procedures to monitor its representatives. The panel also stated in the decision that FINRA did not prove that the firm lacked policies and procedures reasonably designed to implement corrective measures to address inappropriate exchanges to the conduct associated with the persons that engaged in inappropriate states. Further the decision stated that FINRA did not provide that the firm’s principals who reviewed the transactions lacked reasonable basis to believe the transactions were suitable for the customers or that the firm failed to document adequate training policies for its principals who reviewed Variable Annuity Transactions. In February 2016, the SEC instituted a cease-and-desist proceeding against affiliate SWST (Now HTS). The SEC found that SWST willfully violated section 17(A)(2) of the Securities Act by conducting inadequate due diligence in certain offerings and as a result failed to form a reasonable basis for believing the truthfulness of certain material represe3ntations in official statements issued in connection with those offerings. This resulted in the firm offering and selling municipal securities on the basis of materially misleading disclosure documents. The violations were self- reported by SWST to the commission pursuant to the SEC’s municipalities continuing disclosure cooperation initiative (MCDC). The firm was censured and paid a fine in the amount of $360,000 and is required to retain an independent consultant to conduct a review of the firm’s policies and procedures as they relate to municipal securities underwriting due diligence. In March 2016, the SEC instituted a cease-and-desist proceeding against affiliate, FSC. The SEC identified violations by FSC relating to the Fair Dealing and Financial Advisory Agreement rules of the MSRB in connection with financial advisory services rendered by FSC to its municipal client during the time frame March through November 2010. Specifically, during the aforementioned time frame FSC rendered advisory services to the municipal client in connection with a 2010 bond issuance but failed to memorialize, through a written agreement, the specific services or tasks that FSC would provide in connection with the bond issuance until seven months into the financial advisory relationship. FSC was ordered to pay disgorgement of $120,000, prejudgment interest in the amount of $22,400 and a civil money penalty in the amount of $50,000. In May 2016, HTS reached a settlement with FINRA for failing to provide appropriate disclosures to clients, at the time of trade, when the client was affecting a bond transaction for quantities below the required minimum denomination. While the firm had written procedures in place which prohibited the sale of municipal securities to customers below the minimum denomination, subject to certain exceptions, it did not have any systems or controls in place to prohibit sales below the minimum denomination. The firm agreed to a censure and fine in the amount of $40,000. In November 2016, HTS reached a settlement with FINRA for failing to disclose the material aspects of its relationships with its execution venues as it pertains to “payment for order flow” arrangements. The firm is required to describe the material terms of the arrangements such as any amounts per share or per order that the firm receives. As a result of the firm’s failure to disclose the payment terms for these relationships, the firm violation SEC Rule 606 of Regulation NMS. The firm agreed to a censure, and a $10,000 fine. In April 2019, HTS reached a settlement with the CBOE/BZX exchange for failing to report reportable positions in expiring options, mistakenly deleting the positions in its large option position reporting system submissions that were set to expire on the following day or failing to report positions that the firm had added or modified on the expiration date. The firm agreed to a censure, and a $37,500 fine. Page | 63  In September 2019, HTS, reached a settlement with FINRA for failing to establish procedures to ensure that customers received in writing the initial disclosure stating the annual rate or rates of margin interest that could be imposed prior to opening their margin account and failed to establish, maintain, and enforce a supervisory system designed to achieve compliance with Rule 10b- 16(a)(1). As a result, Hilltop violated SEC Rule 10b- 16(a)(1) and FINRA Rules 3110(a) and (b) and 2010. The firm agreed to a censure, and a $250,000 fine. In September 2019, Hilltop Securities (HTS) and affiliate broker-dealer Momentum Independent Network (MIN), jointly and severally, paid disgorgement of $736,497.48 and prejudgment interest of $74,287.92 for a total of $810,785.40. The U.S. Securities and Exchange Commission (SEC) brought numerous actions against investment advisers over the past several years that failed to make required disclosures, or the disclosures made were not written in a clear enough manner, related to its selection of mutual fund share classes that paid certain fees, known as 12b-1 fees, to representatives when a lower cost share class was available for the same fund that did not make those payments. 12b-1 fees are sometimes also described as distribution and marketing fees and are generally paid to brokerage firms for distribution and shareholder services. As a result of these actions and related findings, the SEC implemented the Share Class Selection Disclosure initiative to allow firms to self-report circumstances in which the disclosures do not meet the SEC’s requirements. After conducting a review of its advisory business, HTS addressed this issue in January 2018 by enhancing its investment advisory programs to rebate to customers any 12b-1 fees paid by mutual funds held in managed accounts and by making disclosures regarding the 12b-1 payments. Although HTS did make disclosures regarding mutual fund 12b-1 payments, without admitting or denying the findings in the order, the SEC has indicated that the disclosures were not clear enough for investors to make an informed decision regarding offered advisory services and payments. As a result of the SEC’s decision regarding these fees and disclosures, without admitting or denying the findings, HTS accepted an offer from the SEC to settle this matter and agreed to the entry of an order which included HTS to return certain 12b-1 fees and interest charged to investors in managed accounts from January 2014 through January 2018. In agreeing to participate in this initiative, HTS will not be subject to a regulatory fine by the SEC. On August 14, 2024, the Securities and Exchange Commission (“SEC”) entered into a settlement order with Hilltop Securities Inc. (“Hilltop”) to settle an administrative action finding that Hilltop failed to (1) maintain and preserve off-channel communications related to Hilltop’s broker-dealer business, as well as related to recommendations made or proposed to be made and advice given or proposed to be given with respect to Hilltop’s investment advisory business; and (2) reasonably supervise its personnel with a view to preventing or detecting certain of its personnel’s aiding and abetting violations of certain provisions of the federal securities laws. Hilltop admitted to the facts in the settlement order, acknowledged its conduct violated the federal securities laws, and agreed to: (a) a cease-and-desist order, (b) a censure, (c) payment of a civil monetary penalty in the amount of $1,600,000, and (d) certain undertakings related to the retention of electronic communications. Related Items: https://www.sec.gov/litigation/admin/2019/ia-5393.pdf In June 2020, HTS reached a settlement with FINRA for failure to establish and implement an anti-money laundering (“AML”) compliance program that was reasonably designed to detect and report suspicious trading activity in low-priced securities. FINRA alleged that HTS failed to conduct reasonable reviews of low-priced securities activity for the purposes of determining if a Suspicious Activity Report should be filed. The same settlement agreement also applied to the Firm’s failure to submit required regulatory filings to the MSRB’s EMMA system and G-17 disclosure letters to issuers in connection with primary offerings of municipal securities. HTS agreed to a $475,000.00 fine ($375,000 for AML and $100,000 for the municipal offerings), censure and to retain an independent consultant to conduct a review of the reasonableness of its policies, systems and procedures related to the AML matter. In July 2021, HTS reached a settlement with the Securities and Exchange Commission for failing to reasonably supervise a registered representative in connection with retail order periods for negotiated new issue municipal bonds. Between January 2016 and April 2018, HTS personnel obtained bonds for trading inventory accounts by placing orders with a co-managing underwriter during the retail order period. The retail order period is designed to grant first priority to retail investors for new issue municipal bonds. By placing the orders in this Page | 64  manner, the senior managing underwriter was unaware that bonds were being purchased for trading inventory accounts. HTS agreed to a $85,000.00 civil penalty, $206,606 disgorgement, $48,587 prejudgment interest, a censure and cease and desist injunction. In August 2023, Momentum Independent Network Inc., an affiliate of Hilltop Securities Inc., was issued a $2500 civil fine by the State of Maine for failing to perform a required onsite inspection for one (1) Branch Office location. Other Financial Industry Activities and Affiliations Hilltop Securities (HTS) is a wholly owned subsidiary of Hilltop Securities Holdings LLC, a Delaware limited liability company. Hilltop Securities Holdings LLC is a wholly owned subsidiary of Hilltop Holdings Inc. (“HTH”), a Dallas-based financial holding company. Through HTH’s wholly owned subsidiary, PlainsCapital Corporation, a regional commercial banking franchise, it has two operating subsidiaries: PrimeLending and PlainsCapital Bank (“PCB”), including its subsidiary PlainsCapital Securities, LLC. HTS provides a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. Hilltop also has other wholly owned direct and indirect subsidiaries which are not material to the advisory business of HTS. Affiliates of HTS that are material to HTS’s advisory business include: • Momentum Independent Network Inc. (MIN) (formerly Hilltop Securities Independent Network Inc.), a dually registered Broker-Dealer and Registered Investment Adviser • Hilltop Securities Asset Management, LLC, a Registered Investment Advisor • Hilltop Securities Insurance Agency, Inc., a licensed insurance agency HTS, through its affiliation with Hilltop Securities Insurance Agency (“HSIA”), will earn commission-based compensation for selling insurance type products, such as life, disability, long term-care insurance, and fixed and variable annuities. In addition, some IARs also are licensed and operate as insurance agents and receive commission-based compensation for the sale of these types of products. Insurance commissions earned by IARs from the sale of these products are separate and in addition to HTS’s advisory fees. Therefore, the sale of insurance and annuity products presents a conflict of interest because IARs who are also insurance agents have an incentive to recommend insurance and annuity products to the client for the purpose of generating commissions. The client is under no obligation to purchase products or services recommended by HTS or IARs of HTS in connection with any advisory service that HTS offers. HTS also has arrangements with MIN which are material to its advisory business. HTS and MIN are affiliated due to their common ownership by HTH. HTS is the sponsor of the MIN Advisory Programs through a co- advisory arrangement. For all Programs sponsored by HTS, HTS retains a portion of the Program fee for performing administrative services (such as reporting, record keeping, and fee billing administration). The portion of the Program fee retained by HTS generally ranges from 0.10% to 0.35% (annual rate) of the Account Value of each Program. PlainsCapital Bank (”PCB”) is an affiliate of HTS, both of which are under HTH’s common control. HTS has entered into an agreement with PCB for brokered deposit services. In addition, PCB pays certain marketing and administrative fees to HTS in exchange for marketing money market funds to certain HTS clients. Registration as a Broker-Dealer HTS, a full-service broker-dealer and Investment Adviser, provides fully disclosed securities clearing, securities brokerage and investment banking. As a registered broker-dealer, HTS is a member of Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). As an introducing broker, HTS engages in retail securities transactions for investment advisory and non-investment advisory clients, along with certain other activities normally associated with a broker-dealer. In this capacity, HTS receives certain fees and commissions, including a share of commissions for effecting client transactions. Any such fees are separate to the advisory fees a client pays HTS for the provision of investment advisory services. IARs are also associated with HTS as registered representatives. IARs are permitted to recommend the purchase of securities offered by HTS as a securities broker-dealer. If a client purchases these products through these individuals as registered representatives in regular brokerage accounts, they will receive normal commissions, Page | 65  including 12b-1 fees for the sale of investment company products, which are separate to the advisory fees the client pays. As such, IARs have incentive to sell the Client commissionable products in addition to providing them with advisory services when such commissionable products may not be suitable. Therefore, a conflict of interest exists between their interests and the Clients’ interests. While HTS’s securities sales are reviewed for suitability by an appointed supervisor, the Client should be aware of the incentives HTS has to sell certain securities products, and the Client is encouraged to ask HTS about any existing or potential conflict of interest. Please be aware that the Client is under no obligation to purchase products or services recommended by HTS or IARs of HTS in connection with providing the Client with any advisory service that are offered. The Client may obtain information about the IAR, their licenses, educational background, employment history, and if they have had any disciplinary issues or received serious complaints from investors through the FINRA BrokerCheck service available from FINRA at http://www.finra.org, or from the Securities and Exchange Commission at www. adviserinfo.sec.gov. In addition, some of HTS’ IARs hold educational credentials, such as the Certified Financial PlannerTM (CFP®) designation. Holding a professional designation typically indicates that the IAR has completed certain courses or continuing education. However, an IAR's professional designation does not change the obligations of HTS or the IAR in providing investment advisory or brokerage services to Clients. Registration as an NFA Introducing Broker-Dealer HTS is registered as an introducing broker and is member of the National Futures Association (“NFA”), which is the self-regulatory organization for the U.S. futures industry. Client Referral and Other Compensation HTS pays referral fees to persons for referring advisory business to HTS pursuant to Rule 206 (4)- 3 of the Investment Advisers Act. Such fees are only paid to persons with whom HTS has entered into formal referral agreements. HTS also requires that a referral fee disclosure statement be given to clients (or prospective clients) that discloses, among other things, the amount of fee to be paid to the referring person and the fact that the payment of such referral fees has not increased the amount of the total advisory fee that a client (or prospective client) will pay. Marketing Support from Product Sponsors HTS has agreements with certain mutual fund families, alternative investment sponsors, insurance companies, Investment Managers, ETF sponsors, UIT sponsors, and Turnkey Asset Management Program providers whose products are available on the firms’ platform who may contribute funds to support the IAR education Programs. These contributions are used to subsidize the cost of training seminars HTS offers to IARs through specialized firm-wide Programs and regional training forums. These training forums are designed to provide training and education of IARs, Field Leadership, Supervisors, and other personnel who solicit or support the business listed in this brochure. These contributions also subsidize a significant portion of the costs incurred to support the IAR, IAR and Client education, and product marketing efforts conducted regionally and nationally by product specialists employed by HTS. The training events can, and often, include a non-training element to the event such as business entertainment. Not all vendors contribute to HTS’s education efforts. Neither contribution towards these training and educational expenses, or lack thereof, is considered as a factor in analyzing or determining whether a vendor should be included or should remain in Programs offered or the platform. Contributions can vary by a vendor and event. In some instances, the contributions per vendor are significant. Some vendors may choose to contribute at different levels than those requested by HTS. Additional contributions may be made by certain vendors in connection with specialized events or education or training forums. The HTS IAR does not receive a portion of these payments. However, their attendance and participation in these events, as well as the increased exposure to vendors who sponsor the events, tends to lead IARs to recommend the products and services of the vendors as compared to those who do not. Page | 66  Non-Cash Compensation HTS and IARs receive non-cash compensation from these vendors in the following ways: • Sponsorship of educational events the IAR conducts for Clients and prospective Clients. • Contributions made at the firm level towards educational Programs for IARs. These contributions are significant and while the IARs do not receive a portion of the payment, a conflict arises in that the IARs participation in the educational events are exposed to vendors who sponsor the events and tend to lead the IARs to recommend the products and services of these vendors. • Various forms of marketing support and development of tools used by HTS and its IARs for training, practice management and record-keeping purposes. • Occasional gifts up to $100 per vendor per year. • Occasional meals, tickets, or other entertainment of reasonable and customary value. The thresholds and limits for gifts and entertainment are designed to mitigate conflicts related to recommending the products of the providers of such gifts, meals, or entertainment. The receipt of the cash and non-cash compensation from sources other than clients, and the differences in the way IARs are compensated for products the firm offers, create an incentive for IARs to recommend certain products and account types over others. Conflicts of interest are addressed by maintaining policies and procedures requiring the IARs act in the Client’s best interest, reasonably supervising their activities and by disclosing these conflicts to Clients so that Clients can make an informed decision. Brokerage Practices – Best Execution HTS renders investment advice to its clients on a non-discretionary and discretionary basis, pursuant to client’s advisory agreement. In HTS’s advisory programs the client will appoint HTS as sole and exclusive broker for execution transactions, this relationship is referred to as directed brokerage. HTS will also be a clearing firm and custodian of the client’s account. Through directed brokerage, HTS has benefits where it requires a client to utilize the services of an affiliated broker/custodian. The directed brokerage relationship creates a conflict of interest as programs implemented through the affiliated broker-dealers pay commissions and/or transaction charges that are higher than at some other broker-dealers. Not all investment advisers who are dually registered as broker- dealers or who have affiliated broker-dealers require their clients to use the adviser’s broker-dealer to execute transactions. In placing orders for purchase and sale of securities and directing brokerage to affect these transactions, HTS’s primary objective is to seek prompt execution of orders at the most favorable prices reasonably obtainable. Envestnet and any appointed Investment Manager in the Passport Series, Momentum Pathways, Gateway FSP, Endeavor Compass UMA and Navigator Programs have discretion to cause trades to be executed by broker- dealers other than HTS if Envestnet and/or the Investment Manager reasonably determines in good faith that using another broker- dealer is likely to result in better execution than if the trades were executed by HTS. Occasionally, in order to seek best execution and minimize market impact, trades can be “stepped-out” in order to gain best execution and minimize market impact. In some instances, stepped-out trades are executed by the other firms without any additional commission or markup or markdown, but in other instances, the executing firm imposes a commission or a markup on the trade. If a client’s Investment Manager steps-out trade orders for the client’s account with a broker-dealer other than HTS, and the other broker-dealer imposes a commission or equivalent fee on the trade (including a commission embedded in the price of the investment), the client will incur trading costs in addition to the Advisory Fee. HTS is not a party to step-out trades and is not in a position to negotiate the price or transaction related cost(s) with broker, dealer or bank selected by Envestnet and/or the Investment Manager for these trades. Securities transactions in client accounts participating in the HTS Programs are generally affected on a "net" basis (i.e., without commissions), and a portion of the fee is generally paid for advisory services provided. Clients will generally pay an asset-based fee for the brokerage/custody/clearing services provided by HTS as the broker/custodian (as opposed to transaction-based fees such as commissions), and those fees are generally included in the Program Fee for a client. To the extent that such fees are not included in the Program Fee, the client will be so informed in writing. Please refer to Fees and Compensation section for details regarding fee arrangements. Page | 67  Brokerage practices and best execution for HTSPM is detailed above in this brochure. Payment for Order Flow HTS may receive remuneration in return for directing some customer orders for execution to particular exchanges or market centers. This remuneration, known as payment for order flow, is considered compensation to HTS and may include non-cash items such as reciprocal arrangements, discounts, rebates or reductions or credits against fees that would otherwise be payable in full by the clients Financial Professional. This arrangement creates a conflict of interest for HTS to route orders to certain exchanges or market centers in exchange for such compensation. Order routing statistics required under SEC rules are available on HTS’s website at https://www.hilltopsecurities.com/hilltop-securities-inc-disclosures/order-routing-disclosure/. Order Aggregation & Block Orders In order to seek a more advantageous net price, it is HTS’s practice to aggregate, when feasible, orders for purchase or sale of a particular security for accounts of several program clients for execution as a single transaction. Any benefit to such aggregation generally is allocated pro-rata among the client accounts that participated in the aggregated transaction. HTS, Envestnet and/or the Investment Manager have the discretion to aggregate orders for client accounts with the orders of other clients, their own accounts, their employees, and their related persons. In such cases, the transactions, as well as the expenses incurred in the transactions are allocated according to HTS or the applicable sub-manager’s policy in a manner believed by it to be equitable to the client. In such cases, each account will be charged with the average price per unit, and where applicable, with brokerage costs and other fees. Envestnet and/or the Investment Managers participating in the Passport Series, Momentum Pathways or Gateway FSP Programs may determine that the purchase or sale of a particular security is appropriate for more than one client account. In such cases, Envestnet and/or the Investment Manager has the discretion to decide to aggregate multiple client orders into one “block” order for execution purposes. This can have the advantage of avoiding an adverse effect on the price of a security which can result from simultaneously placing a number of separate competing orders. In the event a block transaction is affected by Envestnet and/or an Investment Manager, the client will receive the average price of all transactions effected to satisfy the order. As a result, the average price received by the client can be higher or lower than the price the client would have received had the transaction been affected for the client independently from the block transaction. When aggregating orders, and in the process of allocating block purchases and block sales to individual client accounts, it is HTS’s policy to treat all clients fairly and to achieve an equitable distribution of aggregated orders. Envestnet and/or the Investment Managers participating in the HTS program also participate in other wrap fee programs sponsored by broker/dealers not affiliated with HTS. In addition, Envestnet and/or the Investment Managers typically manages institutional accounts not referred through a directed brokerage, wrap fee program. In the event Envestnet and/or the Investment Managers wish to buy or sell a security for all accounts within a particular discipline, they can affect such transactions through a large number of broker-dealers. Depending on the liquidity of the security and the size of the transaction, among other factors, Envestnet and the Investment Managers utilize a trade rotation process where one group of clients (i.e., HTS Clients) has a transaction effected before or after another group of clients so as to limit the market impact of the transaction. Envestnet and/or the Investment Manager’s trade rotation policies are at their discretion, and typically utilize a random selection process with the intent to equitably allocate transactions over time across Envestnet and/or the Investment Manager’s entire client base. Each group of clients can expect to receive executions at the beginning, middle and the end of the rotation. Additional information regarding Envestnet’s and/or the Investment Manager’s trade rotation policies, if any, is available in the sub-manager’s Form ADV Part 2. Investment Managers and Strategists Trade Rotation Investment Managers and Strategists participating in the Passport Series, Momentum Pathways and Gateway FSP Programs typically participate in other wrap fee programs sponsored by other Advisory/broker-dealers, institutional accounts and even advise on mutual funds. When an Investment Manager directs a transaction (buy/sale) for a security for all accounts within a particular strategy, the Manager/Strategist may have to possibly direct similar transactions through a substantial number of firms. In this case the Investment Managers will employ a trade rotation process. This occurs when a group of clients may have a transaction executed before or after another group of the Investment Managers Clients in other wrap fee Programs. This trade rotation Page | 68  seeks to limit the potential market impact of the transaction. The trade rotation process can result in HTS clients being the first accounts in which a trade is aggregated and executed. Once completed, the Investment Manager will “rotate” to the next set of clients or firm in the rotation; it is expected that HTS clients will eventually be last in the rotation. The rotation process is developed and administered at the Investment Managers sole discretion. The selection process is generally random and is intended to create a fair way allocate transactions to all participants. Over time, each group of participants should expect to receive executions at the beginning, middle and the end of the rotation. This can result in transactions being executed in their account near or at the end of the rotation. There can be a market price impact on trades executed later versus trades executed earlier in the rotation. Typically, the trade rotation process is also used to enable the Investment Managers to meet their best execution obligations. This can result in some of the Investment Managers to decide to employ a trade rotation process for all securities in their portfolio and trade only through the respective firm’s sponsoring the wrap fee programs, while others may choose to employ a rotation process that includes making a determination to trade away from the sponsors frequently or on a majority basis. For additional information regarding each Investment Manager’s trade rotation, please refer to the specific Investment Manager’s Form ADV Part 2A. Due to this rotation HTS may not be able to process the trades on the same day that notice is received as time limitations due to market closing and receiving the trade late in the day. Best efforts are made to execute trades same day, but in some cases, it may be the next business day that the markets are open. Client Referral and Other Compensation HTS pays referral fees to persons for referring advisory business to HTS pursuant to Rule 206 (4)- 3 of the Investment Advisers Act. Such fees are only paid to persons with whom HTS has entered into formal referral agreements. HTS also requires that a referral fee disclosure statement be given to clients (or prospective clients) that discloses, among other things, the amount of fee to be paid to the referring person and the fact that the payment of such referral fees has not increased the amount of the total advisory fee that a client (or prospective client) will pay. Code of Ethics, Participation in Client Transactions and Personal Trading Code of Ethics HTS has adopted a Code of Ethics that governs a number of potential conflicts of interest HTS has when providing HTS’s advisory services to the client. HTS’s Code of Ethics is designed to ensure that HTS meets the fiduciary obligations to the client and to foster a culture of compliance throughout HTS. HTS’s Code of Ethics is comprehensive and is designed to help HTS detect and prevent violations of securities laws and to help ensure that HTS keeps the clients’ interests first at all times. HTS distributes the Code of Ethics to each supervised person at HTS at the time of their initial affiliation with HTS; HTS makes sure it remains available to each supervised person for as long as they remain associated with HTS; and HTS ensures that updates to the Code of Ethics are communicated to each supervised person as changes are made. HTS’s Code of Ethics asserts that all supervised persons have a fiduciary responsibility to clients, and they must always adhere to federal securities laws. The Code also covers client confidentiality, gifts, undue influence in personal securities transactions and use of client or company assets to benefit one personally. Additionally, the Code mandates monitoring, review, reporting and sanctions for violations of the Code of Ethics. HTS will provide a copy of the Code of Ethics to any client or prospective client upon request. Personal Trading HTS and its officers, directors, employees, and affiliates can buy or sell securities for themselves that they also recommend to clients. HTS receives duplicate confirmations for all trades conducted by HTS personnel and reviews them for potential conflicts of interests. Participation or Interest in Client Transactions & Principal Trades HTS, as a broker-dealer, can act as an agent or, where permitted by law, or principal (including instances wherein HTS is an underwriter or selling group member). Even though HTS is permitted by contract or by law to do so, as a matter of policy, HTS generally does not execute principal trades or agency cross transactions in the advisory programs. Although in some instances, HTS can provide a more favorable market price to the client if HTS participates in principal trade or an agency cross transaction with client accounts, HTS does so only when consistent with HTS’s obligation to seek best execution, due to regulatory requirements, when executing such transactions. Therefore, the client will not have access to new issues or syndicate offerings in Page | 69  these accounts. The client may make such purchases in a retail brokerage account, and they should be aware that they will be subject to the customary fees and compensations charged in such accounts. HTSPM from time to time will purchase new issue bonds but only in the secondary market and not a part of the IPO in the primary market with no mark-up or commission. In case-by-case exceptions, in which HTS enters into principal trades or agency cross transactions, the firm will provide specific disclosures and obtain the clients consent. HTS relies on codes and restrictions in the systems as well as additional software to prevent non-permissible principal trades. In some instances, HTS does not act as an investment advisor (according to Section 206(3) of the Investment Adviser Act of 1940) with respect to an advisory program transaction if the transaction is directed to HTS by a nonrelated Investment Manager, to whom the client has granted discretionary trading authority and HTS does not recommend, select or play a role, direct or indirect, in the Investment Manager’s selection of particular securities to be purchased for, or on behalf of, program clients. HTS has implemented systems and procedures that are designed to comply with the policy stated above and to monitor related activities. HTS has the discretion to effect cross-transactions between client accounts, where one client purchases a security held by another client. Neither HTS nor any related party receives any compensation in connection with a cross-transaction. HTS effects these transactions only when HTS determines that the transaction to be in best interests of both clients and at prices, HTS has determined to reflect their value. The Client should understand that, to the extent permitted by applicable law, HTS can in transactions involving the Clients securities, act as agent while also representing another Client of HTS on the other side of the transaction ("Agency Cross-Transaction") provided, however, that no such Agency Cross-Transaction will be affected for the Program Accounts of any ERISA Plan or an individual retirement account. If the transaction is an Agency Cross-Transaction, in which HTS acts as the broker or agent by purchasing or selling securities from or to one of HTS’s brokerage customers, HTS obtain the clients written consent and will provide them with a written confirmation at or before the completion of the transaction. The confirmation will describe the nature of the transaction, plus information about its date and time, and the remuneration that the Investment Adviser or another person received as a result. At least annually, HTS will provide the client with a written disclosure statement identifying the total number of such Agency Cross-Transactions for their account during the period, and the total amount of all commissions or other remuneration HTS received or will receive in connection with these transactions, if any. HTS generally will not affect Agency Cross-Transactions between clients if HTS has recommended the security to both clients. Such Agency Cross-Transactions have a potential of conflicting division of loyalty and responsibility regarding both parties to the Agency Cross- Transaction. Such transactions are generally limited brokerage (non-advisory) clients only unless specific consent by the client has been granted to the transaction in accordance with regulatory requirements. HTS sometimes has a financial interest in securities or investment products that HTS’s IARs recommend to advisory clients. In certain cases, the products may only be used with restrictions within the advisory programs. Principal trades and Agency Cross-Transactions are also subject to additional restrictions, procedures and controls that are in place for the securities transactions in advisory accounts. HTS will seek to obtain the best execution for each of HTS’s advisory clients. As a matter of HTS policy, HTSPM will not engage in Principal or Cross transactions. Custody Generally, HTS will maintain custody of assets in the clients’ account. When HTS acts as custodian, the client will be provided an account statement in any month in which there is trading or other activity in the account, or if there is no trading activity, not less than on a quarterly basis. HTS also provides trade confirmations when securities transactions take place. The Insurance Carrier will be the custodian of assets in the Destination Program account. The Insurance Carrier will provide the client with account statements and confirmations of transactions. Per SEC Rule 206(4)-2, HTS has implemented a set of controls designed to protect those Client assets from being lost, misused, misappropriated or subject to the Advisers’ financial reverses in an effort to ensure that Client assets are protected. Among other things, HTS undergoes a separate examination by an independent auditor, the purpose of which is to obtain the auditor’s report on our internal controls designed to safeguard Clients’ assets held at Page | 70  the Firm. HTS also undergoes an annual surprise audit by an independent registered accounting firm that is designed to verify the Clients’ assets. At the conclusion of the annual surprise audit, the independent auditor files a report with the SEC attesting to, among other things, HTS compliance with regulatory requirements. For those third parties that HTS uses for certain Programs may also serve as qualified custodians of the firm’s Client assets. In such cases, consistent with applicable regulations, HTS is provided a report issued by an independent registered public accountant relating to the third parties’ internal controls in connection with its custody services. Investment Policy Statements HTS or its Adviser’s will not monitor for compliance nor approve investment policy statements when provided in association with an account in one or more of the listed Advisory programs described in this brochure. HTS does not provide Investment Policy Statements. HTS will not be responsible for the ongoing monitoring of the client’s investment policy statement and the assets allocation detailed within the statement. This is the responsibility of the client, and the client should consult with the legal and tax advisors for matters regarding the investment policy statement. Retirement Planning Advisory Services is not included in this section as under certain circumstances in that Program the IAR will be involved in the creation and review of the IPS. Financial Information HTS has not been the subject of a bankruptcy petition at any time in its existence. Under no circumstances will HTS debit fees more than six months in advance of services rendered. 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Hilltop Securities Inc. Managed Accounts Client Disclosure Brochure Part 2A of Appendix 1 of Form ADV: Wrap Fee Program Brochure IA SEC Number: 801-55529 CRD: 6220 Hilltop Securities Inc. Attn: Advisory Services Group 717 N. Harwood Street, Suite 3400 Dallas, TX 75201 214-859-6735 March 26, 2025 This Client Disclosure Brochure provides information about the qualifications and business practices of Hilltop Securities, Inc (“HTS”) and HTS Managed Account Programs. This information should be considered before becoming a client of one of these programs. This Brochure applies to all wrap fee program advisory accounts offered by Hilltop Securities Inc., including all current and future advisory accounts. HTS will not provide the client an additional copy of the Form ADV Disclosure Brochure when a new advisory account is established unless there are material changes to the document occurred after the document previously provided. Instructions on how to obtain a copy of the updated Form ADV Disclosure Brochure, or a summary of material changes from the brochure, is provided annually to clients on their quarterly statement. Please retain all these documents for future reference as they contain important information when adding services or opening new advisory accounts with HTS. This brochure provides information about the qualifications and business practices of Hilltop Securities Inc (“HTS”). This information should be considered before becoming a client. Any questions about the contents of this brochure, can be directed to HTS at 888-658-9165 or 214-859-9165 or clientpartners@hilltopsecurities.com. This information has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Additional information about Hilltop Securities Inc. is available on the Securities and Exchange Commission’s website at www.adviserinfo.sec.gov. The site may be searched by the unique identifying number, known as an IA number. The IA number for Hilltop Securities is 801-55529. Registration does not imply a certain level of skill or training. 1 | P a g e  Summary of Material Changes Updated March 26, 2025 This Brochure has been updated with the following Material Changes that have occurred since the last Client Disclosure Brochure update on March 28, 2024. Envestnet was acquired by affiliates of vehicles managed or advised by Bain Capital Private Equity, LP, a private equity firm, and certain minority co-investors on November 25,2024. Envestnet is the parent company of Envestnet Asset Management, Inc., who works with HTS to provide investment advisory services. Envestnet does not anticipate any material changes to its day-to-day advisory business to result from the transaction, and the same management team and professionals are expected to remain in place. Envestnet Asset Management’s ADV Part 2A has been updated to reflect this material change in ownership and is available at: htttps://www.Envestnet.com/Forms-ADV-CRS. You may also request a copy from your HTS IAR. The Endeavor Active/Passive Program has been renamed The Endeavor Program. Additionally, new Endeavor Hilltop Models have been added to accompany the existing Endeavor Foundations and Flagship model portfolios. HTSPM was launched in 2024, and subsequently created a new model strategy, HTSPM Flexible Maturity Strategy, which is now available for IARs and Clients. The Navigator UMA Program has been created as a new advisory program for IARs to offer to clients. The Aviator Discretion Program that was previously closed as of 12/31/2024 to new accounts except on a limited basis has been partially re-established. Only the approved IARs may participate in the Program and establish new accounts. All existing accounts will continue to be supported. The following disclosures have been added in the Disciplinary Disclosures section of this brochure. On August 14, 2024, the Securities and Exchange Commission (“SEC”) entered into a settlement order with Hilltop Securities Inc. (“Hilltop”) to settle an administrative action finding that Hilltop failed to (1) maintain and preserve off- channel communications related to Hilltop’s broker-dealer business, as well as related to recommendations made or proposed to be made and advice given or proposed to be given with respect to Hilltop’s investment advisory business; and (2) reasonably supervise its personnel with a view to preventing or detecting certain of its personnel’s aiding and abetting violations of certain provisions of the federal securities laws. Hilltop admitted to the facts in the settlement order, acknowledged its conduct violated the federal securities laws, and agreed to: (a) a cease-and-desist order, (b) a censure, (c) payment of a civil monetary penalty in the amount of $1,600,000, and (d) certain undertakings related to the retention of electronic communications. A copy of the current Client Firm Disclosure Brochure is available at any time, without charge, by contacting Hilltop Securities Inc. by phone at 888-658-9165 or 214-859-9165 or by email at clientpartners@hilltopsecurities.com. A copy of the most recent disclosure brochure may be obtained by going to the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov. 2 | P a g e  Table of Contents Summary of Material Changes .................................................................................................................................... 2 Advisory Business ....................................................................................................................................................... 4 Services, Fees, and Compensation ............................................................................................................................... 4 Tax and Impact Overlay Services ................................................................................................................................ 5 Advisory Accounts available through Envestnet Asset Management, Inc. ................................................................. 5 Aviator and Co-Pilot Program Overview .................................................................................................................... 6 Mutual Fund Investments available through HTS ....................................................................................................... 9 Passport Series SMA/Momentum Pathways UMA ................................................................................................... 10 Hilltop Securities Portfolio Management (HTSPM) ................................................................................................. 12 HTSPM Portfolio Risks ............................................................................................................................................. 14 Brokerage Practices & Best Execution ...................................................................................................................... 15 Gateway FSP – Fund Strategist Portfolios ................................................................................................................ 17 Compass UMA Program ........................................................................................................................................... 20 Endeavor Program ..................................................................................................................................................... 22 Navigator UMA Program .......................................................................................................................................... 25 Destination Fee-Based Annuity Program .................................................................................................................. 28 HTS Program Investment strategies; Eligible and Ineligible Assets ......................................................................... 33 Billing Practices for all Programs .............................................................................................................................. 37 Advisory Program Fees, Compensation, and Other Costs......................................................................................... 38 Funding the Account ................................................................................................................................................. 41 Cash Sweep ............................................................................................................................................................... 42 Bank Insured Deposit Program ................................................................................................................................. 43 Methods of Analysis, Investment Strategies and Risk of Loss .................................................................................. 47 Risk of Loss ............................................................................................................................................................... 48 Voting Client Proxies ................................................................................................................................................ 56 Client Information Provided to Investment Managers ............................................................................................... 56 Client Contact with Investment Managers and Insurance Carriers ........................................................................... 56 Account Termination ................................................................................................................................................. 56 Disciplinary Information ........................................................................................................................................... 57 Other Financial Industry Activities and Affiliations ................................................................................................. 59 Registration as a Broker-Dealer ................................................................................................................................ 60 Registration as an NFA Introducing Broker-Dealer .................................................................................................. 60 Client Referral and Other Compensation .................................................................................................................. 60 Brokerage Practices – Best Execution ....................................................................................................................... 61 Payment for Order Flow ............................................................................................................................................ 62 Order Aggregation & Block Orders .......................................................................................................................... 62 Investment Managers Trade Rotation ........................................................................................................................ 63 Code of Ethics, Participation in Client Transactions and Personal Trading .............................................................. 63 Custody ...................................................................................................................................................................... 65 Investment Policy Statements .................................................................................................................................... 65 Financial Information ................................................................................................................................................ 65 3 | P a g e  Advisory Business Hilltop Securities Inc. a Delaware corporation (“HTS”) is a full-service broker-dealer and registered Investment Adviser, serving the investment and capital needs of individual, corporate and institutional clients, banking and thrift clients, and qualified accounts (“client,” “clients,” or “their”). HTS is a wholly owned subsidiary of Hilltop Securities Holdings LLC, a Delaware limited liability company. HTS, as a full-service broker-dealer, provides brokerage, execution, clearing, and custody services to its clients. HTS is registered with the United States Securities and Exchange Commission (“SEC”) pursuant to the Securities Exchange Act of 1934, a member of the New York Stock Exchange (“NYSE”), the American Stock Exchange, the Financial Industry Regulatory Authority (“FINRA”), and the Securities Investor Protection Corporation (“SIPC”). HTS is also an Investment Adviser registered with the SEC pursuant to the Investment Advisers Act of 1940. As an Investment Adviser, HTS completes a Form ADV which contains additional information about its business and affiliates. The Form ADV and additional information is available through public filings with the SEC at www.adviserinfo.sec.gov. In comparing account types and managed account Programs (“Programs”) and their relative costs, the client should consider various factors, including, but not limited to, the range of investment products available in each Program, preference for an advisory or brokerage relationship, and preference for a fee-based or commission- based relationship. Each HTS managed account is assigned to an Investment Adviser Representative (“IAR”). Any IAR of HTS who provides investment advice for a fee is required to meet the appropriate states’ regulatory requirements which may include an administered examination or an approved designation in lieu of an exam. Registration of an Investment Adviser does not indicate a higher level of skill or training. As of December 31, 2024, HTS has $2,254,166,069.09 assets under management, $598,775,204.57 in an advisor discretionary basis, $1,029,197,247.38 on separately managed discretionary basis, and $626,193,617.14 on a non-discretionary basis. Services, Fees, and Compensation HTS sponsors a number of Programs that are designed to help clients meet their investment objectives and goals. The accounts managed by HTS are generally not intended to provide the client with a complete investment program as HTS expects that the assets it manages for the client do not represent the entire value of their investment portfolio. The service begins with a consultation between the client and their IAR to review investment objectives, financial circumstances, and risk tolerance. The client will complete a Risk Tolerance Questionnaire (“RTQ”) to document the results of this assessment. After reviewing the results of the RTQ, the clients IAR will recommend a specific advisory program. By reviewing the RTQ and recommending a specific advisory platform, the clients IAR seeks to appropriately balance the client’s financial objectives with their risk tolerance as part of an investment strategy. The client agrees to immediately notify their IAR of any changes in their financial situation or risk objectives. In some cases, these Programs cost the client more or less than purchasing the services separately. The client should be aware that commissions or Program fees charged in some cases are higher than those otherwise available if the client were to select a separate brokerage service and negotiate commissions in the absence of the extra advisory services provided. HTS’s fee schedules are subject to negotiation, depending upon a range of factors including, but not limited to, account values and overall range of services provided. Services provided as part of the wrap fee for advisory accounts include, but not limited to: • Access to an IAR for personal service and financial advice • Review of suitability based on client provided information in advisory agreements, new account forms and client interviews. • Portfolio management services • Quarterly and/or monthly custodial account statements • Performance reports available on demand • Execution of client portfolio transactions • Custodial services 4 | P a g e  • Advisory fee billing If the Client holds qualified accounts in the Programs such as IRA or other tax advantaged types, please note the client must carefully monitor their contributions to prevent them from inadvertently exceeding federal limits. The Insurance Carrier will provide all statements and confirmations for the Destination Program. Tax and Impact Overlay Services Envestnet as overlay manager offers Tax Overlay and Impact Overlay services for an additional fee. The client must select the services. If selected by the Client, Envestnet will provide Tax Overlay Services, Impact Overlay Services, or both, to an account or sleeve. Envestnet operates both services in accordance with their policies and procedures as described in the Envestnet 2A Disclosure Brochure. Tax Overlay Services seeks to consider tax implications that detract from the Client’s after-tax returns. The Tax Overlay Service looks to improve the after-tax return for the Client while staying as consistent as possible with the risk/return characteristics provided by the model portfolios. Envestnet evaluates proposed trades in the account and determines if the activity will have an acceptable level of taxable impact to the Client, based on the tax settings that Envestnet has been provided by the Client through their IAR. The gains and losses realized with the trading of Strategies and/or Funds are considered as part of the Tax Overlay in the Program account. Certain Program strategies may also be managed as tax-efficient or tax-aware by the applicable Model Provider. If the Client and their IAR have selected a tax- efficient or tax-aware strategy, the Client should discuss with their IAR whether the Tax Overlay Service is appropriate in that circumstance. Neither HTS, the IAR nor Envestnet assures that tax liability will be reduced or that any indicated limits or mandates will be met. Neither HTS, the IAR nor Envestnet provide tax planning advice or services. Clients should discuss any question with or request further information from their IAR or tax consultant in using the Tax Overlay Service. Impact Overlay Services seek to reflect a client’s own personal values by excluding investments linked to companies that derive revenues from specific business areas or companies that participate in controversial business activities (e.g., negative environmental impacts, human rights violations, corruption). The end goal of the Impact Overlay Service is to align a portfolio with the personal values of the Client, while staying as consistent as possible with the risk/return characteristics provided in the model portfolios. A separate approval must be provided to use the Tax Overlay and Impact Overlay services. When choosing to use either or both services, the Client should consider whether the additional fee, which will be charged on the full balance of the account, is justified by the benefit they receive from the services. The Client may choose to terminate these services at any time. Advisory Accounts available through Envestnet Asset Management, Inc. HTS advisory Programs and services are available through Envestnet Asset Management, Inc. (“Envestnet”), a non- affiliate Investment Adviser registered under the Investment Advisers Act, through its web-based platform. These services in part or whole apply to HTS’s Aviator, Co-Pilot, Passport Series Separately Managed Accounts (“SMA”), Momentum Pathways Unified Managed Account (“UMA”), Gateway Fund Strategist Portfolio (“FSP”), Compass UMA, Endeavor and the Navigator UMA Programs. The services from Envestnet include: • Providing access to a variety of Portfolio Managers, Model Providers and Fund Strategists (Investment Managers) strategies and risk-based asset allocation models available for HTS Programs. This may include the use of Hilltop Securities Portfolio Management (HTSPM) which is a proprietary Investment Advisory Manager operating under Hilltop Securities. • Portfolio trading • Providing billing for all HTS advisory Program accounts • Providing account reporting including but not limited to performance, realized/unrealized gains and losses, account holdings etc. • Account rebalancing • Accepting and acting on reasonable account restrictions 5 | P a g e  IARs will collaborate with their clients to complete a Statement of Investment Selection (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with their clients and provide recommendations regarding the appropriate asset allocation and underlying strategies to meet their objectives. The Clients are directing the investments and changes made to the Program portfolio and are ultimately responsible for the selection of the appropriate asset allocation and underlying Investment Managers strategies. HTS will provide the Client with investment advisory service through one or more of its IARs. HTS will: (i) assist the client with defining financial, risk and objective information; (ii) assist the client with the selection of the Investment Managers; and (iii) review and analyze Client’s Program Account. Investment Managers may receive from HTS certain information from the SIS, which will include, among other information, the Client’s investment objective, risk tolerance and any Client imposed restrictions on management of the Client’s Program Account(s). HTS also may provide Investment Managers with other information regarding the Client, including a copy of the agreement between HTS and the Client. HTS will provide relevant updated information to Investment Managers after receipt of such information from the Client. The Client understands and agrees the Investment Managers shall be retained by Envestnet pursuant to agreements entered into between the Investment Manager. The Client understands that the forgoing Investment Managers (and any such appointed in the future) shall have full discretionary authority over the Program account. Investment Managers will manage the Client’s Program Account the basis of the SIS, the Client’s financial situation and investment objectives and any reasonable restrictions imposed by the Client. Additional services can be provided based on the Program selected. Fees and additional services for each Program are listed below. Aviator and Co-Pilot Program Overview Aviator Program The HTS Aviator Program, a fee-based advisory Program, offers an open architecture platform. This enables the IAR to develop a personalized investment strategy for their clients, manage their customized portfolios, and deliver ongoing investment advice. With Aviator, the IAR can construct a portfolio that consists of a wide assortment of investments including, but not limited to, individual securities, ETFs, mutual funds, and fixed-income positions. In the Aviator Program, the IAR manages the accounts on a discretionary and non-discretionary basis. Only IARs that have been approved to use the Aviator Discretion Program may establish new accounts in the Program. All existing Aviator discretionary accounts will continue to be supported and all policies and procedures detailed in this document will remain in force. The Aviator Program features include: • Customized portfolio and allocations • Account minimum is $30,000 or as accepted. • On-demand performance reporting and other account reports • Trading is done on the Momentum back-office system Co-Pilot Program The HTS Co-Pilot Program, a fee-based advisory Program, offers an Adviser-created model-based platform that requires the use of Envestnet to create a model portfolio within the Client’s risk tolerance and assign that model to accounts. This enables the IAR to develop a personalized investment strategy for their clients, manage their customized portfolios, and deliver ongoing investment advice. With Co-Pilot, the IAR will construct a model portfolio that consists of a wide assortment of investments including, but not limited to, individual securities, ETFs, mutual funds, and fixed- income positions. In the Co-Pilot Program the IAR manages the accounts on either a discretionary or non-discretionary basis. For the accounts to be in the Discretionary Program the IAR must first be approved to participate in the Program. 6 | P a g e  The Co-Pilot Program features include: • Customized model portfolio and allocations • Account minimum is $30,000 or as accepted • On-demand performance reporting and other account reports Trading is done on the Envestnet Platform for eligible Platform securities. In some cases, certain securities will not be traded via the Envestnet Platform. The use of margin in Aviator and Co-Pilot Discretion accounts is not eligible unless first approved by Wealth Management Supervision and ASG. Aviator/Co-Pilot – Methods of Analysis Each IAR has the independence to take the approach they believe is most appropriate when analyzing investment products and strategies for Clients in the Aviator/Co-Pilot Program. There are several sources of information that HTS and/or IARs use as part of the investment analysis process. These sources include, but are not limited to: • Financial publications • Research materials prepared by third parties • Corporate rating services • SEC Filings (annual reports, prospectus, 10-K, etc.) • Company press releases • Regulatory and self-regulatory reports • Other public sources As a firm, HTS does not favor any specific method of analysis over another and therefore would not be considered to have one approach deemed to be a “significant strategy.” There are, however, a few common approaches that HTS or the IAR, often use individually or collectively, while providing advice to Clients. Please note that there is no investment strategy that will guarantee a profit or prevent loss. The following are some common strategies employed in the management of Client accounts: • Dollar Cost Averaging (“DCA”): The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high. Periodic investment Programs cannot guarantee a profit or protect against a loss in a declining market. Dollar cost averaging is a long-term strategy that involves continuous investing, regardless of fluctuating price levels, and, as a result, the Client should consider the financial ability to continue to invest during periods of fluctuating price levels. • Asset Allocation: An investment strategy that aims to balance risk and reward by allocating assets among a variety of asset classes. At a high level, there are three main asset classes—equities (stocks), fixed income (bonds), and cash/cash equivalents— each of which has different risk and reward profiles/behaviors. Asset classes are often further divided into domestic and foreign investments, and equities are often divided into small, intermediate, and large capitalization. The general theory behind asset allocation is that each asset class will perform differently from the others in different market conditions. By diversifying a portfolio of investments among a wide range of asset classes, IARs seek to reduce the overall volatility and risk of a portfolio by avoiding overexposure to any one asset class during various market cycles. Asset allocation does not guarantee a profit or protect against loss. • Technical Analysis (a.k.a. “Charting”): A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value. Instead, they use charts and other tools to identify patterns that can suggest future activity. When looking at individual equities, a person using technical analysis believes that performance of the stock, rather than performance of the company itself, has more to do with the company’s future stock price. It is important to understand that past performance does not guarantee 7 | P a g e  future results. • Fundamental Analysis: A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial, and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security’s value, including macroeconomic factors (e.g., the overall economy and industry conditions) and company-specific factors (e.g., financial condition and management). The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security’s current price, with the aim of figuring out what sort of position to take with that security (underpriced = buy, overpriced = sell or short). This method of security analysis is considered to be the opposite of technical analysis. • Quantitative Analysis: An analysis technique that seeks to understand behavior by using complex mathematical and statistical modeling, measurement, and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically. Some believe that it can also be used to predict real-world events, such as changes in a share price. • Qualitative Analysis: Securities analysis that uses subjective judgment based on no quantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. This type of analysis technique is different from quantitative analysis, which focuses on numbers. The two techniques, however, are often used together. Aviator and Co-Pilot Program Fees Fees for the Aviator and Co-Pilot Program are offered on a wrap fee basis, covering all of HTS’s execution, consulting and custodial services. The maximum Aviator/Co-Pilot Program fee schedule, shown in the table below, is based on the total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire total account value in the determination of the fee. The fee does not cover the fees and expenses of any underlying exchange traded funds (“ETFs”), closed-end funds, mutual funds, unit investment trusts or exchange traded notes (“ETNs”). The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis, and is billed in advance. The Clients’ Program fee will not be adjusted for no or low trading activity. Total Account Value Maximum Annualized Fee for Individual Securities Accounts Up to $249,999 $250,000 – $499,999 $500,000 – $999,999 $1,000,000 and over 2.25% 2.00% 1.75% 1.50% Maximum Annualized Fee for Mutual Fund/ETF/UIT Only Accounts 1.75% 1.50% 1.25% 1.00% If the Client should make any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date they deposit the additional assets, or the Client will receive a pro-rated adjustment or refund of any prepaid fee as of the date of withdrawal. Cash/Money Market and Securities Concentrations Advisory Programs are not appropriate for Clients who want to maintain a high level of cash and/or highly concentrated positions that will not be sold regardless of market conditions. If the Client continues to hold high levels of cash/money market and/or highly concentrated positions, then the Client does so against HTS’s recommendation and with the understanding that the value of those securities will be included for the purposes of calculating the Program fee, resulting in a higher fee to HTS. Clients may hold excess cash or concentrated positions in a brokerage account without incurring the Advisory Program Fee. If the account continues to be outside of the cash and concentration guidelines over a specified period, then the account will be subject to removal from the Program. 8 | P a g e  Unsolicited Transactions The advice and counsel of the clients IAR is a critical service of the Aviator and Co-Pilot Programs. Solicited transactions will be made based on the recommendations that the IAR makes to the client. Unsolicited transactions are made when the client directs the trades without advice or counsel from their IAR. The IAR assumes no responsibility for unsolicited trades, as these transactions are directed by the client absent of advice from their IAR. Unsolicited transactions will impact the performance of the portfolio and future financial planning activities. An unsolicited trading pattern may indicate that the Account is no longer appropriate for a client as they are not leveraging the advice of the IAR. In these situations, HTS has the right to terminate account from the Program. After the client has executed an unsolicited transaction without the advice of the IAR, for so long as they hold that position in their Aviator/Co- Pilot Account, HTS will take that asset into consideration: • As part of the overall account assets, • When HTS provides the Client periodic asset allocation advice, • When HTS values the Client’s account holdings, • When HTS provides analyses and reports on the account’s performance, and • We can also make recommendations to consider selling the asset, when deemed appropriate by HTS HTS will include any holding that is acquired in an unsolicited transaction as part of the clients account assets for calculating their advisory fee. Holdings that remain in the account will continue to be part of each fee cycle calculation until the holding is transferred out or liquidated. Inactive Accounts Aviator/Co-Pilot Program accounts are reviewed on a quarterly basis for trading inactivity for accounts that have been in the Program for over 12 months. If the Clients’ accounts have had zero trades for the trailing 12 months, their IAR will be notified of the inactivity and if the account does not have trading activity by the end of the next quarter review, the account will be subject to conversion to a brokerage account due to the continued inactivity. The reinvestment of Dividends and Capital Gains are not considered trades for this purpose. Mutual Fund Investments available through HTS The Client should be aware that only those mutual fund companies with which HTS has a selling agreement will be available for purchase within a Program account, and may include those fund companies that provide HTS marketing service and support fees, which compensate HTS for marketing efforts to its Clients concerning the mutual funds, as well as for shareholder servicing activities (such as order-taking, responding to customer inquiries, providing confirms, statements, prospectuses and issuer communications) that the mutual funds otherwise would have to provide to customers themselves, and are revenues to HTS in addition to the advisory fee revenue HTS receives from customers. These fees generally range from 0% to .31% (.0031) of the value of on HTS customer assets invested with those mutual fund companies, and when aggregated may be a material revenue source for HTS. As a result, not all mutual funds available to the investing public will be available for investment. However, HTS has selling agreements with over three hundred fund companies. The client should be aware that mutual funds contain internal expenses which are apart from and in addition to Program account fees and which are described in the respective funds’ prospectuses. Certain funds offered in the Program, while not having sales charges or having sales charges waived, assess distribution fees, such as those assessed pursuant to SEC Rule 12b-1 of the Investment Company Act of 1940, as amended (“12b-1 Fees”) which are paid to HTS. To the extent that HTS receives 12b-1 shareholder servicing fees in any Managed Accounts, they will be rebated to Clients. The respective mutual fund prospectuses provide detailed information about such fees. Eligibility for various share classes offered by mutual funds to be used as part of the Advisory Services Group (“ASG”) Programs, is determined by the mutual fund company and disclosed in the fund’s prospectus. Rule 12b-1 fees will be rebated to Client accounts as they are received. Use of a more costly share class will reduce the performance of a client’s account. Any recommendation to use a more costly share class when a lower cost share class of the same fund is available is a conflict of interest. HTS mitigates this conflict in that advisors do not have an incentive to recommend or select share classes that have higher expense ratios because their compensation is not affected by the share class 9 | P a g e  selected. Shareholders considering transferring mutual fund shares to or from HTS should be aware that if The Firm from or to which the shares are to be transferred does not have a selling agreement with the fund company, the shareholder must either redeem the shares (potentially incurring a tax liability) or continue to maintain an investment account at The Firm where the fund shares are currently being held. Clients should inquire as to the transferability, or “portability,” of mutual fund shares prior to initiating such a transfer. Upon termination of their Managed account, Clients would generally be permitted to continue holding the institutional class of the fund but will be unable to make additional investments. Mutual Funds Assessed / Subject to 12B-1 Fees or Sales Charges HTS will convert existing advisory fee-eligible mutual fund positions in the Aviator, Co-Pilot, and Navigator UMA Program accounts to a specific mutual fund share class (“wrap recommended share class”) in an effort to provide advisory Clients with lowest cost share class available through HTS. HTS will perform ongoing maintenance conversions to ensure the wrap recommended share class has been selected for the Client’s account. These share class conversions are non-taxable events, and Client’s cost basis will carry over to the new wrap recommended share class. Passport Series SMA/Momentum Pathways UMA The Passport Series SMA and Momentum Pathways UMA are discretionary investment advisory Programs sponsored by HTS (“Sponsor”), available through it IARs that provides the Client access to a broad selection of Separately Managed Accounts (“SMAs”) and Unified Managed Account strategies (“UMAs”). Passport Series and Momentum Pathways are made available with Envestnet Asset Management, Inc. (“Envestnet”), a non-affiliate Investment Adviser registered under the Investment Advisers Act, through its web- based platform. As manager of the web-based platform, Envestnet has entered into a sub-management agreement with Investment Managers to manage various types of portfolios offered through the platform and to develop model portfolios and research that is made available to Sponsor, IARs and IAR Clients. For certain Investment Managers, Envestnet has entered into a licensing agreement with the manager, whereby Envestnet performs administrative and/or trading duties pursuant to the direction of the Investment Manager. In such situations the Investment Manager is acting in the role of Model Provider. The Investment Managers are responsible for all investment selections made for the portfolios they create. It is up to the Client to select a third-party model portfolio. Unless Envestnet affirmatively cites the Investment Manager as “approved” as described below in Methods of Analysis section, Envestnet does not collect and report data on investment style and philosophy, past performance, and personnel of Investment Managers. IARs will collaborate with their clients to complete a Statement of Investment Selection (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with clients to provide recommendations regarding the appropriate asset allocation and underlying strategies to meet their objectives, but clients are directing the investments and changes made to the Program portfolio and are ultimately responsible for the selection the appropriate asset allocation and underlying Investment Managers’ strategies. The Passport Series SMA Program is a discretionary Program where the Client is offered access to actively managed investment portfolios managed by Investment Managers. Unlike a mutual fund, where funds are commingled, a separately managed account is a portfolio of individually owned securities that can be tailored to fit the stated investing preferences. IARs will work with the Client to complete a Statement of Investment Selection (“SIS”) which includes a Risk Tolerance Questionnaire. The purpose of this statement is to establish an understanding between the Client, HTS and Envestnet regarding the investment objectives, goals, and guidelines for the Client’s investment management account. This will also assist the Client with the selection of the Investment Manager(s). The Investment Managers who are selected for these Programs employ different methods of analysis that are described in each manager’s disclosure brochure. The HTSPM strategies are available along with the other unaffiliated Investment Managers. The Momentum Pathways UMA Program is a discretionary Program that provides the Client access to combine a broad selection of Investment Managers as well as a Co-Pilot account sleeve over which their IAR may exercise limited trading discretion in a single portfolio. The IAR will provide the Client with recommendations regarding the 10 | P a g e  appropriate asset allocation and underlying investment vehicles or investment strategies to meet their objectives, but the Client is making the selection of the Investment Managers and changes made to the UMA portfolio and are ultimately responsible for the selection of the appropriate asset allocation and underlying investment strategies. Envestnet provides overlay management services for UMA accounts and implements trade orders based on the directions of the investment strategies contained in the UMA portfolio. The Clients’ IAR will assist in creating a customized portfolio, providing the Client with recommendations regarding the asset allocation and underlying investment strategies. The Client shall select the asset allocation and the investment strategies. The asset managers who are selected for this Program employ different methods of analysis that are described in each manager’s Disclosure Brochure. In addition, to the extent that other investment vehicles are utilized in the portfolio such as mutual funds or ETFs. The Client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the company associated with the investment. The HTSPM strategies are available along with the other unaffiliated Investment Managers and Model Providers. HTS reserves the right to remove any Investment Manager from the Passport Series and Momentum Pathways Programs without prior notice to the Client. Factors involved in HTS’s decision to remove any Investment Manager include failure to adhere to a management style or the Client objectives, a material change in the adviser’s professional staff, unexplained poor performance, dispersions of the account performance, or HTS’s decision to no longer include the Investment Manager on the roster. HTS will determine whether any or all these factors are material when deciding whether to recommend termination. The Client can elect to remove an Investment Manager from their account at any time. Information HTS collects regarding any Investment Manager is believed to be reliable and accurate, but HTS does not necessarily independently review or verify it on all occasions. While performance results are generally reported to HTS, HTS does not audit or verify that these results are calculated on a uniform or consistent basis as provided to HTS. HTS also provides the Client with monitoring and on demand reporting of portfolio performance on an on- demand basis. for the Passport Series and Momentum Pathways Program accounts. As described above, the Client may select the Tax Overlay Service within this Program which will incur an additional cost to the Client. Additionally, as described above, the Client may select the Impact Overlay Service within this Program, which will include an additional cost to the Client. Passport Series and Momentum Pathways Program Fees These Programs charge an annual fee, out of which HTS pays for all portfolio management and administration, including Envestnet, Investment Manager Fees, and fees payable to the Sponsor and Sponsors IARs, as well as costs for transaction execution, clearing, custody and reporting. The Investment Manager’s fee will generally fall within a range of 0.15% to 0.75% (annual rate) of assets under management. The fee payable to HTS, as the Sponsor, will generally fall within a range of 0.10% to 0.38% (annual rate) of assets under management. The Program fee will not be adjusted if the manager trades away from HTS. The level of fee will vary with the amount of assets under advisement in the Programs and the particular investment styles and investment options chosen or recommended. Clients could receive comparable services from other sources for fees that are lower than those charged by HTS. The maximum fee schedule for the Passport Series and Momentum Pathways Program services is set forth below and is negotiable in individual cases: Total Account Value Maximum Annualized Fee for Fixed Income SMA Portfolios Maximum Annualized Fee for UMA account First $ 250,000 Next $ 250,000 Next $ 500,000 Next $ 4,000,000 Over $ 5,000,000 Maximum Annualized Fee for Equity/Balanced SMA Portfolios 2.90 – 3.00% 2.40 – 2.50% 2.15 – 2.25% 1.90 – 2.00% 1.75 – 1.85% 1.55 – 1.65% 1.40 – 1.50% 1.25 – 1.35% 1.05 – 1.15% 0.90 – 1.00% 2.35% 2.30% 2.10% 1.90% 1.70% 11 | P a g e  * The total fee charged to Client’s account(s) will vary depending upon the selection of Investment Managers and allocation of total portfolio assets thereto, the total amount of portfolio assets in the Program and other factors. Additions and Withdrawals from a Passport Series or Momentum Pathways Account If the Client makes any deposit or withdrawal of $10,000 or more during a fee period, the Client will be debited or credited a pro-rated fee on the market value of the assets deposited or withdrawn. The pro-rated amount will be due and charged to the account on the date the Client deposits the additional assets, or the Client will receive a pro-rated adjustment of refund of any prepaid fee as of the date of the withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Hilltop Securities Portfolio Management (HTSPM) Types of Services Provided by Hilltop Securities, Inc. as Portfolio Manager In addition to offering advisory services through our Wrap Fee program described above, HTS makes available certain separately managed accounts (SMA) offered through Hilltop Securities Portfolio Management (HTSPM). HTSPM is proprietary investment advisory service operating under Hilltop Securities, Inc., a registered Investment Adviser and registered broker dealer. HTSPM provides discretionary investment advisory services and offers several fixed income strategies available in the Passport Series SMA and Momentum Pathways UMA Programs (Program) to individuals, high net worth individuals, families, trusts, estates, corporate and non-corporate entities, retirement plans, pension plans, profit-sharing plans, and government entities. HTSPM strategies may also be available to non-affiliated Correspondent firms who have access through the Envestnet Platform. The availability of the strategies for their firms is at the sole discretion of the Correspondent firm for their IAR and Client use. HTSPM acts as Sub-Advisor to HTS registered Investment Adviser Representatives (IAR), where the IAR selects one or more of HTSPM’s fixed income strategies for their client’s program account based on the Statement of Investment Selection (SIS). HTS relies on such strategy selection by the client’s IAR, and the information captured in the SIS. HTSPM will begin providing investment advisory services to clients upon the creation of the Program Account, completion of the SIS as accepted by HTS and Envestnet Asset Management, in accordance with the fixed income strategy selected, and any applicable restrictions of the Client. Our investment advisory services may be terminated by either party in accordance with any applicable contractual notice provision. Minimum Investment The minimum initial investment for an account managed by HTSPM is $125,000, which may be waived at HTS and HTSPMs sole discretion. Level of Service Offered by HTSPM HTSPM manages its investment advisory accounts in accordance with HTS fixed income strategies. HTSPM permits the Client to identify reasonable restrictions on the Client’s Program account. However, such restrictions may have a significant impact on the timing of Client’s strategy implementation, yield, diversification, and account performance. HTS and HTSPM, may decline all or some of the Client’s restrictions. HTSPM Fees and Compensation HTSPM receives a management fee based on a percentage of assets under management for providing investment advisory services to the accounts in the Program. HTSPM does not charge performance-based fees on Program Accounts. These HTSPM fees will be detailed and incorporated on the Client’s SIS and included in the Annual Fee that the Client is charged by HTS. Other Compensation HTSPM does not charge commissions, markups, or mark-downs to the Client’s participating in the Program. HTSPM Methods of Analysis HTSPM makes available several fixed income strategies in the Passport Series SMA and Momentum Pathways UMA Programs that primarily invest in tax-free municipal bonds. HTSPM considers many factors in analyzing and constructing fixed income portfolios. These include, but are not limited to maturity, coupon, ratings, sector, duration, 12 | P a g e  callability, yield, spread to various benchmarks, and liquidity. HTSPM Short Municipal Ladder The investment objective is to generate tax-efficient income consistent with low principal volatility through investment in short maturity fixed income securities. The strategy invests primarily in tax-exempt municipal bonds with a maximum maturity of 5 years with an objective of approximately equal maturity amounts each year. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. The Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after-tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Short Municipal Ladder Strategy: National and California. HTSPM Short-Intermediate Municipal Ladder The investment objective is to generate tax-efficient income consistent with low principal volatility through investment in short to intermediate fixed income securities. The strategy invests primarily in tax-exempt municipal bonds with a maximum maturity of 10 years with an objective of approximately equal maturity amounts each year. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. The Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after-tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Short-Intermediate Municipal Ladder Strategy: National and California. HTSPM Intermediate Municipal Ladder The investment objective is to maximize tax-efficient income consistent with limited principal through investment in intermediate fixed income securities. The strategy invests primarily in tax-exempt municipal bonds with a maximum maturity of 17 years with an objective of approximately equal maturity amounts spread across the investment horizon. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. The Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after-tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Intermediate Municipal Ladder Strategy: National and California. HTSPM Full Curve Municipal Ladder The investment objective is to maximize tax-efficient income through investment in fixed income securities across the entire maturity spectrum. The strategy invests primarily in tax-exempt municipal bonds with a maximum maturity of 30 years, an objective of approximately equal maturity amounts spread across the investment horizon. Under certain circumstances the strategy will also permit customization of certain portfolio parameters (maturity, minimum ratings, geographic concentration, or avoidance) at client request. The Client may choose to opt into the Optional Tax-Aware Management Strategy, which incorporates the use of taxable securities (treasuries, agencies, and taxable municipal bonds) to maximize after-tax yield based on client federal and state tax brackets. There will be two versions of the HTSPM Full Curve Municipal Ladder Strategy: National and California. HTSPM Flexible Maturity Strategy The investment objective is to establish a high-quality municipal bond strategy for Clients who have a flexible maturity profile. HTSPM will not impose maturity structure onto accounts within the strategy. HTSPM will consult with the IAR and the Client to create maturity parameters. The strategy will remain consistent with the HTSPM Municipal Ladders Strategies, which emphasize high credit quality and disciplined risk management through strong multifactor diversification. The agreed upon custom maturity parameters will be documented in the HTSPM Account 13 | P a g e  Customization form. Neither HTSPM, HTS, nor their IARs provide tax or legal advice. Each Client’s tax or financial situation is different, and the Client is advised to consult with their tax or legal advisor for advice and information specific to their individual situation. HTSPM Portfolio Risks Fixed Income Securities Risks: Portfolios will invest in a variety of fixed income securities. Fixed income securities are subject to a number of risks including credit risk, interest rate risk, and liquidity risk. • Credit risk is the risk the issuer or guarantor of a debt security will be unable or unwilling to make timely payments of interest or principal or to otherwise honor its obligations. • Interest rate risk is the risk of losses due to changes in interest rates. In general, the prices of debt securities rise when interest rates fall, and the prices fall when interest rates rise. • Liquidity risk is the risk that a particular security may be difficult to purchase or sell and that an investor may be unable to sell illiquid securities at an advantageous time or price. Duration measures the change in the price of a fixed income security based on the increase or decrease in overall interest rates. Bonds with higher duration generally carry more risks and have higher price volatility than bonds with lower duration. Therefore, if interest rates are low at the time of purchase of the bonds, when interest rates eventually do rise, the price of such lower interest rate bonds will decrease, and anyone needing to sell such bonds at that time, rather than holding them to maturity, could realize a loss. It should be noted that HTSPM does not explicitly forecast interest rates. Municipal bonds may also have a call feature, entitling the issuer to redeem the bond prior to maturity. A callable security’s duration, or sensitivity to interest rate changes, decreases when rates fall and increases when rates rise because issuers are likely to call the bond only if the rates are low. Investors in callable bonds are therefore subject to reinvestment risk – that is, the risk that they will need to reinvest their proceeds at lower rates. Municipal bonds are also subject to state-specific risks, such as changes in the issuing state’s credit rating, as well as the risk that legislative changes may affect the tax status of such bonds. Tax-Exempt Securities Risks: Portfolios may also invest in tax-exempt municipal bonds. In order to pay interest that is exempt from federal or state and local income tax, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed to bond holders to be taxable. In addition, income from one or more municipal bonds held in a Portfolio could be declared taxable because of unfavorable changes in tax or other laws, adverse interpretations by the Internal Revenue Service (IRS), state, or other tax authorities, or noncompliant conduct of a bond issuer. Changes or proposed changes in federal or state income tax or other laws may also cause the prices of tax-exempt securities to fall. Finally, income from certain municipal bonds may be subject to the alternative minimum tax (AMT) and/or state and local taxes, based on the investor’s state of residence. Municipal Securities Risks: Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions (as discussed under Tax-Exempt Securities Risk above), and by uncertainties and public perceptions concerning these and other factors. In recent periods, an increasing number of municipal issuers in the United States have defaulted on obligations and commenced insolvency proceedings. Financial difficulties of municipal issuers may continue or get worse. The potential tax benefits of a tax free or tax deferred investment are eliminated if the investment is made in a qualified plan, such as a 401(k) or IRA. 14 | P a g e  Investing Side by Side with Clients HTSPM Portfolio Managers and its support personnel are not permitted to trade in the same fixed income securities as those that HTSPM manages for investment advisory clients in the Program. Brokerage Practices & Best Execution Factors in Brokerage Selection HTSPM has the authority to select brokers for the execution of transactions in customer accounts in accordance with our obligation to seek “best execution” (i.e., seeking the most favorable overall price and execution under the circumstances existing at the time of the transaction). HTSPM selects brokers based on both quantitative and qualitative factors, firm size, underwriting activity, and inventory/trading considerations – as well as any other factors deemed appropriate. Transactions with brokers are also subject to periodic random sampling for review, to confirm that HTSPM is receiving services that are competitive and consistent with other transactions in the market. HTSPM has discretion to select broker-dealers to execute trades for client accounts. However, HTSPM will not transact securities transactions with Hilltop Securities, Inc. or its affiliate, Momentum Independent Network, Inc. Best Execution In placing orders for the purchase and sale of securities and directing brokerage to affect these transactions, HTSPM’s primary objective is to seek prompt execution of orders at the most favorable prices reasonably obtainable. HTSPM’s participation in the Passport Series and Momentum Pathways Programs have discretion and will direct trades to be executed by broker-dealers other than HTS. In some instances, these trades are executed by the other firms without any additional commission or markup or markdown, but in other instances, the executing firm imposes a commission or a markup on the trade. For certain trades in a client’s account with a broker-dealer where the broker-dealer imposes a commission or equivalent fee on the trade (including a commission embedded in the price of the investment), the client will incur trading costs in addition to the Advisory Fee. HTSPM is a party to the trades and may be in a position to negotiate the price or transaction-related cost(s) with the broker, dealer or bank selected by HTSPM for these trades. A Client’s trade order so executed is then cleared and settled through HTS. In seeking best execution, HTSPM is not obligated to choose the broker-dealer offering the lowest available price in all instances if, in our reasonable judgment, (i) we believe the total costs or proceeds from the transaction might be less favorable than could be obtained elsewhere or (ii) other considerations, such as the order size, the time required for execution, the depth and breadth of the market for the security, minimum credit quality requirements to transact business with a particular broker-dealer, or the quality of the broker-dealers back office or other considerations support our decision to use a different broker-dealer. Securities transactions in Client accounts participating in the HTS Programs are generally affected on a "net" basis (i.e., without commissions), and a portion of the fee is generally paid for advisory services provided. Clients will generally pay an asset-based fee for the brokerage/custody/clearing services provided by HTS as the broker/custodian (as opposed to transaction-based fees such as commissions), and those fees are generally included in the Program Fee for a Client. Research and Soft Dollar Arrangements: HTSPM does not utilize soft dollar arrangements. Therefore, HTSPM does not have an incentive to select or recommend a broker-dealer based on our interest in receiving research services or other soft dollar arrangements. Directed Brokerage: HTSPM has discretion to select broker-dealers to execute trades for clients’ accounts. However, HTSPM does not permit Investment Advisory Clients to direct securities transactions to particular brokers or dealers. If we select a broker-dealer to execute a trade, the Client will typically be responsible for any execution costs charged by that other broker-dealer in addition to the wrap fee paid to HTS. HTSPM manages client portfolios as a fiduciary on a fully discretionary basis on behalf of its clients. As a fiduciary, HTSPM owes each client a duty of loyalty and care with respect to client transactions. 15 | P a g e  Trading and Allocation As a fiduciary to each Client, HTSPM owes each Client the same duty of loyalty. Consistent with this duty, HTSPM does not give one Client or a group of Clients preference over others. This is particularly true when HTSPM trades the same security for several Client accounts. HTSPM has developed appropriate, predetermined allocation procedures so as to minimize the risk that any particular Client would be systematically advantaged or disadvantaged by the aggregation or allocation of orders and to promote fairness and equity for all Clients. HTSPM portfolio managers have the responsibility of implementing all investment decisions in a manner most advantageous to Clients. Technological and operational systems assist in making the execution process more efficient. Each investment decision and the resulting securities transactions must be treated as a dynamic and unique occurrence. Where HTSPM has full discretion, fixed income trades are executed on a net basis. Bids and offers are gathered from competing firms and are executed when the levels offered are in-line with HTSPMs expectations. Aggregation of the Purchases and/or Sale of Securities for Program Assets: HTSPM will often aggregate accounts into block trades, both purchases and sales, in order to gain more advantageous pricing for Clients and to ensure a consistent execution process across portfolios. In order to ensure transactions are fair, equitable and allocated without preference, HTSPM uses functionality within its portfolio management software to prioritize and allocate securities. This functionality utilizes both quantitative and qualitative factors, the most common of which are: maturity, coupon, callability status and date, ratings, state of domicile of both the security and the account(s), duration, sector, percent of uninvested cash available in the account, age of uninvested cash in the account, and degree to which a trade moves an account towards greater conformity with portfolio strategy parameters. The goal of this approach is to ensure that all clients are treated fairly and equitably. Purchase Allocation Procedures: HTSPM allocates across client portfolios by prioritizing based on multiple factors including maturity, coupon, rating, call factors, state of domicile of the security and the account, duration, sector, percent of uninvested cash in each account, the age of uninvested cash in each account, and the degree to which a trade moves an account towards greater conformity with management strategy Parameters. In most cases, trades are allocated on a pro-rata basis. In certain circumstances, the Portfolio Manager may choose to allocate securities on other portfolio level factors. In those cases, the Portfolio Manager will document the reasoning for allocating on a different basis and will retain documentation of the rationale for the trade within the portfolio management software. Selling Allocation Procedures for All HTSPM Strategies: Most sales are account-specific and are related to client liquidity needs within a particular account. In cases where accounts are aggregated into a block sale, the accounts will be chosen in advance and the block will generally be sold in its entirety. In rare instances, there may be a partial sale of a block resulting in some portion of securities not being sold. In those cases, the preferred allocation method will be a pro rata allocation. In some instances, there may be adjustments made to that pro rata allocation, including account(s) that were included in the block due to specified liquidity needs, the size remaining in an account after the trade which will impact liquidity of the remaining position, and other factors. In some cases, the portfolio manager may choose to allocate based on other portfolio-level factors, taking into account the rationale for the trade, amount of cash in the portfolio(s) pre- and post-trade, and which accounts will be moved towards greater conformity with strategy guidelines. In all cases, when a trade is allocated on anything other than a pro rata basis, the rationale and supporting documentation will be retained. Pre-Allocated Trades: In certain trades, a portfolio manager may create a block order for bonds that may get only partially filled. In those cases, accounts will not receive the full allocation desired. The resulting smaller allocation will usually be done using the following methods: 1) pro rata allocations, with possible adjustments due to minimum block sizes and other considerations or 2) re-running the allocation process based on one of the allocation rules that prioritizes accounts according to need. The portfolio manager will retain documentation about which method and allocation rules were 16 | P a g e  used. Trade Errors HTSPM has a fiduciary obligation to handle portfolio management and trading decisions in an accurate manner. In the event of a trade error, HTSPM will make all reasonable efforts to promptly correct the trade error. This may include canceling the trade, adjusting an allocation, and reimbursing the account. HTSPM Review of Accounts Periodic Review of Client Accounts: Client accounts are reviewed periodically in several ways. On a monthly basis, all accounts are screened in order to determine conformity with strategy and account-specific guidelines. On an annual basis, each account is reviewed more formally to confirm account guidelines, review drift from strategy targets and determine what steps, if any, are needed to mitigate. Custody All Client Program assets will be custodied with Hilltop Securities, Inc. as qualified custodian. Investment Discretion HTSPM manages fixed income Separately Managed Accounts (SMAs) on a discretionary basis for retail clients. The portfolios consist primarily of tax-exempt municipal bonds, but also may include US Treasury, Agency, and taxable municipal bonds. HTSPM manages the client portfolio in accordance with the strategy and objectives of the selected product, subject to any specific customization requested by the advisor. Voting Client Securities HTSPM does not vote or submit proxies for client accounts. Conflicts of Interest As a diversified, full-service financial services firm that engages in a wide array of activities including investment advisory services, investment management activities, investment banking, and other activities, Clients should be aware that there will be occasions when Hilltop Securities encounters potential and actual conflicts of interest in connection with its investment management services. We have adopted internal policies and procedures reasonably designed to identify and address these types of conflicts to the fullest extent possible. Since HTSPM is a proprietary investment advisory service operating under Hilltop Securities, Inc., we have a conflict of interest when HTS IARs recommend HTSPM versus a nonaffiliated third-party manager. Any Product Fee received by HTSPM is attributable to HTS and its profitability, which can impact the compensation of HTS employees. Moreover, our IARs may develop close personal relationships with employees and associated persons of HTSPM and, as a result, may be inclined to recommend HTSPM over a third-party manager. To mitigate this conflict, HTS does not additionally pay our IARs on the basis of recommendations of HTSPM or other affiliated products. To further mitigate this conflict, the fee charged to Clients utilizing and HTSPM strategy in the Program will be similar or the same as like third party managers, (i.e., Product Fees to utilize the services and/or Portfolios of HTSPM is comparable to Product Fees associated with third party managers). On occasion, HTSPM strategies may invest clients in bonds where HTS acted as an underwriter in the initial bond offering. In those instances, HTSPM strategies are prohibited from purchasing bonds in the primary market and only allowed to purchase in the secondary market in an agency capacity with no additional mark-up or commission. Gateway FSP – Fund Strategist Portfolios The Gateway FSP Program is an investment advisory Program sponsored by HTS (“Sponsor”) that provides the Client access to a selection of Fund Strategist Portfolios (“FSP”) managed on a discretionary basis. The Program will provide adviser’s access to investment strategists who construct distinct portfolio solutions to help meet the ever-increasing demands of today’s investors. They typically comprise a set of mutual funds and/or exchange-traded funds (ETFs). Gateway FSP solutions espouse various approaches to portfolio construction and asset allocation, whereas most Gateway FSP portfolios employ a long-term, strategic asset allocation approach, others take a dynamic or tactical approach and actively shift allocations in order to take advantage of short-term market movements (these approaches are referred to below as the “Strategy” or “Strategies”). The Client’s IAR will assist in selecting one or more FSPs 17 | P a g e  from a roster based on the Client’s financial situation, investment objectives and risk tolerance. HTS also provides the Client with monitoring and reporting of portfolio performance on an on-demand basis. IARs will collaborate with their Clients to complete a Statement of Investment Selection (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with Clients to provide recommendations regarding the appropriate asset allocation and underlying strategies to meet their objectives, but clients are directing the investments and changes made to the Program portfolio and are ultimately responsible for the selection the appropriate asset allocation and underlying Fund Strategist Portfolios. For each model portfolio, the FSP determines the Strategy, including the underlying mutual funds or ETF’s to be used for each Strategy, the allocation of assets, and the investment advisory firms (“Money Managers”) responsible for managing the assets. The FSP will make changes to their underlying Strategies; and periodically can change the Money Managers for the portfolio and/or the allocation of assets to the various Money Managers. At HTS’s discretion, HTS will implement the changes proposed by the FSP. Fund–selected Investment Managers are terminated or replaced by the FSP generally due to changes in senior investment personnel and/or a deviation from the desired investment discipline. Such changes to fund investments are made without prior notice to the Client. HTS reserves the right to remove any FSP from the Gateway FSP Program without prior notice to the Client. Factors involved in HTS’s decision to remove an FSP include failure to adhere to a management style or the Client objectives, a material change in the adviser’s professional staff, unexplained poor performance, dispersions of the account performance, or HTS’s decision to no longer include the FSP on the roster. HTS will determine whether any or all of these factors are material when deciding whether to recommend termination. The Client can elect to remove an FSP from their account at any time. Information HTS collects regarding any FSP, mutual funds, or ETFs is believed to be reliable and accurate, but HTS does not independently review or verify it on all occasions. While performance results are generally reported to HTS, HTS does not audit or verify that these results are calculated on a uniform or consistent basis as provided. HTS also provides the Client with monitoring and on demand reporting of portfolio performance on a periodic basis for Gateway FSP Program accounts. As described above, the Client may select the Tax Overlay Service within this Program which will incur an additional cost to the Client. Additionally, as described above, the Client may select the Impact Overlay Service within this Program which will incur an additional cost to the Client. Passport Series/Momentum Pathways/Gateway FSP Methods of Analysis HTS relies on Envestnet for analysis, information, asset allocation strategies and the identification, selection, and monitoring of Investment Managers. Envestnet is responsible for the selection of Investment Managers offered on the Passport Series/Momentum Pathways/Gateway FSP platforms. Envestnet seeks Investment Managers with a variety of investment strategies available. Some strategies are higher-risk and are not intended for all Clients. Clients who choose to follow higher-risk strategies should know that there is a possibility of significant loss. Please review Envestnet’s and the Investment Managers Form ADV Part 2A for more information about its advisory business. Investment Managers offered by Envestnet are considered “Approved” or “Available,” depending on the level of due diligence performed. “Approved Investment Managers” are evaluated using data and information from several sources, including independent databases. Among the types of information analyzed are historical performance and volatility, and qualitative factors such as the Approved Investment Manager and investment vehicle’s reputation and approach to investing. Envestnet also reviews the Investment Managers Form ADV Part 2A and portfolio holding reports. To ensure accuracy, Envestnet attempts to verify all information by comparing it to publicly available sources. In addition to Approved Investment Managers, Envestnet also makes available certain Investment Managers for which Envestnet has not performed due diligence. These Investment Managers are categorized as “Available Investment Managers” and Envestnet makes no recommendations concerning Available Investment Managers. The client’s IAR will recommend and perform their own research on Investment Managers and investment vehicles that it believes are most appropriate for the Client’s individual circumstances. 18 | P a g e  Envestnet uses a quantitative process that measures risk and return measures for each portfolio versus its investment style peers via a ranking methodology. This ranking methodology is updated each quarter for all Investment Managers. The result of this review can result in the risk score being changed to a higher or lower risk. Envestnet notifies HTS of these reviews. The Client and the Client’s adviser should review this information, and in certain cases where the risk score materially changes, updated paperwork may be required. Before an Investment Manager is made available for the Passport Series/Momentum Pathways/Gateway FSP Program, general research is conducted by HTS to determine eligibility. This includes, among other things, assets under management, inception date of Strategy, manager tenure, investment style and performance factors. HTS also reviews investment philosophy and process, trading practices, fundamental and quantitative statistics of the Strategy. In some cases, HTS may also conduct interviews with Investment Managers, principals, and key staff members. HTS conducts an annual review of Investment Managers. This review is based on applicable information gathered from various sources that include, but are not limited to, disclosure documents, performance, assets under management and other applicable criteria. As a result of these reviews, HTS can request that Envestnet take corrective action to address such concerns. From time to time, these reviews also result in the removal of an Investment Manager being available to HTS Clients. For additional information, please refer to the Investment Managers and/or Envestnet Asset Management’s disclosure brochures. Gateway FSP Program Fees Fees for the Gateway FSP Program are offered on a wrap fee basis, covering execution, consulting, and custodial service as well as fees for services for each Investment FSP. Additional fees may be charged by HTS for certain administrative actions such as wire transfers. The maximum Gateway FSP fee schedule, shown in the table below, is based on total account value (“Account Value”) and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire Account Value for the purposes of determining the fee rate. The fees do not cover the fees and expenses of any underlying investments used by the appointed Investment Manager. The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis and is billed in advance. HTS compensates FSPs from 0.15% to .60% annually based on total aggregate Client dollars with each FSP. In some cases, the Investment Managers are compensated directly from the operating expenses of the underlying proprietary funds that are used in the portfolios. These FSPs are not compensated directly from HTS. HTS has a conflict of interest to recommend selections of management styles and advisers that would result in a lower percentage of advisory fees. HTS intends, however, to make all recommendations independent of such fee consideration and based solely on HTS’s obligations to consider the Client’s objectives and needs. The fees are calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis and is billed in advance. A portion of any fees received by HTS will be paid to the IAR. HTS can keep between 0 to 100% of the fee and pay the remaining portion to the IAR as agreed upon with each IAR. This amount will vary depending on a number of factors including negotiated agreements, assets under management or other factors as determined by HTS. The fee schedule shown in the tables below, are based on Account Value and are negotiable. The fee schedule for Gateway FSP is not applied incrementally; the corresponding rate is applied to the entire Account Value in determining the fee. The fees do not cover the fees and expenses of any underlying ETFs, closed-end funds, mutual funds, UITs or exchange traded notes (“ETNs”) or fees for ancillary services such as wire transfers, returned checks, etc. nor does it cover all applicable exchange fees or option reporting fees. Program fees will not be adjusted for no or low trading. 19 | P a g e  The maximum fee schedule for the Gateway FSP Program services is set forth below, but is negotiable in individual cases: Maximum Annualized Fee Total Account Value Fixed Income Portfolios Mutual Funds ETF/Equity/Balanced Portfolio Up to $249,999 $250,000 – $499,999 $500,000 – $999,999 $1,000,000 and up 3.00% 2.50% 2.00% 1.85% 1.65% 1.50% 1.35% 1.15% 1.75% 1.50% 1.25% 1.10% Additions and Withdrawals from a Gateway FSP Account If the Client makes any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date of the deposit of the additional assets, or they will receive a pro- rated adjustment or refund of any prepaid fee as of the date of withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Compass UMA Program The Compass UMA Program (“Compass UMA Program” is a non-discretionary Program that provides the Client access to several risk-based asset allocation models. The IAR will provide the Client with recommendations regarding the appropriate asset allocation and underlying investments of mutual funds and ETFs to meet the account objectives, but the Client is making the final selection of the investment allocation model and underlying funds and changes made to the Compass UMA Program portfolio and are ultimately responsible for the selection of the appropriate risk-based asset allocation model and underlying investment funds. Envestnet provides overlay management services for UMA accounts and implements trade orders based on the semi-annual or annual rebalance discipline as well as transactions directed by the Client and their IAR. The Clients IAR will assist the Client in completing the SIS; create the asset allocation portfolio; and provide the Client with recommendations regarding the risk-based asset allocation and underlying investments. The Client shall select the asset allocation and the investment strategies. The Client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the mutual funds and ETFs that the Client has selected. Compass UMA Program Methods of Analysis HTS maintains a list of mutual funds and ETFs eligible to participate in the Compass UMA Program. The Client’s IAR will research and recommend funds from an eligible funds list for the Client’s account based on the stated risk tolerance, risk-based asset allocation model selected and investment objectives. Each adviser has a different philosophy or criteria in the review and selection of investment products. Periodically the list is reviewed by HTS, and funds may be removed, or new funds may be added as deemed appropriate. For mutual funds that are no longer open to new and/or additional investments, Clients that maintain a position are permitted to continue to do so as deemed appropriate by the IARs of HTS. HTS makes available several Compass UMA risk-based asset allocation models that the Client and the Client’s IAR will choose from. The IAR will work with the Client to determine a model, the underlying funds and select either the required semiannual or annual rebalancing. The Rebalancing Process The Client will have the option to either have the account rebalanced semiannually or annually. Envestnet will review all Compass UMA Programs based on the Client’s selection of semi-annual or annual rebalancing at inception of the account and identify accounts that have not been rebalanced. If an account has been determined to have any position outside of the drift tolerance set by HTS the account will be rebalanced. If an account has no positions outside of the drift tolerance no trades will be made and the rebalance clock will be reset. Trades will be done to maintain the Client’s 20 | P a g e  target asset allocation among the mutual funds and/or ETFs. The Client’s affirmative consent is not required to implement these changes. Rebalancing will be accomplished by selling the shares of the over weighted fund(s) and purchasing a corresponding dollar amount of the appropriate underweighted fund(s). Adviser and Client are free to direct a rebalance as they choose, but the account will be automatically reviewed and rebalanced at least on a semiannual or annual or basis as selected by the Client. When the account is rebalanced, the calendar is reset with a new semiannual or annual review now established. HTS reserves the right to change the drift tolerance as the model portfolios/accounts are reviewed for activity. A rebalance of the account will also take place when the Client directs HTS to raise cash for a withdrawal or the Client makes a deposit to the account that results in the cash balance being low or high. All deposits made to the account will be deemed eligible for immediate investment and the Client will be responsible for any losses that may arise from a deposit in error. Envestnet as the overlay trading manager will be taking discretion when placing the trades directed by the Client and their adviser as well as rebalancing the account either semi-annually or annually. Fund Changes Changes to the mutual funds and/or ETFs utilized for investment within the Compass UMA Program account will require the Client’s prior consent. All such change requests received by Envestnet prior to 12:00 pm CST will be processed the same day on a best effort’s basis. Requests received by Envestnet after 12:00 pm CST will be processed by 12:00 pm CST the following trading day. Rebalancing or fund changes may result in tax consequences to the account holder including, but not limited to, the realization of capital gains, and/or losses regarding the sale of fund shares. Compass UMA Program Fees Fees for the Compass UMA Program are offered on a wrap fee basis, covering all of HTS’s execution, consulting, and custodial services. The maximum Compass UMA Program fee schedule, shown in the table below, is based on total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire account value for the purpose of determining the fee rate. The fees do not cover the fees and expenses of any underlying ETFs or mutual funds. The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is charged to the account each calendar quarter, on a pro-rated quarterly basis and is billed in advance. The Program fees will not be adjusted for no or low trading activity. Maximum Annualized Fee Schedule Maximum Fee Schedule for Compass UMA Program Amount $0 - $250,000 $250,000 - $500,000 $500,000 - $1,000,000 $1,000,000 - $4,000,000 Over $4,000,000 Maximum Annual Fee 3.00% 2.50% 2.25% 2.00% 1.85% The Client agrees and acknowledges that other fees may be assessed to the Client that are not part of the Program fee. Other fees include, but are not limited to, fees for portfolio transactions executed away from the Sponsor, dealer mark- ups, electronic fund and wire transfer fees, market maker spreads, exchange fees and broker/custodian fees. The Client is further advised that mutual funds/ETFs charge their own fees for investing the pool of assets in the investment vehicle and such fees are apart from, and in addition to, the Program fee charged hereunder. Please see the prospectus or related disclosure document for information regarding those fees. Client acknowledges and understands that HTS and/or its affiliates may receive 12b-1 fees or other fees from the mutual funds in which Client invests. The Client can request to have two or more eligible Advisory accounts be treated as related accounts for purposes of taking their assets into consideration in order to calculate the Program fee. This means that all eligible assets in those accounts will be considered together when determining breakpoints, if applicable, in the fee schedule. Relating Advisory accounts can provide the opportunity for fee reductions at certain breakpoints. 21 | P a g e  Additions and Withdrawals from a Compass UMA Account If the Client makes any single deposit or any single withdrawal of $10,000 or more of cash and/or securities during a fee period, the Client will be debited or credited a pro-rated fee on the market value of the assets deposited or withdrawn. The pro-rated amount will be due and charged to the Clients account as of the date they deposit the additional assets, or the Client will receive a pro-rated adjustment or refund of any applicable prepaid fee as of the date of withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Endeavor Program HTS has entered into a strategic alliance with Envestnet PMC and BlackRock to create several risk-based investment models for use in the Endeavor Program. Endeavor Foundations and Flagship Portfolios The Endeavor Foundations and Flagship Portfolios provide Clients access to discretionary model portfolios created and managed by Envestnet PMC (PMC). These portfolios are sub-advised by Envestnet Portfolio Solutions, Inc. (EPS). The minimum investment to establish a Foundations account is $2,000, $10,000 for Flagship with a maximum of $25,000 or as accepted. EPS provides discretionary investment advisory services under which EPS selects mutual fund investments for the Client. These investments consist of a series of third-party ETFs and mutual funds as well as one or more actively managed funds from the Envestnet PMC Fund family or the ActivePassive ETFs. EPS periodically monitors Client portfolios and make changes in both the asset allocations as well as specific investment selections when deemed appropriate. Based on the Client’s financial needs, risk tolerances, and investment objectives, their IAR assists them in selecting the appropriate model portfolio. While the Client retains the ultimate decision-making authority over all of their accounts participating in the Endeavor Foundations and Flagship Portfolios, HTS generally expects to implement all asset allocation and/or fund changes applicable to one or multiple model portfolios as recommended by Envestnet PMC. In the selection of an Endeavor Foundations or Flagship Model Portfolio, the Client’s IAR will provide all investment advice to relating to the Endeavor Foundations or Flagship Model Portfolios. Envestnet PMC communicates periodic updates to HTS as changes occur to the model portfolios. Model portfolio recommendations provided by Envestnet PMC to HTS are not based on the circumstances of or otherwise tailored to any individual client. Envestnet PMC as will be responsible for placing all trades in a Program account on a discretionary basis. This includes all trades at inception of the Account, Model Allocations changes as directed by Envestnet PMC, any deposit of funds to the account or any Client request to raise cash for a distribution. The Envestnet mutual funds and ActivePassive ETFs constitute a proprietary series of funds of Envestnet. As the investment advisor to the funds, Envestnet receives a management fee based on assets invested in the funds that comprise the Foundations and Flagship Model Portfolios. The management fee is based on the applicable fee for each fund. It is important to note that Envestnet is not compensated under the sub advisory agreement or as part of the advisory fee assessed by HTS to the Client’s account. The target allocation for each of the model portfolios applies at the time a client establishes establish a Foundations of Flagship Model Portfolio account within the Program. Additions to and withdrawals from an account are generally invested based on the target allocation. However, fluctuations in the market value of securities and other factors can affect the actual asset allocation at any given time. Advisory fees charged for the management of are in addition to annual management fees, operating expenses and distribution fees assessed by Envestnet PMC funds. Clients should refer to the fund’s prospectus for additional information relating to the expenses of the funds. As sponsor of the Foundations and Flagship Model Portfolios, HTS does not offer or recommend the full spectrum of Envestnet PMC models that may be available through firms that sponsor programs similar to the Endeavor Foundations and Flagship Model Portfolios offered through HTS. Clients may obtain a list of current model strategies and the applicable target allocations may be requested from their IAR. Additionally, a client may request information regarding Envestnet PMC or unaffiliated fund’s portfolio manager(s), investment objectives, risks, charges, and expenses and other details is available in the specific fund’s prospectus, which may be obtained from their IAR. 22 | P a g e  HTS’s receipt of investment research, models and/or technology from Envestnet PMC creates a conflict of interest for HTS because the receipt of these benefits reduces HTS’s operating costs, which, in turn creates an incentive for HTS to recommend and/or use Envestnet PMC funds and the ActivePassive ETFs products in the investment management of Client accounts. Endeavor Hilltop Model Portfolios The Endeavor Hilltop Model Portfolios provide Clients access to discretionary model portfolios created and managed by BlackRock and Envestnet PMC within the Endeavor Program. The minimum investment to establish an account is $25,000 or as accepted. BlackRock and Envestnet PMC collaborate to develop the model portfolio asset allocation and select the underlying BlackRock, iShare, Envestnet PMC funds and other funds populating each model portfolio, and thereafter communicates periodic updates to HTS as changes occur to the model portfolios. Based on the Client’s financial needs, risk tolerances, and investment objectives, their IAR assists them in selecting the appropriate model portfolio. While the Client retains the ultimate decision-making authority over all of their accounts participating in the Hilltop Model Portfolios, HTS generally expects to implement all asset allocation and/or fund changes applicable to one or multiple model portfolios as recommended by BlackRock and Envestnet PMC. In the selecting of a Hilltop Model Portfolio, the Client’s IAR will provide all investment advice relating to the Hilltop Model Portfolios. BlackRock/Envestnet PMC communicates periodic updates to HTS as changes occur to the model portfolios. Model portfolio recommendations provided by BlackRock/Envestnet PMC to HTS are not based on the circumstances of or otherwise tailored to any individual client. Envestnet PMC as overlay manager will be responsible for placing all trades in a Program account on a discretionary basis. This includes all trades at inception of the Account, Model Allocations changes as directed by BlackRock and Envestnet PMC, any deposit of funds to the account or any Client request to raise cash for a distribution. The BlackRock ETFs and iShare ETFs are a proprietary series of ETFs of BlackRock. As the investment advisor to the funds, BlackRock receives a management fee based on assets invested in the funds that comprise the Hilltop Model Portfolios. This management fee is based on the applicable fee for each fund. It is important to note that BlackRock is not compensated under the sub advisory agreement or as part of the advisory fee assessed by HTS to the Client’s account. The ActivePassive ETFs are a proprietary series of ETFs of Envestnet. As the investment advisor to the ActivePassive ETFs, Envestnet receives a management fee based on assets invested in the ActivePassive ETFs that comprise the Hilltop Model Portfolios. The management fee is based on the applicable fee for each fund. It is important to note that Envestnet is not compensated under the sub advisory agreement or as part of the advisory fee assessed by HTS to the Client’s account. The target allocation for each of the model portfolios applies at the time a client establishes a Hilltop Model Portfolio account within the Program. Additions to and withdrawals from an account are generally invested based on the target allocation. However, fluctuations in the market value of securities and as well as other factors can affect the actual asset allocation at any given time. Advisory fees charged for the management of Client accounts are in addition to annual management fees, operating expenses and distribution fees assessed by BlackRock, iShare, and Envestnet PMC funds. Clients should refer to the fund’s prospectus for additional information relating to the expenses of the funds. As sponsor of the Hilltop Model Portfolios, HTS does not offer or recommend the full spectrum of BlackRock and/or Envestnet PMC models that may be available through firms that sponsor programs similar to the Hilltop Model Portfolios offered through HTS. Clients may obtain a list of current model strategies and the applicable target allocations may be requested from their IAR. Additionally, a client may request information regarding BlackRock, Envestnet PMC or unaffiliated fund’s portfolio manager(s), investment objectives, risks, charges and expenses and other details is available in the specific fund’s prospectus, which may be obtained from their IAR. HTS’s receipt of investment research, models and/or technology from BlackRock and Envestnet PMC creates a conflict of interest for HTS because the receipt of these benefits reduces HTS’s operating costs, which, in turn creates an incentive for HTS to recommend and/or use BlackRock ETFs, iShare ETFs, and Envestnet PMC ETFs products in the investment management of Client accounts. 23 | P a g e  In the Endeavor Program IARs will collaborate with their client to complete a Statement of Investment Selection (SIS) which includes a Risk Tolerance Questionnaire. The purpose of the SIS is to establish an understanding between the Client, HTS and Envestnet Asset Management, Inc. regarding the investment objectives, goals, and guidelines for the Client’s investment management account. IARs will work with their clients to provide recommendations regarding the appropriate asset allocation and underlying strategies to meet the Client’s objectives. The Clients are directing the investment model selections and changes made to a Program model and ultimately responsible for the selection of the appropriate asset allocation and underlying model portfolio. Endeavor Program Fees Fees for the Endeavor Program are offered on a wrap fee basis, covering all of HTS’s execution, consulting, and custodial services. The maximum Endeavor Program fee schedule, shown in the table below, is based on the total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire total account value in the determination of the fee. The fee does not cover the fees and expenses of any underlying exchange traded funds (“ETFs”) or mutual funds. The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis, and is billed in advance. The Clients’ Program fee will not be adjusted for no or low trading activity. Account Value Maximum Fee Up to $249,999 250,000 - 499,999.99 500,000 - 999,999.99 1,000,000+ 1.75% 1.50% 1.25% 1.00% The Client agrees and acknowledges that other fees may be assessed to the Client that are not part of the Program fee. Other fees include, but are not limited to, fees for portfolio transactions executed away from the Sponsor, dealer mark- ups, electronic fund and wire transfer fees, market maker spreads, exchange fees and broker/custodian fees. The Client is further advised that mutual funds/ETFs charge their own fees for investing the pool of assets in the investment vehicle and such fees are apart from, and in addition to, the Program fee charged hereunder. Please see the prospectus or related disclosure document for information regarding those fees. Client acknowledges and understands that HTS and/or its affiliates may receive 12b-1 fees or other fees from the mutual funds in which Client invests. If the Client should make any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date they deposit the additional assets, or the Client will receive a pro-rated adjustment or refund of any prepaid fee as of the date of the withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Methods of Analysis Foundations and Flagship Models: Envestnet provides Advisers with a variety of portfolio construction methods utilizing analytics module to blend a solution that meets Client requirements. Envestnet uses the capital markets assumptions “CMS” construction process of Black-Litterman and inverse optimization methods to estimate the expected returns for asset classes when constructing Envestnet’s proprietary strategies and in assisting the Adviser with asset allocation and portfolio construction. The underlying CMA process results in the construction of optimized diversified portfolios across a wide set of risk tolerances and preferences that can be employed by the Clients IAR. Hilltop Model Portfolios: BlackRock and Envestnet PMC use a quantitative and qualitative process that is implemented periodically during the year to decide how to rebalance the portfolio. A variety of indicators, including valuations, momentum, and rotation of style factors, are taken into consideration for the guidance of asset allocation decisions. Macroeconomic tendencies, global news and current market conditions are also considered. BlackRock and Envestnet PMC reserve the right to modify the target allocation of each model portfolio based on changes to its capital markets outlook. 24 | P a g e  Navigator UMA Program The Navigator UMA Program is a discretionary fee based advisory program, offering Adviser created model investment strategies that requires the use of the Envestnet SIS to create a model portfolio within the client’s risk tolerance and assign that model to accounts. This enables Clients and their IAR to develop a personalized investment strategy to manage the customized portfolio and deliver ongoing investment advice. With the Program, Clients and their IAR will construct a model portfolio that consists of a wide assortment of investments including, but not limited to, individual equities, ETF’s and mutual funds positions. The SIS model is intended to provide guidance for the management of the Program assets at inception without being overly restrictive, given changing business and market conditions. Clients should review the SIS on a periodic basis and should discuss any modifications promptly with their IAR. In the Program the IAR manages the accounts on a discretionary. For the accounts to be in the discretionary Program the IAR must first be approved to participate in the Program. The Program features include: • Customized model portfolio and allocations • Account minimum is $30,000 or as accepted • Trading done on the Envestnet Platform for eligible Platform securities (a) Client will have the option to either have the account rebalanced semiannually or annually. The Platform Manager will review all Program accounts daily and identify accounts that have not been rebalanced based on the rebalance selection at inception of the account. The review is based on the inception date of the account. If an account has been determined to have any position outside of the drift tolerance set by the IAR the account will be rebalanced. If an account has no positions outside of the drift tolerance no trades will be made and the rebalance clock will be reset. Trades will be done to maintain client’s target asset allocation among the investments in the model. Your affirmative consent is not required to implement these changes. Rebalancing will be accomplished by selling the shares of the over-weighted investment(s) and purchasing a corresponding dollar amount of the appropriate underweighted investment(s). The IAR and Client are free to direct an allocation change or rebalance as they choose, but the account will be automatically reviewed and rebalanced at least on a semiannual or annual or basis as selected by the client. When the account is rebalanced, the calendar is reset with a new semiannual or annual review now established. The IAR reserves the right to change the drift tolerance as the model portfolios/accounts are reviewed for activity. (b) Client is always free to accept or reject any recommendation from HTS and Client hereby acknowledges that it has the sole authority with regard to the implementation, acceptance or rejection of any recommendation or advice from HTS. (c) The Program provides the Client access to 7 risk-based asset allocation models. The Client’s IAR will provide recommendations regarding the appropriate asset allocation and underlying investments to meet the Client’s objectives, but the client is making the final selection of the investment allocation model and underlying investments and changes made to the Program portfolio and are ultimately responsible for the selection of the appropriate risk-based asset allocation model and underlying investments. At the discretion of the IAR, the model allocation may be reviewed and changed while staying within the risk tolerance. Envestnet provides overlay management services for the Navigator UMA accounts and implements trade orders based on the semi-annual or annual rebalance discipline as well as transactions directed by the client and their IAR at their discretion. Envestnet as the overlay trading manager will be placing the trades directed by the client and their IAR as well as rebalancing the account either semi-annually or annually. The client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the mutual funds and ETFs that have been selected. (d) A rebalance of the account will also take place when the client directs HTS to raise cash for a withdrawal or the client makes a deposit to the account that results in the cash balance being low or high. All deposits made to the account will be deemed eligible for immediate investment and the client will be responsible for any losses that may arise from a deposit in error. 25 | P a g e  (e) All investment requests received by Envestnet prior to 12:00 pm CST will be processed the same day on a best effort’s basis. Requests received by Envestnet after 12:00 pm CST will be processed by 12:00 pm CST the following trading day. Rebalancing or model allocation changes may result in tax consequences to the account holder including, but not limited to, the realization of capital gains, and/or losses regarding the sale of investments. Cash and Securities Concentrations Advisory Programs may not be appropriate for clients who want to maintain a high level of cash and/or highly concentrated positions that will not be sold regardless of market conditions. If the client continues to hold high level of cash and/or highly concentrated positions then the client does so against HTS’s recommendation and with the understanding that the value of those securities will be included for the purposes of calculating the Program fee, resulting in a higher fee paid to HTS. Please note that the client may hold excess cash or concentrated position in a brokerage account without incurring the Advisory Program Fee. If the account continues to be outside of the cash and concentration guidelines over a specified period of time, then the account will be subject to removal from the Program. Unsolicited Transactions The advice and counsel of the Client’s IAR is a critical service of the Navigator UMA Program Account. Solicited transactions will be made based on the recommendations that the IAR makes to the Client. Unsolicited transactions are made when the client directs the trades without advice or counsel from the IAR. The IAR assumes no responsibility for unsolicited trades, as these transactions are directed by the Client absent of advice from their IAR. An unsolicited trading pattern may indicate that the Account is no longer appropriate for the client as they are not leveraging the advice of their IAR. In these situations, HTS has the right to terminate the Account from the Program. After the client has executed an unsolicited transaction without the advice of the IAR, for so long as the client holds that position in the Account, HTS will take that asset into consideration: • As part of the overall account assets, • When giving periodic asset allocation advice, • When valuing the account holdings, • When providing analyses and reports on the account’s performance, and • HTS can also make recommendations to consider selling the asset, when deemed appropriate. We will include any security the client acquires in an unsolicited transaction as part of the account assets for calculating the advisory fee. Holdings that remain in the account will continue to be part of each fee cycle calculation until the holding is transferred out or liquidated. Inactive Accounts The Accounts are reviewed on a quarterly basis for trading inactivity for accounts that have been in the Program for over 12 months. If the accounts have had zero trades for the trailing 12 months, the IAR will be notified of the inactivity and if the account does not have trading activity by the end of the next quarter review, the account will be subject to conversion to a brokerage account due to the continued inactivity. The reinvestment of dividends and capital gains are not considered trades for this purpose. Navigator UMA – Methods of Analysis Each IAR has the independence to take the approach they believe is most appropriate when analyzing investment products and strategies for Clients in the Program. There are several sources of information that HTS and/or IARs use as part of the investment analysis process. These sources include, but are not limited to: • Financial publications 26 | P a g e  • Research materials prepared by third parties • Corporate rating services • SEC Filings (annual reports, prospectus, 10-K, etc.) • Company press releases • Regulatory and self-regulatory reports • Other public sources As a firm, HTS does not favor any specific method of analysis over another and therefore would not be considered to have one approach deemed to be a “significant strategy.” There are, however, a few common approaches that HTS or the IAR, often use individually or collectively, while providing advice to Clients. Please note that there is no investment strategy that will guarantee a profit or prevent loss. The following are some common strategies employed in the management of Client accounts: • Dollar Cost Averaging (DCA): The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high. Periodic investment Programs cannot guarantee a profit or protect against a loss in a declining market. Dollar cost averaging is a long-term strategy that involves continuous investing, regardless of fluctuating price levels, and, as a result, the Client should consider the financial ability to continue to invest during periods of fluctuating price levels. • Asset Allocation: An investment strategy that aims to balance risk and reward by allocating assets among a variety of asset classes. At a high level, there are three main asset classes—equities (stocks), fixed income (bonds), and cash/cash equivalents— each of which have different risk and reward profiles/behaviors. Asset classes are often further divided into domestic and foreign investments, and equities are often divided into small, intermediate, and large capitalization. The general theory behind asset allocation is that each asset class will perform differently from the others in different market conditions. By diversifying a portfolio of investments among a wide range of asset classes, IARs seek to reduce the overall volatility and risk of a portfolio by avoiding overexposure to any one asset class during various market cycles. Asset allocation does not guarantee a profit or protect against loss. • Technical Analysis (aka. “Charting”): A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value. Instead, they use charts and other tools to identify patterns that can suggest future activity. When looking at individual equities, a person using technical analysis believes that performance of the stock, rather than performance of the company itself, has more to do with the company’s future stock price. It is important to understand that past performance does not guarantee future results. • Fundamental Analysis: A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial, and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security’s value, including macroeconomic factors (e.g., the overall economy and industry conditions) and company-specific factors (e.g., financial condition and management). The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security’s current price, with the aim of figuring out what position to take with that security (underpriced = buy, overpriced = sell or short). This method of analysis is considered to be the opposite of technical analysis. • Quantitative Analysis: An analysis technique that seeks to understand behavior by using complex mathematical and statistical modeling, measurement, and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically. Some believe that it can also be used to predict real-world events, such as changes in a share price. • Qualitative Analysis: Securities analysis that uses subjective judgment based on no quantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations. This type of analysis technique is different from quantitative analysis, which focuses on 27 | P a g e  numerical values. The two techniques, however, are often used together. Navigator UMA Program Fees Fees for the Navigator Program are offered on a wrap fee basis, covering all of HTS’s execution, consulting and custodial services. The maximum Navigator UMA Program fee schedule, shown in the table below, is based on the total account value and is negotiable. The fee schedule is not applied incrementally; the corresponding rate is applied to the entire total account value in the determination of the fee. The fee does not cover any underlying costs associated with exchange traded funds (“ETFs”), closed-end funds, mutual funds, unit investment trusts or exchange traded notes (“ETNs”). The fee is calculated using the market value of the account on the last day of the preceding quarter. The fee is applied to the account each calendar quarter, on a pro-rated quarterly basis, and is billed in advance. The Clients’ Program fee will not be adjusted for no or low trading activity. Maximum Annualized Fee Total Account Value Up to $249,999 $250,000 – $499,999 $500,000 – $999,999 $1,000,000 and over 2.25% 2.00% 1.75% 1.50% If the Client should make any single deposit or any single withdrawal of $10,000 or more of cash and/or securities, they will be debited or credited a pro-rated fee on the market value of the assets. The pro-rated amount will be due and charged to their account as of the date they deposit the additional assets, or the client will receive a pro-rated adjustment or refund of any prepaid fee as of the date of withdrawal. Please note that accounts that fall below the minimum requirement due to withdrawals may be required to deposit sufficient funds or securities to bring the account value back up to the minimum requirement. Destination Fee-Based Annuity Program The Destination Fee-Based Annuity Program is a non-discretionary investment advisory Program. The Program enables the Client to receive ongoing investment advice and related services, including custody, and transaction reporting in connection with the Variable or Index Annuity for an asset-based fee (“Platform Fee”). Participation in the Destination Fee-Based Annuity Program may cost the Client more or less than purchasing these services separately. HTS offers the Destination Fee-based Annuity Program through Envestnet Asset Management, Inc. (“Platform Manager”), an unaffiliated registered Investment Adviser that operates a technology platform. Investment advisory services for the Destination Fee- Based Annuity Program will be provided to the Client by HTS and their IAR. To participate in the Destination Fee-Based Annuity Program, the Client will complete and sign an annuity contract from the selected insurance carrier, the Statement of Insurance Selection (“SIS”) and the HTS Client Suitability Agreement to establish the annuity contract. Generally, the Client will pay a Program fee based on the accumulated value of the Contract assets. The Contract is the only investment in the Destination Fee-Based Annuity Program. No other securities may be purchased or otherwise held within the Destination Fee- Based Annuity Program. Review the chart below and the HTS Destination Fee-Based Annuity Program Annuity Client Suitability Agreement for more information about the contract assets. The investment options available for assets held in the selected annuity contract are referred to as sub-accounts. The Client also has the option of investing a portion of those assets into a fixed sub-account. As a shareholder of portfolio(s) invested in a sub-account, the Client will pay the proportionate share of the portfolio’s underlying expenses, which may include advisory fees and other operating expenses. Destination Fee-Based Annuity Program Overview The Destination Fee-Based Annuity Program is designed to provide the Client with ongoing investment management and advice for the sub-account investment options of a fee-based variable or index annuity. In some cases, annuities have additional riders available for purchase. IARs will monitor market conditions and the performance of the annuity’s sub-accounts and/or market linked indexes and discuss with the Client and rebalance as needed. If the Client’s risk tolerance changes, updates should be made to the risk tolerance selection made for the annuity. In some cases, insurance carriers will, depending upon market conditions, modify the risk exposure of the annuity’s sub-accounts which can result 28 | P a g e  in a change to the risk profile of the annuity. The Client should carefully review the prospectus for the selected annuity to understand the conditions under which this may occur and discuss any questions they have with their IAR. What is a Variable Annuity A tax deferred variable annuity will allow the Client and their IAR to determine how assets are invested by choosing from a selection of investments available from the annuity carrier called sub-accounts. These sub- accounts can be made up of a wide variety of investments. As the value of these investments fluctuate based on the volatility of the markets, so will the contract value. Variable annuities have greater growth potential than some other investments but can also lose money. The range of investment options with different risk and growth potential can provide additional flexibility in structuring an investment plan for retirement savings. What is an Index Annuity An index annuity is a tax deferred, long-term savings option that provides principal protection in a down market and opportunity for growth. It gives the Client more growth potential than a traditional fixed annuity, but with less risk and less potential return than a variable annuity. Returns in an index annuity are based on the performance on an underlying index, such as the S&P 500. Participation rates of the underlying index will vary by contract. What is a Structured Annuity Structured annuities can also be referred to as registered index-linked annuities, variable-indexed annuities, indexed- variable annuities, or buffered annuities. This is essentially a blend of a variable and fixed indexed annuity. Depending on the Insurance Carrier, it may offer more market upside than a fixed indexed annuity. Structured annuities offer multiple different crediting strategies that let the Client choose the balance between growth potential and downside protection. The IAR will help the Client narrow these choices down and select a strategy that will help the Client reach the individual retirement and legacy goals. As each crediting period expires, the Client has the ability to reallocate to a new type of crediting strategy for a new term. This flexibility allows the Client to meet changing financial objectives over the life of the structured annuity. The IAR must be licensed to sell variable insurance products in the state of residence before presenting the Destination Fee-Based Annuity Program to a Client or prospective Client. Annuities are considered long-term, tax-deferred investments designed for retirement, involve investment risks, and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax penalty for withdrawals before age 59 ½ unless an exception to the tax penalty is met. The Annuity Accounts are monitored by the IAR at least annually to ensure that the Client’s portfolio remains aligned with the selected model and the Client Risk Profile, as stated in the SIS. All investment decisions are made and implemented by the Client and their IAR. The account statements will be provided to the Client quarterly by the insurance carrier. Services Destination Fee-Based Annuity Program is a non-discretionary investment advisory Program that gives the Client access to several variable and index annuity contracts offerings from different insurance carriers. The IAR will help the Client develop an asset allocation strategy, select from the sub-accounts or fixed account(s) available from the annuity carrier, and determine how much of the premium to allocate into each of the sub- account(s) and/or fixed account. The IAR may use a variety of methods and resources to develop a recommended asset allocation strategy. Due to changing market conditions, the asset allocation among the sub-accounts within the contract may change or deviate from its original allocation. Considering this, the IAR may recommend that the Client participate in the automatic asset rebalancing Program, which is an option available in most of the offerings. If the Client does not choose to participate in the automatic asset rebalancing Program, their IAR will recommend that the Client rebalance or reallocate the sub-accounts and the fixed account assets at least annually. It is solely the Client’s decision to implement any rebalancing or reallocation recommendations provided by the IAR. The Client may also contact their IAR to rebalance or reallocate the Sub-accounts and the Fixed Account assets as needed. 29 | P a g e  Where permitted by applicable law and business need, the insurance carrier reserves the right to make certain changes to the structure and operation of the contract. These changes include, among others, the right to: • Remove, combine, or add new sub-accounts at its sole discretion. • Substitute shares of one portfolio for another, which may have differences including different fees, expenses, objectives, and risks. • Restrict or prohibit additional allocations, and/or payments to sub-accounts. Review the annuity prospectus for more information about these changes. • Program Account Reviews and Reports The insurance carrier will provide custodial statements, and trade confirmations for products purchased through the Destination Fee- Based Annuity Program. The Client should review these documents upon receipt and promptly notify their IAR of any discrepancies. Additional information regarding these documents is available below. Account Statements The insurance carrier will send the Client statements at least quarterly. These statements contain information including, but not limited to, the accumulated value of the contract, the current market value of each sub-account invested in, the amount contained within the fixed sub-account and transaction activity for the previous quarter period. Trade Confirmations The insurance carrier will send the Client confirmation of each purchase or surrender transaction effected in the contract and/or any other transaction for which it is obligated to send the Client confirmation. Destination Fee-Based Annuity Methods of Analysis The clients IAR will use a variety of methods and resources to develop a suggested asset allocation strategy for the Program sub- accounts and fixed account assets in the clients Fee-Based Annuity contract. The clients IAR will research and recommend the sub-accounts from the eligible funds the carrier makes available for their account based on the stated risk tolerance and investment objectives. Each adviser has a different philosophy or criteria in the review and selection of investment products. Fees and Compensation Fees and charges differ when a variable annuity is purchased in a traditional brokerage account rather than an advisory Program like Destination Fee-Based Annuity Program. Generally, variable annuities that are available for purchase in an advisory account have lower surrender charges than similar variable annuities from the same issuing insurance carrier when the product is purchased in a traditional brokerage account. The difference in surrender charges is largely attributable to the portion of the surrender charge that the issuing insurance carrier would use to pay selling commission to registered representatives in a traditional brokerage relationship. The fee for any optional death benefit riders and/or living benefit riders is generally the same whether the variable annuity is purchased in an advisory account or a traditional brokerage account; selling compensation is not paid to HTS nor IARs if the Client selects an optional benefit rider. Clients that participate in the Program will be charged a quarterly Program fee for each Destination Fee-Based Annuity Program contract not to exceed the fee rate from the fee schedule below: Destination Fee-Based Annuity Program fee Schedule Portfolio Value Maximum Annual Fee Any Billable Account Value 1.50% The Program fee will vary among Clients and may be negotiable under certain circumstances. Factors typically considered to determine the Client Program fees include: • The managed account Program(s) the Client has selected. • The amount of assets in the Contract. • The personal financial needs, objectives, and complexity of the Client’s financial situation. 30 | P a g e  • The level of anticipated or actual trading within the Sub-accounts. • The experience level and credentials of the IAR. Calculation of Program Fees The Program fee is based on the accumulated value of the contract assets as of the last business day of the end of the quarter and in accordance with the Client agreement. The Program fee is not deducted from the annuity Program account, but instead it is deducted from a payment account opened at HTS. The payment account is a separate brokerage or ASG account and linked to the Destination Fee-Based Annuity Program account for the payment of the Program fee. In addition to the Program fee, the Client pays the insurance company the internal expenses for the selected annuity product as disclosed in the annuity’s prospectus. Internal expenses for annuity products are born by all customers that own the annuity and are in addition to the Destination Fee-Based Annuity Program fee the Client pays. They are paid directly from the assets in the annuity product as outlined in the products’ prospectus and cannot be paid from a payment account. Allocation of the Program Fee A portion of the Program fee is paid to HTS, the Clients IAR and the Platform Manager for their services. The amount of the fees paid to the IAR and/or HTS depends upon the Program Fee that the Client negotiates with their IAR and the amount of the fee payable to the IAR pursuant to the HTS compensation policies. Is the Destination Fee-Based Annuity Program right for the Client The IAR and/or HTS may recommend to the Client one or more Programs. The decision to select one or more managed account Programs is up to the Client. A discussion between the Client and their IAR, among other things, should include the following to determine if the recommended Program is appropriate: • The cost, potential benefits, and potential risks of the Destination Fee-Based Annuity Program. • The Client’s investment objectives and sophistication of the investment strategy. • The types of and number of investments the Client holds and intends to make, including the percentage of the overall portfolio that the Client intends to hold in the fixed sub-account. • The Client’s desire for diversification across sub-account(s). • The Client’s anticipated use of other services and features specific to the Destination Fee-Based Annuity Program. • The payment preference of an asset-based fee for ongoing investment advice and other related services compared to a commission-based variable annuity. At any time, a contract can vary greatly in the size, number and diversity of the sub-accounts held, due to, among other things, market conditions and the current investment needs and objectives. Generally, it is recommended that the Client diversify the holdings to help reduce the portfolio’s overall market risk. Investment diversification does not ensure a profit or protect against loss. If the Client intends to hold a concentrated portfolio, including a concentrated position in the Fixed Account, for an extended period of time, the Client should consider other contract options (i.e., investing in a commissioned based variable annuity) that may be more economically advantageous. The IAR receives training related to the product offerings in the Destination Fee-Based Annuity Program. Training includes, but not limited to, Client needs and suitability of product, expected trading, fee type preference, and desire for ongoing investment advice. Account Requirements and Types of Clients HTS, as a registered investment advisor, provides investment advisory services to individuals, trusts, estates, nonprofit organizations, corporations, and other business entities. The minimum initial investment amount for the Destination Fee-Based Annuity Program is $25,000. In some cases, IAR’s may set a higher minimum for their clients than listed in this brochure. Margin accounts are not eligible within 31 | P a g e  this Program. If the Client decides to establish an account in the Destination Fee-Based Annuity Program the Client will sign a Client Suitability Agreement, which will govern the Client’s participation in the Program, the insurance carrier’s annuity contract, and the Platform Managers Statement of Insurance Selection. Sub-account Selection and Evaluation The IARs may use a variety of methods and resources to develop a recommended asset allocation strategy for the sub- accounts and fixed sub-account assets within the annuity contract. Risks Investing involves risks and there is no guarantee that the sub-account options available will achieve their stated objectives. Certain sub-account options may present more risk than others due to the nature and/or complexity of the strategy. While fixed income portfolios have historically been considered a more conservative investment in comparison to equity portfolios, it is an investment with associated risks that should be considered before investing. A fixed income investor should not expect to experience higher levels of income or yield without assuming some or all the potential risks associated with the underlying fixed income investments. There are various risks associated with fixed income investing, some of the primary risks include credit risk, duration risk, and interest rate risk. Review the annuity prospectus for the sub-account options, which contains more complete information on the investment objectives, risks, charges, and expenses of the portfolio, which investors should read and consider before investing. The potential tax benefits of a tax free or tax deferred investment are eliminated if the investment is made in a qualified plan, such as a 401(k) or IRA. Voting Client Securities HTS, the IAR and the Platform Manager do not vote proxies, nor will they advise the Client regarding the voting of the proxies, corporate action or other materials regarding the shares held in the sub-account(s). Review the annuity prospectus for more information about voting privileges and delivery of proxy materials, reports and other materials relating to the sub-accounts. Review of Accounts HTS periodically reviews sub-account allocation for the Destination Fee-Based Annuity Program. Reviews may include, but not limited to: • Certain types of transaction activity or inactivity. • Sub-account options relative to the Client’s financial status, investment objectives, and risk tolerance. Depending on the results of the review, HTS may take certain actions, up to and including the termination of the Program services. As a participating Client in the Destination Fee-Based Annuity Program, the Client will periodically receive reports from the insurance carrier. These include quarterly statements, transaction confirmations. The Client should review these and report any suspected discrepancies immediately to their IAR. Selecting Annuity Riders and Features Riders are optional enhancements that are available on the Client’s annuity contract at an additional cost. They allow the IAR to tailor the contract and provide additional protection of the Client’s investment. Riders may not be available on all products in the Destination Fee-Based Annuity Program. Living Benefits Living benefit riders provide guaranteed lifetime income for the Client (and the Client’s spouse, when elected). • Can provide guaranteed increases, or roll-ups to the Client’s benefit base, for future income. • Offer consistent lifetime payouts that are based on the age when the Client take income, or on Their younger spouses age, if elected. 32 | P a g e  Death Benefits Death benefits allow the Client to pass assets to beneficiaries while potentially avoiding the time-consuming and costly probate process. Death benefits may be used to: • Continue payments or a lump sum to a designated beneficiary. • Pay for the owner’s final costs (such as funeral, burial or estate planning). Annuity contracts (not specific to death benefits) generally waive surrender charges due to terminal illness or injury. Most products offer a standard death benefit – often the return of premium. In some cases, there may be an additional fee for this death benefit Some annuities offer optional death benefits that let the Client lock in the highest contract value (annually or monthly) or a set rate of interest, even if the Client passes away when performance is down. There are also annuities that offer a spousal protection feature on death benefits. It is important to note that these riders, in some cases, do have additional costs. Please make sure to discuss the benefits of these riders as well as the costs with the IAR. Additional information about these riders and the costs are found in the annuity prospectus. HTS Program Investment strategies; Eligible and Ineligible Assets This Section describes HTS’s general policies regarding eligible and ineligible assets in the Advisory Programs. Specifically, the Programs permit the Client to hold, but not to purchase, certain assets deemed ineligible in the Programs including but not limited to the following: • B share class and C share class mutual funds and other classes deemed ineligible • Open-end mutual funds not approved for the Program • UITs not approved for the Program • ETFs and closed-end funds not approved for the Program • Structured products not approved for the Program • Alternative investments not approved for the Program While these assets are permitted to be held in Program accounts, they will need to be coded as unsupervised. These assets are excluded from the calculations of the Clients Program fees due to the additional compensation that HTS receive in connection with those investments. These unsupervised assets will not be included when determining the minimum account opening requirement, and they may not be included in the performance reports for the Program account. HTS reserves the right to determine the eligibility of assets in the Program and to discontinue the inclusion of any security for any reason in the Client Program account, at any time and without advance notice to the Client. Any such addition or deletion may also result in a change in Program fees associated to the Program account. Investment strategies HTSs employs a variety of investment strategies in connection with the wrap fee and other investment Advisory services, depending upon: • The type of Client involved • The Program chosen • The objective and risk tolerance selected by the Client Some of these strategies involve the use of asset allocation models, long-term and short-term investments. HTS has discretion in some cases to expand the offerings in the Programs to include multiple style accounts and investment strategies that include, but not limited to: • The purchase and sale of mutual funds • Common and Preferred Stocks • Fixed Income Securities 33 | P a g e  • ETFs/ETNs • Non-Daily Traded Alternative investment vehicles • Margin and short sales • Option strategies HTS has discretion to impose special suitability and investment requirements with respect to these portfolios. Aviator/Co-Pilot/Navigator UMA Eligible Assets and Ineligible Assets HTS requires that the Client hold and purchase only eligible assets in their Aviator, Co-Pilot and/or Navigator UMA accounts. Generally, with respect to the Program, the Client and their IAR have the ability to purchase and sell a broad array of different securities, including, but not limited to, any of the following eligible assets: • Common and preferred stocks • Government, corporate and municipal bonds (agency transactions only) – investment grade only in certain retirement plan accounts • Approved eligible option strategies • American Depositary Receipts • Closed-end funds • Open-end mutual funds which in some cases include several share classes including institutional, advisory, and other non 12b-1 fee paying share classes. In limited cases some mutual funds used pay 12b-1 fees. • Select no-load mutual funds • Eligible wrap CUSIP UITs • Eligible ETFs/ETNs • Public REITs • Approved publicly registered non-traded REITs – Co-Pilot program only • Approved eligible alternative investments – Co-Pilot Program only • Approved eligible structured products -Co-Pilot Program only Certain commodities/futures based securities product The following products/strategies may not be eligible (“Ineligible Assets”) for HTS’s Aviator, Co-Pilot, and Navigator UMA Advisory Programs: • Syndicate issues, initial public offerings, and Brokered CDs • Short positions - unless approved • Solicitation of low-priced securities • Non-publicly traded securities/Private Placements • Non-networked mutual funds • Share classes of mutual funds that pay 12b-1 fees or have CDSC charges unless approved • Auction rate securities – individual issues • Leveraged and inverse ETFs and ETNs. This also includes any derivative thereof, including, but not limited to, options, swaps, or futures contracts on these inverse/leveraged ETFs/ETNs. • Crypto exchange traded products • Day trading • Alternative investment funds that do not offer an advisory or institutional share class. • Listed or OTC index warrants • Commodities and futures (in certain programs) • Non-daily traded alternative investments – brokerage share classes 34 | P a g e  The list above describes the products which are usually (but not always) eligible or ineligible in the Advisory Programs. The list can change any time at HTS’s discretion. Eligibility of investments can vary by Program and strategy type. The Client should contact their IAR for the list of eligible investments in their specific Program. HTS’s Advisory Programs do not offer the ability to conduct principal trades. As such, in these accounts, the Client is not permitted to purchase or sell securities that trade only on a principal basis. Currently, the Client has access to principal execution in their Advisory account only for tax loss sales transactions in worthless securities in all Programs. Hilltop Holdings (HTH) Stock Subject to the exception described below, HTS’s Advisory Programs do not offer HTH stock or HTH securities. HTS does not allow Program Accounts to be funded by depositing HTH stock. HTS has discretion to allow SMA and UMA Managers in the Passport Series and Momentum Pathways Programs who are not affiliated with HTS to purchase HTH securities for those Accounts (this is limited to the common stock of HTH). Alternative Investments Alternative investments, including hedge funds, private markets (real estate funds, private credit, private equity, and interval funds) differ from traditional investment types and give investors access to additional sources of investment return. Alternative investments are generally less liquid than traditional investments, may require a longer investment period, are subject to increased volatility and risk of investment loss. Therefore, alternative investments may not be appropriate for all investors. Alternative investments are restricted to a percentage of the Client’s total investable assets, based on the Client’s risk tolerance. Investor qualification requirements also must be met in the case of private placement offerings. Alternative investment funds are limited to the advisory share class/cusip strategies made available through the HTS approved third party investment platform (IAR approval and Client qualification policies and procedures apply). For the selection of alternative investments for the Co-Pilot Program accounts (i.e., hedge funds and certain private market funds), HTS has partnered with a third-party and has established an initial and ongoing due diligence process. The process is designed to help ensure any alternative investments approved for investment allocations or strategies made available for the Programs have been properly researched and are suitable and consistent with the Client’s Investment Profile. This process may include, but is not limited to, an initial review of third-party reports, offering documents and marketing materials, an evaluation of the investment philosophy, process and performance, the general business practice and financials, regulatory compliance and disclosure documents, risk management and strategic planning. A fund that the Client purchased elsewhere could never have been subject to HTS research. Certain Alternative Investment Arrangements and Compensation It is imperative that Clients work with their IAR to evaluate how a specific alternative investment and its features fits their individual needs, risk tolerance and investment objectives. An important component of this selection process includes carefully reading the accompanying offering documents and/or prospectus prior to making an investment decision. The offering documents contain critical information and risk considerations that will assist Clients in making an informed investment choice. It is important to note that the fees and expenses related to alternative investments are often higher than those of more traditional investments. While each investment differs in terms of both total fees and expenses and how those fees and expenses are calculated, the following generally discusses the primary categories of fees and expenses that are common to many alternative investments and the different ways that HTS and the IAR may be compensated. Management Fees The manager for any particular investment often charges a management fee that is based on the total value of the investment in the account. As the value of the investment increases, the total management fees the manager receives may increase. Conversely, as the value of the investment decreases, the total management fees the manager receives may decrease. 35 | P a g e  Incentive-Based Compensation Many alternative managers receive incentive-based compensation in addition to management fees. Inventive- Based fees typically involve the manager retaining a percentage of profits generated for Clients. Fees related to incentive compensation are often referred to as incentive, performance-based fees or carried interest. The exact calculation of incentive fees or carried interest differs by product and manager. Upfront or Ongoing Servicing Fees or Placement Fees Many alternative investments have upfront costs directly related to compensating the IAR and/or HTS, generally based on the total amount of the investment, up to 5%. Ongoing servicing fees can be as high as 4% of the value of the investment. Redemption Fees Some investments have direct or indirect costs related to liquidating the position, particularly if an investment is liquidated shortly after being purchased or if an investment is specifically designed to provide limited or no liquidity to investors. Other Expenses Alternative investment strategies may be accessed through a variety of legal structures, including mutual funds, limited partnerships, and limited liability companies. In certain structures, particularly for new offerings, investors may incur organization and offering expenses that are related to the creation of the legal structure and marketing of the product. These costs ultimately serve to decrease the amount of the Client’s investment. Investors may also incur other expenses based on the investment activity of the fund. For example, in a Real Estate fund, investors may be charged fees related to the acquisition of property. In a hedge fund that shorts stock, there are costs associated with establishing and maintaining the short position. Lastly, investors in alternative investments generally bear the cost of certain ongoing expenses related to administration of the product. These expenses may include costs related to tax document preparation, auditing, or the custodial services. Please refer to the offering documents and/or prospectus for a full recitation of all fees and other expenses that will incur relating to a client’s alternative investment. HTS’s IAR will answer any questions regarding the total fees and expenses and the initial and ongoing compensation that the IAR, HTS and/or affiliates may receive. Impact of Ineligible Assets in Client Accounts Neither HTS, the Clients IAR, or the SMA/FSP manager will act as the Clients investment advisor with respect to Ineligible Assets. If the Client holds Ineligible Assets in the Advisory account and also has a separate HTS commission- based brokerage account, HTS may transfer those assets from the Program account to the HTS commission-based brokerage account in order to facilitate billing and performance reporting. However, the Client understands that HTS is not obligated to transfer those assets and the Client will remain responsible for monitoring and moving these assets from the Programs. The transfer of Ineligible Assets from the Advisory Program account to the brokerage account will not result in liquidation of the securities or taxable events, commissions, or any other compensation either to HTS or the Investment Adviser. HTS has discretion to terminate the Account. If the Client does not have a separate HTS commission-based brokerage account and decides to hold Ineligible Assets in the Advisory account, the Client does so against HTS’s recommendation and with the understanding that the value of those securities will impact a variety of services offered in the Programs and will be included as part of the account assets for calculating the advisory fee on the last business day of each calendar quarter. Holdings that remain in the account will continue to be part of each fee cycle calculation until the holding is transferred or liquidated, this includes calculations and reporting of performance for the account and calculating the Program Fee and other account billing events, which will result in a higher fee to HTS. These Ineligible Assets can also cause a trade error(s) due to over investment and in this situation, HTS has discretion to terminate the account. HTS at its discretion may make these ineligible assets unsupervised. 36 | P a g e  Unsupervised Assets Under certain circumstances positions in the account will be held as Unsupervised Assets. These Unsupervised Assets will not be a part of the billing calculation for the Program account nor part of the Account Performance Calculation and will not be subject to ongoing monitoring as long as they are coded as unsupervised. If an asset becomes an Unsupervised Asset during a quarterly billing period, that asset will be excluded for purposes of determining the asset-based Program Fee beginning at the start of the next quarterly billing period, and no portion of the asset-based Program Fee paid by a Client in advance for the quarter will be refunded or rebated back to the Client. Billing Practices for all Programs The billing process described below is subject to change upon prior written notice to the Client. Relating Accounts for Billing Purposes The Client can request to have two or more eligible Advisory accounts be treated as related accounts for purposes of taking their assets into consideration in order to calculate the Program Fee. This means that all eligible assets in those accounts will be considered together when determining breakpoints, if applicable, in the fee schedule. This request is subject to approval from HTS. Relating Advisory accounts can provide the opportunity for price reductions at certain breakpoints. If the Client chooses a breakpoint fee schedule for the account, the Client should review and consider the potential benefits of relating advisory accounts. The Program Fee for Advisory Accounts with a breakpoint fee schedule that are terminated prior to the quarterly billing process will be based on the contractual rate for that Account, not the relationship rate. The Client can contact their IAR for more information on the definition of eligible accounts and how to choose this billing option. Retirement Accounts cannot be linked where a prohibited transaction under ERISA or the Internal Revenue Code could result. Initial Program Fee HTS will deduct the Initial Program Fee from the Client’s account when the account is accepted for the Program. The fee will be calculated based on the value of the eligible assets on the date the account is accepted, pro-rated to cover the period from the date the account is accepted through the end of the calendar quarter. Quarterly Fee After the assessment of the Initial Program Fee, the subsequent Program Fees will be assessed quarterly based on the net asset value of the account on the last business day of each calendar quarter. Fees will be charged directly to the Client’s account in the month following the close of a calendar quarter unless the Client has designated another eligible HTS account to pay the Program Fee. The fee is an annual percentage of the account assets and the Client will pay the fee quarterly in advance, pro-rated according to the number of calendar days in the billing period. The quarterly fee for the Destinations Program will be billed in arrears. Advisory fees are calculated on the fair market value of the assets, as determined by HTS and Envestnet, on the last business day of the preceding calendar quarter. If the management of the account commences or is terminated at any time other than at the beginning or end of a calendar quarter, the fee is prorated based on the initial account value and the number of days the account was open in that quarter. For calculation purposes the fee is based on 365 actual days in a year (366 for leap year). The calculation is as follows: (Market Value x Rate x ((Days / 365)) with the Rate being the agreed upon fee within the Advisory Agreement. For more complete information on the fee charged, please contact HTS or the IAR of record. For the purposes of calculating the Program Fee, the value of the Account is calculated as the sum of the long and short market value of all Billable Securities held in the Account, plus accrued interest, minus any margin loan balances, as of the last day of the prior quarter. For mutual funds, HTS will use the fund’s net asset value, as computed by the mutual fund company. HTS and/or Envestnet prices securities based on information believed to be reliable. If any prices are unavailable or believed to be unreliable, HTS and/or Envestnet will determine prices in good faith to reflect understanding of fair market value. 37 | P a g e  If the Agreement is terminated prior to the end of the quarter, the Client will receive a pro-rata refund of the prepaid, unearned fees from the date the Account is removed from the Program through the end of the quarter. For accounts billed in arrears the account will be billed and debited on a pro rata basis up to the termination date. Please see the “Account Termination” section of this Disclosure Brochure for additional information. When fees are calculated, certain assets are excluded from the market value of the Account. These are called unsupervised assets and will not be included in the “billable” Market Value. Unsupervised assets are generally securities that are not considered approved for the Program or that the IAR and Client have agreed should be held only and not included in Account rebalancing, performance tracking and management of Account. Cash and cash equivalents are included in the Program Fee calculations. Fee Rate Changes Changes to a fee rate on an Advisory account, whether an increase or a decrease in the Annual rate, must be received by ASG no later than the 20th of the month prior to the quarter end. If the request is received after the cutoff date, the new rate will not go into effect until the next quarter billing cycle. The changes will also apply to any contributions or withdrawals over $10,000 made after the rate change request. Alternative Investments Valuation and Redemptions The valuation of alternative investments held at HTS reflect the records of the issuers and administrators of those funds. HTS does not guarantee the accuracy of the information. The value shown is not necessarily the value the Client would receive from the issuer if they sold the assets. The Net Asset Value (“NAV”) is primarily based on estimated portfolio values provided by the underlying fund sponsor. Reported estimates sometimes do not reflect resale, liquidation or repurchase value, if any, and sometimes do not reflect distributions of capital until the next valuation is reported, generally on an annual or semi-annual basis. These valuation practices are important because HTS calculates the Program Fee for alternative investments the Client holds in Advisory Accounts based on these estimates. For purposes of calculating the Program Fee, HTS will use the valuation of alternative investments available/reported to HTS as of the billing date. Valuation for alternative investments is often delayed, so only those investments that have at a minimum quarterly valuation will be eligible for the Program. In addition, for Program Accounts holding eligible alternative investment (nondaily traded alternative funds), initial cash proceeds from redemptions sometimes are not received into the account for a period that can extend over several months. Proceeds from "hold back" promissory notes are usually received within 18 months of issuance. Redemptions and "Hold Back" Promissory Notes: For accounts holding eligible alternative investments, proceeds from redemptions are not to be received into the Advisory Account for a period that can extend over several months after a redemption request is submitted and is effective. As a result, the Program Fees charged originally are based on the value of the alternative investment fund inclusive of the value of the alternative fund pending redemption. The Client will receive a credit of the Program Fee imposed on alternative investments the Client redeems in whole or in part while they hold these investments in Advisory Programs if the amount meets the minimum requirements and the funds are withdrawn from the account. Credits will be based on the effective date of the withdrawal of the redemption amount. Advisory Program Fees, Compensation, and Other Costs For all Programs, the fees do not cover the fees and expenses of any underlying ETFs, closed-end funds, UITs, ETNs or mutual funds, fees for ancillary services such as wire transfers, returned checks, etc., nor does it cover all applicable exchange fees, stepped out transactions or option reporting fees. There are additional costs associated with the Destinations Program selection of optional riders, and the Tax and Impact Overlay Services offered on Passport Series SMA, Gateway FSP, and Momentum Pathways UMA Programs. The Client should be aware that Program fees charged could be higher than those otherwise available if the Client were to select a separate brokerage service and negotiate commissions in the absence of the extra advisory services provided. HTS’s fee schedules are subject to negotiation, depending upon a range of factors including, but not limited to, account sizes and overall range of services provided. 38 | P a g e  HTS acts as the Sponsor and/or provides certain services offered by its affiliate Momentum Independent Network Inc. (MIN). The fees that MIN charges are sometimes different from what is stated in this Disclosure Brochure. Please refer to the disclosure document of MIN, as appropriate, to determine the fees they charge. The Client should consider the value of these advisory services when making such comparisons. The combination of custodial, advisory, and brokerage services sometimes are not available separately or could require multiple accounts, documentation, and fees. The Client should also consider the amount of anticipated trading activity when selecting among the Programs and assessing the overall costs. Advisory Programs typically assume a normal amount of trading activity and, therefore, under particular circumstances, prolonged periods of inactivity or asset allocations with significant fixed income or cash weightings can result in higher fees than if commissions were paid separately for each transaction. If the Client liquidates securities prior to initiating or after terminating a Program service, the Client will be subject to customary brokerage charges with respect to that transaction, in addition to any Program fees that are applicable during the period. The Client’s IAR has a financial incentive to recommend a fee-based advisory Program rather than paying for investment advisory services, brokerage, performance reporting and other services separately. A portion of the annual advisory fee is paid to the Client’s IAR, which generally is more than the IAR would receive under an alternative Program or if the Client paid for these services separately. Therefore, the IAR has a financial incentive to recommend a particular account Program over another. Such incentive compensation is generally available as follows: IARs utilizing any of the previously mentioned Programs offered by HTS generally receive compensation in the form of asset-based fees, and this compensation is typically credited to the IAR on a quarterly basis. Such compensation generally is more than the representative would receive if the Client participated in other Programs or paid separately for investment advice, brokerage, and other services and, therefore, IARs have a financial incentive to recommend the advisory Programs over other services. IARs are typically compensated based on their annual gross production, whereby higher gross production will generally result in higher payouts. These compensation Programs constitute a targeted payout increase to certain qualified IARs based on economies of scale achieved by HTS, its affiliates and IARs at increasing asset levels. However, such compensation arrangements represent a conflict of interest where an IAR is incentivized to recommend an asset-based fee account Program rather than recommending an alternative product or service, if comparable or if available separately to Clients. The Client should be aware of such arrangements and should consult the IAR for additional details regarding the IAR’s compensation levels in fee-based accounts. As part of its fiduciary duties to Clients, HTS endeavors at all times to put the interests of its advisory Clients first. The Client should be aware, however, that the receipt of economic benefits by HTS (or its related persons) in and of itself creates a potential conflict of interest. While certain account minimums are set for each advisory account Program, the IAR can elect to recommend a Program based on his or her understanding of and familiarity with the various services offered within a particular Program. Because each Program is unique and offers a different bundle of services, the standard advisory fee a client pays is allocated within HTS differently from one Program to another. The compensation received by the IAR is higher in some particular Programs relative to others, and this compensation fluctuates based on certain minimum clearing or retention rates assigned by HTS. These clearing and retention rates are a component of, and not in addition to, the overall advisory fee paid, and generally are higher as a percentage of the overall advisory fee paid by the Client for smaller accounts. As a result, an IAR has a disincentive to recommend certain of the aforementioned Programs to Clients with smaller accounts that otherwise would meet the standard account minimum for each respective Program. Therefore, this causes a conflict to exist with respect to the level of investment diversification a client may achieve. HTS receives financial remuneration from some market centers for certain orders routed and executed at that market center. HTS has entered into a clearing arrangement with an unaffiliated registered broker-dealer pursuant to which the broker- dealer clears transactions in certain mutual funds. This broker-dealer has established relationships with the mutual fund companies. The registered broker-dealer receives sub-transfer agent fees and shareholder servicing fees from the mutual fund companies or their affiliates for the shareholder, administrative and other recordkeeping services it 39 | P a g e  provides, and passes all or a portion of these fees through to HTS. The sub-transfer agent fees and shareholder servicing fees vary by mutual fund company and are based on assets held in HTS Client Accounts. Unaffiliated broker-dealer passes through all the fees that they receive from the Funds and charge HTS a clearing fee based on the value of the assets. The fees are not paid from the Client’s account but are paid from the mutual fund. As a result, the fees reduce the fund’s net asset value and thus the value of an investment in the fund. Therefore, these fees are a form of indirect compensation paid by all investors in the mutual fund. Generally, whether HTS receives these fees is not dependent on the share class in which the Client invests. HTS has an incentive to only offer mutual funds and other investments that make third party payments or enter into revenue sharing agreements with us.” HTS also has an incentive to recommend these investments to the Client because the more Client assets that invest in them the more payments and revenue HTS receives. These revenue-sharing payments create a conflict of interest because some mutual fund companies pay more than others, and HTS therefore has a financial incentive to choose mutual funds issued by Companies that pay it more than others, and this financial incentive could interfere with HTS’s fiduciary obligation to choose the best available investments for the Client. These revenue-sharing payments also create a conflict of interest because they create an incentive for HTS to invest the Client’s assets in mutual funds that pay these fees, rather than other types of investments (such as equities, bonds or ETFs) that do not pay these fees, or mutual funds from companies that do not pay these fees. HTS can only sell mutual funds issued by mutual fund companies with which HTS signs a selling agreement, and these revenue-sharing payments create a conflict of interest because HTS has a financial incentive not to sign selling agreements with mutual fund companies that do not make these payments, which in some cases as a result offer mutual funds with lower operating expense ratios. HTS intends, however, to make all recommendations independent of such fee consideration and based solely on HTS’S obligation to consider the Client’s objectives and needs. The IAR of HTS does not share in these fees that may be received by HTS. Payments from Structured Product Sponsors. Purchases of Structured Products in the Co-Pilot Program are not charged any sales commissions; however, Clients who purchase Structured Products will pay certain offering costs associated with issuing, selling, structuring, and hedging the products. Such costs are paid to the issuer, and are included in the initial offering price, and disclosed in the offering documents. Therefore, the estimated value of the investment on the pricing date will be less than the original issue price. HTS receives a structuring fee from the issuer for the sale of the Structured Product. The structuring fee that HTS receives varies by product and sponsor, with a range of 0.25% or $2.50 per $1,000 dollars purchased to a maximum of 1.25% or $12.50 per $1,000 dollars purchased, thus the offering document should be consulted for additional details regarding the structuring fee for any single investment. Compensation to IARs Who Recommend Advisory Programs In general, HTS pays IARs cash compensation consisting of two components: a guaranteed monthly minimum draw required by applicable law, and production payout if it exceeds the monthly minimum draw. The production payout is a percentage of the product- related revenue that each IAR generates during that billing cycle with respect to the Clients he or she serves, minus adjustments due to distributions from or the closing of the advisory account. The payout rate is generally based on production levels and ranges from 25% to 57.5%. HTS reserves the right, at HTS’S discretion and without prior notice, to change the methods by which HTS compensates the IAR and employees, including reducing and/or denying production payout and/or awards for any reason. Investment Advisory Programs: For HTS’s Investment Advisory Programs (asset-based fee Programs) the payout rate is applied to the Program fees credited to the IAR by HTS. Under certain circumstances some IARs or producing Branch Managers are compensated differently. Recruitment Compensation: In general, if the IAR is joining HTS from another firm, the Client should discuss the reasons their IAR decided to change firms and any costs or changes in services the Client incur by transferring their accounts to HTS. In many cases, HTS pays IARs financial incentives when they join and on an ongoing basis as described below. Many IARs who joined HTS are eligible to receive incentives, including loans, bonuses and/or other compensation, if they reach certain asset and/or production levels or other targets. The amount paid to IARs under these arrangements is largely based on the size of the business serviced by the IAR at their prior firm and the IAR achieving a minimum percentage of their prior firm production and asset levels within a specific time period after joining HTS. These payments can be substantial and take various forms, including salary guarantees, loans, transition bonus 40 | P a g e  payments, temporary or transitional grid increases in the portion of account fees paid to the Clients IAR and various forms of compensation to encourage IARs to join HTS, and are contingent on the IAR's continued employment. Therefore, even if the fees the Client pays at HTS remain the same or are less, the transfer of the assets to HTS contribute to the IAR's ability to meet such targets and to receive additional loans and/or compensation even if not directly related to the Clients account or the fees the Client pays to The Firm. These practices create an incentive and a conflict of interest for the IAR to recommend the transfer of the Clients account assets to HTS since a significant part of the IAR's compensation is often contingent on the IAR achieving a pre- determined level of revenue and/or assets at HTS. The Client should carefully consider whether their IAR's advice is aligned with their investment strategy and goals. Awards: IARs are generally eligible to qualify for strategic objective awards and recognition Programs, which are based on production and other criteria as determined by HTS. Funding the Account The Client may fund an advisory account by depositing cash and/or eligible securities designated as “eligible” for Program accounts. The Destinations Program Account must be funded by cash/check for all new purchases. Class A shares used to fund accounts subsequent to the Share Class Conversions will be converted, on a tax- free exchange basis (subject to availability of that service by the mutual fund sponsor), to the new share class available for the relevant fund. If the Client funds the account with securities, they authorize and direct HTS, as applicable given the terms of their Program, to liquidate those securities on the Clients behalf and to allocate the proceeds in accordance with their selected investment style. HTS will not advise the Client regarding the liquidation of these securities. HTS will execute those transactions free of commission charges; however, depending on the type of security involved, those liquidations can result in the Client incurring redemption charges and taxable gains or losses. The Client should review the potential tax consequences of these liquidations with their tax advisor before funding the account with securities. When liquidating these securities for purposes of establishing the account, HTS will be acting as the Client’s broker, not the Investment Adviser. Liquidations will be affected promptly after acceptance of the account at the then prevailing market prices. HTS will not be responsible for the liquidations and any consequences due to the Clients failure to notify HTS of other existing security holdings, the overall effect of liquidations once effected, or the loss of potential gains due to movements in the market prices or changes in market conditions. Securities that are ineligible for an HTS Program should be transferred to a brokerage account. If immediately prior to funding an Advisory account, the Client chooses to liquidate eligible and/or ineligible securities to fund an account with the cash proceeds, those liquidations will not be subject to commission charges or if charged, commissions will be reversed. For Programs that offer mutual funds, HTS will provide the Client with mutual fund prospectuses and other fund information as the Client may reasonably request to assist in completing appropriate forms for purchases, redemptions, account designations, address changes and other transactions involving these investments. Class A shares are available for mutual funds that do not offer Institutional or Advisory share classes or that declined to make those shares available in the Programs. Class A shares normally impose a shareholder servicing fee, commonly referred to as a 12b-1 fee, which the Client pays directly to the fund company. These fees will be rebated to the account in most Programs. The Class A shares available in the Programs do not impose a load or sales charge at the time of purchase; however, because most Institutional or Advisory share classes do not impose a 12b-1 fee shareholder servicing fee, these share classes are usually more cost effective than the Class A shares. As part of its fiduciary duties to Clients, HTS endeavors at all times to put the interests of its advisory Clients first. The Client should be aware, however, that the receipt of economic benefits by HTS (or its related persons) in and of itself creates a potential conflict of interest. 41 | P a g e  Funding the account with Securities/Commissions Lookback Securities trades executed 30 days prior to the date the Client signed the account agreement, should not include commissions or sales credits. Any securities trades in the previous 30 days that have had commission charges must be canceled and rebilled to reflect that no charges were made to the customer. Mutual funds, unit investment trusts, and other products with a sales load that have not been held for the previous 12 months are not eligible for Program accounts. The positions should not be liquidated prior to approval in expectation of acceptance into the Program. These positions will be reviewed for eligibility on a case-by-case basis by HTS Wealth Management Supervision and ASG. If not approved, these positions will need to be kept in a separate brokerage account until the full 12 months has passed or be marked as Unsupervised Assets and will stay in the account but not part of the billing calculation until the lookback period has expired. This will not apply to positions that transfer into the account from other firms. For the Destinations Program all eligible securities must be liquidated to fund the account. Tailoring of Advisory Programs and Reasonable Restrictions For all advisory Programs sponsored by HTS, the Client will select the IAR with whom they wish to work with. The IAR will assess the Client’s prior investment experience, financial goals, time horizon, risk tolerance and investment objectives to determine the appropriate Program. The Client may request that reasonable restrictions be imposed on the management of their account. Reasonable restrictions generally include the designation of particular securities or types of securities that should not be purchased for the account. If the restrictions are unreasonable or if HTS, or the IAR, believes that the restrictions are inappropriate, HTS has discretion to remove the Clients account from the Program. In some cases, HTS has discretion to liquidate preexisting positions in the portfolio immediately and bring the Account into conformity with the Client’s target allocations so if the Client wishes to hold certain positions for tax and investment purposes, they should consider holding these positions in a separate account or request to be held as an unsupervised asset. Under certain circumstances, the Client’s IAR can temporarily place certain restrictions on securities for the purpose of model rebalancing. This is for portfolio trading purposes only. Cash Sweep For all Programs, cash or money market investments will be included in the determination of the Account Value. Effective March 6, 2023, HTS implemented certain changes to the cash sweep program. Specifically, HTS no longer offers money market mutual funds (“MMMF”) as a sweep option for excess cash held in customer accounts. Instead, excess cash balances will be invested, upon affirmative written consent from the Client, only in our Bank Insured Deposit (“BID”) Program, BID is a service provided by HTS to its customers which offers the Client the option of transferring excess cash balances in their securities accounts to our BID program, which is an account (“Sweep Account”) at a bank or credit union (“Participating Bank”) whose deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) or the National Credit Union Administration (“NCUA”), as applicable, up to applicable FDIC and NCUA limits. A sweep of excess cash allows the Client to earn interest on those funds from Participating Banks while retaining the flexibility to quickly access that cash to purchase securities or withdraw it. To participate in the HTS BID program, the client must select a sweep upon account opening by affirmative written consent. If participation is declined in the BID program, or if the account is otherwise ineligible to participate, the excess cash balances must be retained in an interest-bearing Securities Investor Protection Corporation (“SIPC”) insured credit interest program (“CIP”) account held at HTS. Unlike cash accounts, retirement accounts are required to participate in a sweep account program by affirmative written consent prior to account opening. Retirement accounts may not select CIP. For existing accounts, the Client should notify their Investment Adviser Representative (“IAR”) if they wish to sweep cash balances to the BID program. HTS may temporarily suspend or discontinue the sweep program at any time and without advance notice to Clients. HTS may change the BID program terms and conditions (“BID Program Terms and Conditions”), or change the timing or frequency of the sweep, by giving the client thirty (30) days prior written notice to the extent possible. If HTS fails to sweep excess cash balances in the manner described in the Customer Information Brochure, HTS’s liability is limited to the actual amount of interest the client would have earned had the sweep been performed. HTS may automatically 42 | P a g e  sweep funds from the Client’s Sweep Account to an Advisory Program account anytime without advance notice to clients to pay for securities transactions and withdrawal requests, satisfy a debit balance, settle any other obligation owed to HTS, pay a margin loan, provide necessary collateral in a margin account, or for any other permissible purposes. Should the client wish to access these funds or information regarding the BID program rates, the client should contact their IAR. With ongoing changes to the interest rates paid by Participating Banks under the BID program, the client’s personal financial circumstances, and market conditions, Clients should always consider all of their investment options. Available SIPC Coverage HTS is a member of SIPC, which protects securities customers of its members against the loss of cash and securities up to $500,000 (including a $250,000 limit for claims for cash). An explanatory brochure is available at www.sipc.org or by calling 202.371.8300. In addition, HTS has purchased Excess SIPC Insurance which covers the net equity of customers’ accounts up to an aggregate of $200 million from underwriting syndicates at Lloyd’s of London. The customer securities component, which restricts coverage with respect of any one customer, will be a maximum of $25,000,000 in coverage for securities, with the aggregate coverage of cash set at $900,000. SIPC and Excess SIPC covers accounts of the member firm in the event of a member’s bankruptcy or insolvency. Coverage does not apply to losses due to market fluctuation or to any decline in the market value of securities in an account. It is important that Clients understand the unique nature, insurance coverage and risk associated with each type of account and account category. SIPC coverage does not protect cash balances created and maintained solely for the purpose of earning interest, so funds in CIP accounts must be intended for future reinvestment. Bank Insured Deposit Program The BID program is a program that sweeps excess cash to Sweep Accounts at FDIC-insured Participating Banks in increments of $250,000 (the current standard maximum deposit insurance amount (“SMDIA”) per insurable capacity under FDIC rules). Subject to satisfaction of certain conditions, funds swept to each Participating Bank will be eligible for pass-through deposit insurance coverage under FDIC rules. Because there are multiple Participating Banks in the BID program, the maximum amount of funds that, subject satisfaction of certain conditions, will be eligible for pass- through deposit insurance coverage will be equal to the SMDIA (currently $250,000 per insurable capacity) multiplied by the number of Participating Banks at which funds are deposited (the “Maximum applicable FDIC Amount for an individual accountholder, or an individual owner of a joint account, would be $5 million ($250,000 multiplied by 20). And the combined Maximum Applicable FDIC Amount for accountholders of a joint account with two individual owners would be $10 million ($500,000 multiplied by 20). The actual Maximum Applicable FDIC Amount will depend on the number of Participating Banks in the BID program at any given time, excluding any Participating Banks in which a client elects not to have funds swept. The FDIC insures bank deposit accounts such as checking, interest-bearing checking and savings accounts, money market deposit accounts, and certificates of deposit (CDs) if an insured bank or savings association fails. Bank deposits are generally insured up to $250,000 (the current SMDIA) per insurable capacity for all funds held by a bank for a client, including both funds deposited through the BID program and funds that a client may have on deposit at a bank outside of the BID program, while the IRA and other qualifying self- directed retirement funds on deposit are separately insured up to $250,000. The FDIC does not insure the money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if the client purchased those products from an insured bank. Accounts and funds held at a Participating Bank by a client in the same capacity outside of the BID program and any funds swept to the Participating Bank through the BID program are combined for purposes of determining FDIC insurance coverage. This, if a client has funds on deposit at a Participating Bank outside of the BID program, and $250,000 of the total deposits would be eligible for pass-through FDIC deposit insurance and amounts in excess of $250,000 held at the Participating bank would not be insured. If a client has deposits at a Participating Bank that were made outside of the BID program, the client should notify their IAR and elect not to have funds placed at such Participating Bank through the BID program. The client is solely responsible for monitoring the client’s total deposits at a Participating Bank, including deposits through the BID program and deposits outside of the BID program. Additional information regarding FDIC coverage is available at www.fdic.gov. The Client should consult their IAR, as certain types of accounts may not be eligible to invest in the BID program. 43 | P a g e  As discussed in the BID Program Terms and Conditions, the BID program pays different rates of interest based on six different deposit tiers. The amount of interest paid will be determined by the amount of interest paid by the banks participating in the program, minus the amount of fees charged by us, as broker-dealer or custodian. The tiers are currently as follows: Tier Tier 1 Deposit Level $0 to $49,999.99 Tier 2 Tier 3 $50,000 to $249,999.99 $250,000 to $499,999.99 Tier 4 $500,000 to $999,999.99 Tier 5 Tier 6 $1,000,000 to $2,999,999.99 $3,000,000 or more Clients may obtain copy of the BID Program Terms and Conditions by requesting from their IAR. For information about current rates paid by Participating Banks in the BID Program, please discuss with an HTS IAR. Additional information about the BID program is available at our website at https://hilltopsecurities.com/disclosures/sweep- account-disclosure/ , or from an HTS IAR. The applicable interest rate tier will be determined based on the amount of cash available in the Client’s Advisory Program account on a per account basis. Cash available in one Advisory Program account will not be aggregated to include cash which may be contained in other Advisory Program accounts the Client holds with the Firm for purposes of qualifying for a higher interest rate tier. In other words, the amount of cash available in each specific Advisory Program account can only be used to qualify for one individual interest rate tier under the BID program. Interest on funds in a Sweep Account at a Participating Bank is accrued daily, compounded monthly and credited to accounts monthly. Interest begins to accrue on the date of deposit in the bank up to, but not including the date of withdrawal. The daily balance method is used to calculate the interest on these accounts. The daily rate is 1/365 of the applicable interest rate. Sweep Account rates are set in accordance with other bank products and may be changed at any time. The rate of return paid on funds invested in a Sweep Account at a Participating Bank may vary from the rates of return available to depositors making deposits with the Participating Bank directly, through other types of accounts at HTS, or with other depository institutions in comparable accounts. The Client should compare the terms, rates of return, required minimum amounts, charges and other features with other accounts and alternative investments. HTS anticipates receiving fees, including fees for administrative services (“Program Fees”) and other financial benefits, for providing sweep funds to the Participating Banks in the BID program. HTS anticipates that its affiliate, PlainsCapital Bank, will receive a financial benefit from the use of sweep funds, such as net interest income. The Participating Banks pay a total all-in cost of funds (“TAICF”) based on deposits held at the Participating Bank through the BID program. The TAICF consists of the interest payable to clients on their deposits in a Sweep Account, and the fee paid to HTS. HTS has a material conflict of interest with respect to the BID program because the Participating Banks in the BID program (including PlainsCapital) have discretion in determining the TAICF to pay on Sweep Account deposits, and HTS has discretion in determining how much of that bank interest rate is paid to customers in the program, and how much of the bank interest rate to retain itself as a Program Fee. The Participating Banks (including PlainsCapital) have a financial interest in paying a lower TAICF so that their net interest income is increased, and HTS has a financial incentive to retain a higher portion of the TAICF as a Program fee (resulting in a lower rate paid to customers). By contrast, MMMF (are not bank deposits and re not protected by FDIC insurance), have a fiduciary duty, consistent with their investment objectives and prudent risk management practices, to maximize the interest rates they pay to investors. HTS does not share any portion of the Program Fee paid to HTS with HTS IARs. HTS contracts with a third-party to provide administrative services for the BID program. Certain selected affiliated and unaffiliated Participating Banks will receive priority in receiving BID program balances for overnight deposits and/or short-term deposits. HTS at times will maintain a reserve account with an affiliated and/or unaffiliated Participating Bank. Complete BID program disclosures and a list of the Participating Banks available in the BID program are available at https://hilltopsecurities.com/disclosures/sweep-account-disclosure/. 44 | P a g e  Also, complete BID program disclosures are contained in HTS’s Customer Information Brochure. Similarly, HTS has discretion concerning the amount of interest to pay, if any, on cash swept to free credit balances held at HTS, and HTS has a conflict of interest in determining this interest rate because a lower or no interest rate paid to customers on free credit balances results in greater revenue for HTS. HTS does not share any revenue received in connection with free credit balances with its IARs. HTS also offers money market mutual funds (of various share classes) to customers on a position-traded basis, which is to say, by having the customer’s IAR place individual buy or sell orders for those funds, not on an automated sweep basis. Some of these position-traded money market mutual funds offer higher yields to customers than the BID program or free credit balance and pay lower or no fees to HTS. HTS has a conflict of interest with respect to the decision whether to allow customer cash balances to be swept automatically to its sweep funds, or to be position-traded into other money market mutual funds that are higher-yielding to customers but pay lower or no fees to HTS. HTS also has a conflict of interest with respect to all sweep options because the revenue it earns from those seep options may give it an incentive to increase the amount of a client’s assets allocated to cash as compared to other investments. For more information relating to these money market mutual funds, the Client should discuss with their IAR and refer to the fund’s prospectus for more detailed information. When the funds in a client account exceed the Maximum Applicable FDIC Amount, then any such excess funds will be invested in the Dreyfus Government Cash Money Market Fund Investor Class (DGVXX). The investor share class does not charge 12b-1 fees but do include shareholder servicing fees and other fees and may be more expensive than other share classes of the same fund that are available to our Advisory Customers. The use of higher cost share class of money market mutual funds than may otherwise be available to the Customer, and the use of money market mutual funds that pay shareholder servicing and other fees instead of other money market funds that do not pay these fees, are conflicts of interest on the part of HTS. DGVXX, which is only available for account balances in excess of the Maximum Applicable FDIC Amount, is registered with the SEC pursuant to the Investment Company Act of 1940 and treated as a security. Please note that DGVXX is not FDIC-insured, not guaranteed by the federal government, and is not a deposit or obligation of any bank or guaranteed by any bank. There can be no assurance that this or any money market fund will be able to maintain a stable net asset value of $1.00 per share. See the DGVXX money market fund prospectus for more complete information, including terms, management fees, prevailing rates, and expenses. A prospectus can be obtained by IAR or via our website at https://hilltopsecurities.com/disclosures/sweep-account- contacting an HTS disclosure/.Clients should consider the fund’s investment objectives, risks, and expenses carefully before investing. HTS has arrangements to receive compensation in the form of servicing fees and other fees, and other compensation based on assets invested in DGVXX. This compensation is not shared with the HTS IARs. The Firm anticipates receiving fees, including fees for administrative services, and other financial benefits for providing sweep funds on deposit with the BID program. Free Credit Balances Free credit balance refers to the amount of cash held in a client account resulting from sales of securities, dividends, interest, deposits or otherwise, which is free from any withdrawal restrictions. Free credit balances are held by HTS and are payable to the Client on demand. HTS uses their customers’ free credit balances to earn interest and other compensation, to the extent permissible under Rule 15c3-3 of the Securities Exchange Act of 1934. HTS considers free credit balances to be temporarily held in Client accounts for the purpose of reinvestment or otherwise being held awaiting investment. HTS may, but is not required to, pay interest on the free credit balances. As such, free credit balances should not be held by the Client solely for the purpose of earning interest. Clients are responsible for monitoring their free credit balances to determine whether a sweep program offered by HTS would be more appropriate for them. As discussed above, HTS has a conflict of interest when determining the interest rates it pays on free credit balances. Interest is calculated daily based on the free credit balance in the account as of the close of business the prior business day. Interest is then credited to a client account on a monthly basis. Interest rates are subject to change at any time and without notice based on a number of internal and external factors including current market conditions, interest rates, 45 | P a g e  and other market factors. For current rates on Free Credit Balanced, please discuss with an HTS IAR or visit our website: https://hilltopsecurities.com/disclosures/sweep-account-disclosure/. Limitation on Security Type Except as may be provided in connection with the Sweep Program, in general, participating Investment Managers in the Endeavor, Compass UMA, Momentum Pathways UMA, and Passport Series SMA Programs may not directly invest assets in cash equivalent securities or instruments such as money market securities. Please discuss with an HTS IAR the sweep and position-traded money market mutual fund options available in the Aviator, Co-Pilot and Navigator UMA Programs. Account Requirements and Types of Clients The minimum initial account values for the Programs described in this Disclosure Brochure are listed below. HTS has discretion to terminate any Program account if they fall below the minimum Account Value guidelines established by HTS. Under certain circumstances, HTS has discretion to grant an exception to the minimum Account Value. Program Name Financial Planning/Consulting Aviator and Co-Pilot Compass UMA Passport Series SMA Gateway FSP Momentum Pathways UMA Endeavor Foundation Endeavor Flagship Endeavor Hilltop Models Navigator UMA Destinations Fee Based Annuity Minimum Account Size No Minimum $30,000 $25,000 $100,000 (Subject to Managers Minimum) $25,000 (Subject to Managers Minimum) $100,000 (Subject to Managers Minimum) $2,000 $10,000 $25,000 $30,000 $25,000 Types of Clients HTS generally provides investment advisory services for individuals, individual retirement accounts (“IRAs”), banks and thrift institutions, pension, and profit-sharing plans, including plans subject to ERISA, trusts, estates, charitable organizations, state and municipal government entities, corporations, and other business entities. HTS can prohibit anyone or any account type from establishing a Program account for any reason, including if it is determined not to be an appropriate investment strategy for the Client. The minimum initial Account Values for the Programs described in this document are listed above. HTS has discretion to terminate any Program account if they fall below the minimum Account Value guidelines established by HTS. Under certain circumstances, HTS has discretion to grant an exception to the minimum account value requirement. Conflicts of Interest Conflicts of interests can arise with respect to a variety of business and other relationships in almost any investment advisory Program. When HTS acts as the Client’s Investment Advisor, HTS and the IARs earn more when the Client invests more in their advisory account, and HTS earns the same advisory fee rate regardless of how frequently the Client trades. HTS also receives payments from affiliated parties and third parties, including the investment products in which the Client invests, and their sponsors. These third-party fees are disclosed in this ADV Brochure and the investment product’s prospectus and other offering documents. Please refer to the “Other Financial Industry Activities and Affiliations” below for discussion of conflicts of interest relationships and product-specific compensation that is received by HTS. For additional conflicts of interest information relating to HTSPM, please see that detailed section above in this brochure. 46 | P a g e  Review of Accounts Program Services include periodic reviews and monitoring of the Clients account by their IAR. In addition, monthly and/or quarterly reviews are conducted by HTS Wealth Management Supervision. For Clients of IARs registered through HTS, trading activity is reviewed on a daily basis by the Branch Manager or designee assigned to the IAR. Other reviews, as deemed appropriate, are conducted by Wealth Management Supervision, ASG, the Branch Manager or designee. IARs registered through HTS conduct reviews on at least an annual basis, which can provide an opportunity for the Client to update HTS with any material changes in their financial condition, risk tolerance, objectives, and/or investment restrictions. Additional information relating to review of HTSPM accounts is noted above in this brochure. Client Reports Clients receive written or electronic custodial account statements monthly if there is activity, or quarterly in the absence of activity. Confirmations of all securities buy/sell transactions. In addition, performance reports are available upon request. The Insurance Carrier will provide all statements and confirmations for the Destinations Program. Performance Based Fees HTS does not charge for performance-based fees in any of its managed account Programs. Methods of Analysis, Investment Strategies and Risk of Loss Additional information relating to HTSPM Methods of Analysis, Investment Strategies and Risk of Loss are detailed above in this brochure. Investment Manager Selection and Evaluation The specific methods of analysis used, and Investment Strategies for each Program are described under each Program. HTS uses the following investment strategies, as appropriate, when managing or making recommendations for Program Accounts: Long-term Purchases Where appropriate, HTS employs a long-term investment strategy when formulating the investment advice given to Clients. This entails the purchase of securities with the idea of holding them in the Client’s account for a year or longer. This occurs when HTS believes the securities to be currently undervalued. This also applies when HTS wants exposure to a particular asset class over time, regardless of the current projection for this class. A risk in a long-term purchase strategy is that, by holding the security for this length of time, HTS does not take advantage of short- term gains that could be profitable to the Client. Moreover, if HTS’s assumptions are incorrect, a security could decline sharply in value before HTS makes the decision to sell. Short-term Purchases Where appropriate, HTS also purchases securities with the idea of selling them within a relatively short time, typically a year or less. HTS does this in an attempt to take advantage of conditions that are believed will soon result in a price swing in the securities purchased. A risk in a short-term purchase strategy is that, should the anticipated price swing not materialize, HTS is left with the option of having a long-term investment in a security that was designed to be a short-term purchase, or potentially taking a loss. In addition, this strategy involves more frequent trading than does a longer-term strategy, and results in increased brokerage and other transaction-related costs, as well as less favorable tax treatment of short-term capital gains. Short Sales A short sale is a transaction in which the Client sells a security they do not own. HTS borrows shares of a stock for the Client’s portfolio from someone who owns the stock on a promise to replace the shares on a future date at a certain price. HTS then sells the shares HTS has borrowed. On the agreed-upon future date, HTS buys the same stock and returns the shares to the original owner. HTS engages in short selling based on HTS’s determination that the stock will go down in price after HTS has borrowed the shares. If the stock has gone down since HTS purchased the shares from the original owner, the Client keeps the difference. There are certain costs associated with the securities that HTS 47 | P a g e  borrows on the Client’s behalf, and they agree to pay such costs. One risk in selling short is that losses are theoretically unlimited. HTS is obligated to repurchase the stock no matter how much the price has climbed. In addition, even if HTS is correct in determining that the price of a stock will decline, HTS runs the risk of incorrectly determining when the decline will take place. Short selling has greater risks in times of inflation, as prices adjust upwards regardless of the relative value of the stock. For more information relating to risks and costs of short sales, please refer to the Hilltop Securities Customer Information Brochure. Margin Leverage strategies, such as using margin, are desirable in some cases but are generally not recommended for Advisory accounts. If the account is approved for margin trading, the Client could be required to deposit additional securities or cash on short notice to maintain the position and/or to maintain sufficient assets to meet HTS’s requirements. If the Client do not meet requirements in the required time frame, HTS has discretion to liquidate all or a portion of the holdings. The Client will be liable for any resulting deficit in the account. Margin trading can work against the Client, for example, larger losses as well as the potential for larger gains. Before the Client begin using margin, please read the “Margin Disclosure” brochure available from the IAR. Maintaining a margin account balance will also increase the wrap fee to the extent of the margin exposure. It is important that the Client fully understand the risks involved in trading securities on margin. These risks include but are not limited to the following: • The Client can lose more funds than the Client deposits in the margin account. • HTS can force the sale of securities or assets in the account and in some cases without contacting the Client. • The Client will pay interest on the outstanding margin loan balance. • The use of margin can have a positive or negative performance effect, net of interest charges and other account fees that likely will be greater as a consequence of using margin. As a result, gains or losses in a leveraged managed account are likely to be greater than would be the case with an unleveraged managed account. As explained in the Margin Disclosure brochure, HTS has discretion when setting the interest rate for the margin balance, and HTS earns more revenue the higher it sets this interest rate. This creates a conflict of interest because HTS has a financial incentive to charge the Client higher-than-market-rate interest rate for margin loans. HTS has the right to loan to third parties the securities pledged to secure the margin balance, HTS earns revenue from these loans, and HTS retains all of this revenue. This creates a conflict of interest because HTS has the ability to determine which securities will be pledged to secure the debit balance, and HTS has a financial incentive to loan the securities that will result in the greatest level of revenue for HTS. For more information relating to risks and costs of margin, please refer to the HTS Customer Information Brochure. Options Certain types of option trading are permitted in order to generate income or hedge a security held in certain Program Accounts; namely, the selling (writing) of covered call options or the purchasing of put options on a security held in the Program account. The Client should be aware that the use of options involves additional risks. The risks of covered call writing include the potential for the market to rise sharply. In such a case, the option counterparty has the right to call away the security and the Program account will no longer hold the security. The risk of buying long puts is limited to the loss of the premium paid for the purchase of the put if the option is not exercised or otherwise sold by the Program account. Options involve risk and are not suitable for all investors. The Client should read the “Characteristics and Risks of Standardized Options” brochure provided by their IAR. There are costs associated with options trading, and the Client agrees to pay such costs. Risk of Loss The Client should understand that all investments involve a certain amount of risk. Investment performance can never be predicted or guaranteed and that the values of the accounts will fluctuate due to market conditions and other factors. The Client should also understand that HTS makes no representations or warranties with respect to the present or future 48 | P a g e  level of risk or volatility in, or the future performance of, the account. The Client should further understand that the Client is assuming the risks involved with investing in securities and other investment products and should understand that the Client could lose all or a portion of the amount held in the account(s). Below are some of the common risks the Client should consider prior to investing. This list is not a complete enumeration or explanation of the risks involved, and the Client should consult with the IAR and the legal and tax advisers before investing in any particular strategy. • Market Risks: The prices of, and the income generated by, the common stocks, bonds, and other securities the Client owns can decline in response to certain events taking place around the world, including those directly involving the issuers; conditions affecting the general economy; overall market changes; local, regional, or global health, political, social, or economic instability; governmental or governmental agency responses to economic conditions; and currency, interest rate, and commodity price fluctuations. • Asset Allocation and Diversification Risk: The performance of Accounts is dependent on the allocation of securities among various asset classes and the selection of underlying Funds. There is a risk that IAR’s decisions regarding asset allocation and the selection of investments will cause an Account’s performance to lag relevant benchmarks or will result in losses. While allocations to multiple asset classes can reduce risk, risk cannot be completely eliminated with diversification. Asset allocation and diversification do not guarantee a profit or protect against loss. • • Long-Term Purchases Risk: IARs often recommends that Clients purchase investments with the intention of holding them for one year or longer. This recommendation is often because the IAR believes the investments to be undervalued at the time of purchase and/or because the IAR chooses to recommend exposure to a particular asset class over time, regardless of the current projection for such class. A risk of a long-term investment strategy is that by holding an investment for a longer period of time, the Client is not able to take advantage of potential short-term gains. Moreover, if the analysis is incorrect, an investment can decline sharply in value before it is sold. • Volatility and Correlation Risks: Clients should be aware that the IAR’s asset selection process is based in part on a careful evaluation of past price performance and volatility in order to evaluate future probabilities. However, it is possible that different or unrelated asset classes exhibit similar price changes in similar directions, which can adversely affect the Client and become more acute in times of market upheaval or high volatility. Past performance is no guarantee of future results, and any historical returns, expected returns or probability projections do not reflect actual future performance. • Fixed Income Risk: Bonds offer return of principal if held to maturity, but any bond remains subject to the creditworthiness of the guarantor and, prior to maturity, the bond is subject to interest rate, inflation, and credit risks. • Credit Risk: Changes in the financial condition of an issuer or counterparty and changes in specific economic or political conditions that affect a particular type of security or issuer can increase the risk of default by an issuer or counterparty, which can affect a security’s or instrument’s credit quality or value. Lower quality debt securities and certain types of other securities involve greater risk of default or price changes due to changes in the credit quality of the issuer. • Municipal Bond Risk: The municipal market can be affected by adverse tax, legislative, or political changes and the financial condition of the issuers of municipal securities. Municipal funds normally seek to earn income and pay dividends that are expected to be exempt from federal income tax. If a fund investor is a resident in the state of issuance of the bonds held by the fund, interest and dividends are sometimes exempt from state and local income taxes. Income exempt from regular federal income tax (including distributions from tax-exempt, municipal, and money market funds) are sometimes subject to state, local, or federal alternative minimum tax. Certain Funds normally seek to invest only in municipal securities generating income exempt from both federal income taxes and the federal alternative minimum tax; however, outcomes cannot be guaranteed, and the Funds sometimes generate income subject to these 49 | P a g e  taxes. For federal tax purposes, a fund’s distributions of gains attributable to a fund’s sale of municipal or other bonds are generally taxable as either ordinary income or long-term capital gains. Redemptions, including exchanges, can result in a capital gain or loss for federal and/ or state income tax purposes. Tax code changes could impact the municipal bond market. Tax laws are subject to change, and the preferential tax treatment of municipal bond interest income could be removed or phased out for investors at certain income levels. • International/Global Securities Risk: expose the investor to currency risk and political, social, and economic risks of the countries in which the securities are domiciled, in addition to the equity or debt nature of the securities involved. • Pooled Investments Risk: Certain strategies invest in one or more pooled investment funds including mutual funds, ETFs, UITs Real Estate Investment Trusts, etc. The Client should read the offering documents (e.g., prospectus, offering memorandum, etc.) carefully to fully understand the various risks, investment objectives, expenses and other information about the company associated with the investment. • Market Trading Risks: Exchange Traded Funds/Notes face various market trading risks. These include the potential lack of an active market for Fund shares, losses from trading in the secondary markets, periods of high volatility and disruption in the creation/redemption process of the Fund. As a result of any of these factors, among others, the Fund’s shares can trade at a premium or discount to the NAV. For additional information please refer to the Fund’s prospectus for more specific market trading risk. • Legislative and Regulatory Risk: Investments in the Clients Account can be adversely affected by new (or revised) laws or regulations. Changes to laws or regulations can impact the securities markets as a whole, specific industries and individual issuers of securities. The impact of these changes is not always known for some time. • Liquidity Risk: Liquidity is the ability to readily convert an investment into cash. Generally, assets are more liquid if many traders are interested in standardized products. There is a greater degree of illiquidity in those non-standardized products such as Alternatives, Structured and other products that are redeemed by the issuer’s acceptance of a tender offer. • Structured Products Risks: Structured products are a hybrid between two asset classes (typically in the form of a note or CD) but instead of having a pre-determined rate of interest, the return is linked to the performance of an underlying asset class. Investing in structured products involves special risks, including, but not limited to, risks associated with derivative instruments. Other risks may include market risk, management and securities selection risk, investment objective and asset allocation risk, equity market risk, fixed income securities risk, credit risk, foreign issuer and investment risk, emerging market risk, commodities risk, and currency risk. Structured products are complex investments and involve special risks. As a result, these may not be suitable for all investors. • Alternative Investment Risks: Generally speaking, alternative investments employ various investment strategies for hedging and other speculative purposes and may also utilize techniques such as short selling, leverage, derivatives, and options, which can increase volatility and magnify the risk of investment loss. Alternative investments are therefore considered speculative and may involve a high degree of risk. These risks are potentially greater than and different from those associated with traditional equity or fixed income investments. Concentration in a few alternative investments further magnifies these risks. Please refer to the offering documents and/or prospectus and discuss the associated risks further with a HTS’s IAR. Alternative investments, including hedge funds, private equity, alternative mutual funds, non-traditional ETFs, managed futures, real estate investments, private credit and interval funds may present unique risks, such as decreased liquidity and transparency and increased complexity. The use of derivatives involves multiple risks. In addition, to the extent the alternative investment uses commodities as part of its investment strategy, the investment return may also vary as a result of fluctuations in the supply and demand of the underlying commodities. Real estate and related investments will be subject to risks generally related to real estate, including risks specific to geographic 50 | P a g e  areas in which the underlying investments were made. Certain alternative investments may be less tax efficient than others. Each alternative investment is typically subject to internal fees including but not limited to management and/or performance fees, which affect the investments’ net asset value and reduce the return that the Client will realize with respect to the investment. Additional risks may include, but are not limited to, style-specific risk, credit risk and lower quality debt securities risk, equity securities risk, financial services companies’ risk, interest rate risk, non-diversification risk, small and mid-cap company risk and special risks of mutual funds and/or ETFs. • Cybersecurity Risk: With the increased use of technologies to conduct business, corporate and personal technologies are susceptible to information security and related risks. In general, cyber incidents can result from deliberate attacks or unintentional events and arise from external or internal sources. Cyberattacks include but are not limited to gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information; corrupting data, equipment or systems; or causing operational disruption. Cyberattacks are also carried out in a manner that does not require gaining unauthorized access, such as causing denial- of- service attacks on websites (i.e., efforts to make network services unavailable to intended users). Cyber incidents affecting HTS, its affiliates or IARs, or any other service providers (including, but not limited to accountants, custodians, transfer agents, and financial intermediaries used by a fund or an account) have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the ability to calculate net asset value (“NAV”), impediments to trading, the inability to transact business, destruction to equipment and systems, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. Similar adverse consequences could result from cyber incidents affecting issuers of securities in which an Account invests, counterparties with which an entity engages in transactions, governmental and other regulatory authorities, exchange and other financial market operators, banks, brokers, dealers, insurance companies and other financial institutions (including financial intermediaries and service providers), and other parties. • Digital Assets Risk: Digital assets represent a new and rapidly evolving industry. The value of digital assets depends on the acceptance of the digital assets, the capabilities and development of blockchain technologies and the fundamental investment characteristics of the digital asset. Digital asset networks are developed by a diverse set of contributors and the perception that certain high-profile contributors will no longer contribute to the network could have an adverse effect on the market price of the related digital asset. Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets could have an adverse effect on the market price of such digital assets. A substantial direct investment in digital assets may require expensive and sometimes complicated arrangements in connection with the acquisition, security and safekeeping of the digital asset and may involve the payment of substantial acquisition fees from third party facilitators through cash payments of U.S. dollars. Because the value of digital assets may be correlated with the value of Bitcoin, it is important to understand the investment attributes of, and the market for, the underlying digital asset. The Client should consult with their IAR. Investments in digital assets are speculative investments that involve high degrees of risk including a partial or total loss of invested funds and are not suitable for any investor that cannot afford loss of the entire investment. • Conflicts of Interest Risk: Sponsors of investment products may engage in business practices that conflict with the interests of investors in their products. These practices can have a negative impact on the market price of the investment products. Clients are encouraged to review the prospectus or other disclosure documents for the investment product and also discuss with their IAR the risks that may apply to them. • Equity Securities Risk: Strategies that invest in equity securities are subject to the risk that stock prices may fall over short or extended periods of time. Equity markets tend to move in cycles, and the value of each strategy’s equity securities may fluctuate drastically from day-to-day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The 51 | P a g e  prices of securities issued by such companies may suffer a decline in response. These factors contribute to price volatility, which is the principal risk of investing in the strategies that are offered. • Interest Rate Risk: Fixed income securities increase or decrease in value based on changes in interest rates. If rates increase, the value of these investments generally decline. On the other hand, if rates fall, the value of the investments generally increases. Securities with greater interest rate sensitivity and longer maturities generally are subject to greater fluctuations in value. Variable and floating rate securities are generally less sensitive to interest rate changes than fixed rate instruments, but the value of variable and floating securities may decline if their interest rates do not rise as quickly, or as much, as general interest rates. Many factors can cause interest rates to rise or fall. Some examples include the Central Bank Monetary Policy (such as an interest rate increase/decrease by the Federal Reserve), rising inflation rates and general economic conditions. • Inflation Risk: The risk is that the rate of inflation will exceed the rate of return on an investment. The investment value itself does not decline but its relative value does. • Default Risk: An issuer’s inability to remain solvent an pay any outstanding debt obligations in a timely manner. Adverse changes in the creditworthiness of the issuer (whether or not reflected in changes to the issuer’s rating) can decrease the current market value and may result in a partial or total loss of an investment. • Mid Cap and Small Cap Company Risk: The securities of mid or small cap companies may be subject to more abrupt or erratic market movements and may have lower trading volumes or more erratic trading than securities of larger sized companies or the market averages in general. • Emerging Markets Risk: International investing bears greater risk due to social, economic, regulatory, and political instability in countries in “emerging markets.” Emerging market securities can be more volatile and less liquid than developed market securities. Changes in exchange rates and differences in accounting and taxation policies outside the U.S. can also affect returns. Investments in foreign currencies and foreign issuers are subject to additional risks, including political and economic risks, greater volatility, civil conflicts and war, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, expropriation, and nationalization risks, and lets stringent investor protection and disclosure standards. These risks are magnified in countries in “emerging markets.” • Environmental, Social and Governance Consideration Risk: ESG risk is the potential losses or negative impacts that can result from investing in companies, assets, or industries that do not align with environmental, social, and governance principles and market trends. Consideration of ESG factors in the investment process may cause an IAR or manager to forgo opportunities to recommend or invest in certain companies or to gain exposure to certain industries or regions. There is a risk that, under certain market conditions, a strategy pursuing strategies that consider ESG factors may underperform strategies that do not consider such factors. • Government Obligation Risk: Client assets may be invested in securities issued, sponsored, or guaranteed by the U.S. Government, its agencies, and instrumentalities. However, no assurance can be given that the U.S. Government will provide financial support to U.S. Government-sponsored agencies or instrumentalities where it is not obligated to do so by law. For instance, securities issued by the Government National Mortgage Association (Ginnie Mae) are supported by the full faith and credit of the federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) have historically been supported only by the discretionary authority of the U.S. Government. While the U.S. Government provides financial support to various U.S. Government- sponsored agencies and instrumentalities, such as those listed above, no assurance can be given that it will always do so. • Quantitative Strategy Risk: Quantitative analysis uses complex mathematical models and statistics to analyze past events to make investment decisions about security performance (or larger market movements) in the future. Common risks encountered in using quantitative analysis are that the models 52 | P a g e  used are based on assumptions that prove to be incorrect, and that the underlying sets of historical data utilized by the manager are incomplete. • Technical Strategy Risk: Technical analysis involves the use of statistical data, and trends in that data, to identify trading opportunities. Technical analysis does not consider the underlying financial condition of a company, or the intrinsic value of its securities. This type of analysis presents a risk in that a poorly managed or financially in sound company may underperform regardless of larger movements in the market. • Concentration Risks: When assets are invested in a small number of issuers, specific asset type or overly exposed to particular sectors, industries or geographic regions that may create more vulnerability to unfavorable developments in these issuers, asset type, sectors, industries or geographic regions and greater risk of loss than those that are more broadly invested. • Frequent Trading and Portfolio Turnover Risks: The turnover rate within the Advisory Program account may be significant. Frequent trades may result in higher transaction costs, including substantial brokerage commissions, fees, and other transactions costs. In addition, frequent trading is likely to result in short-term capital gains tax treatment. As a result, frequent trading and portfolio turnover in an Advisory Program account may have an adverse effect on the cost and therefore the return on the Advisory Program account. • Infrequent Trading/Low Portfolio Turnover Risk: Advisory Program accounts may trade infrequently and experience low trading/turnover. As set forth elsewhere in this brochure, wrap fees charged are intended to cover various service, including trade execution. If a specific Clients Program account experiences low trading/turnover, the Client may not realize the full benefit of wrap fee paid with respect to such wrap account. Clients are encouraged to discuss the expected and/or historical level of trading with their IAR when evaluating the cost of a proposed or existing wrap account. • High Yield/Junk Bond Risk: Certain investment strategies invest in securities and instruments that are issued by companies that are highly leveraged, less creditworthy, or financially distressed. These investments are considered speculative and are subject to greater risk of loss, greater sensitivity to interest rate and economic changes, valuation difficulties and potential illiquidity. • Mutual Fund and/or ETF Risk: A common risk of mutual fund and/or ETF analysis is that, as with other securities investments, past performance does not guarantee future results. A manager who has been successful in identifying profitable opportunities among mutual funds may not be able to replicate that success in the future. In addition, as HTS does not control the underlying investments in a mutual fund or ETF, manager of different funds held by the client may purchase the same security, creating concentrated exposure for the client to that security and increasing the risk to client if that security were to fall in value. There is also risk of a manager deviating from the stated investment mandate or strategy of the mutual fund or ETF, which could make the holding(s) less suitable for the client’s portfolio. • Closed End Fund Risk: CEFs are subject to market volatility and the risks of underlying securities which might include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments. Investment return will vary and an investor’s shares, when sold, might be worth more or less than their original cost. CEFs with complex or specialized investment strategies may experience increased market price volatility. For more information relating to the specific risk of the CEFs purchased, Clients should contact the fund’s sponsor and/or the IAR. • Unit Investment Trust Risk: A UIT is a pooled investment vehicle in which a portfolio of securities is selected by the sponsor and deposited into the trust for a specified period of time. The portfolio of a UIT is designed to follow an investment objective over a specified time period, although there is no guarantee that the objective will be met. UITs can have many different investment objectives and strategies, including equity, fixed income, balanced, international, and global strategies, and strategies that focus on a particular market capitalization, investment style, economic industry or sector, or geographic region. UITs are passively managed and follow a buy and hold strategy, meaning that UITS buy a fixed portfolio of securities and hold on that portfolio until their termination date at which time 53 | P a g e  the portfolio is liquidated with the net proceeds paid to investors. UITs generally have a relatively higher risk of loss than other funds in the event of adverse changes in market or economic conditions. UITs have other risks, which may include management and securities selection risk, investment objective and asset allocation risk, stock market risk, equity securities risk, common stock risk, fixed income securities risk, interest rate risk, credit risk, capitalization risk, investment style risk, foreign issuer in investment risk, and emerging market risk. Certain UITs pursue Complex Strategies, which are subject to special risks. The degree of these and other risks will vary depending on the type of UIT selected. Also, investment return and principal value will fluctuate, and units, if and when redeemed, may be worth more or less than their original cost. • Technology Risk: The offerings within the Programs are dependent upon various computer and telecommunication technologies, many of which are provided by or are dependent on third parties. The successful operation the Program could severely compromised by system or component failure, telecommunication failure, power loss, a software related system crash, unauthorized system access or use (such as “hacking”), computer viruses and similar programs, fire or water damage, human errors in using or accessing relevant systems, or various other events or circumstances. It is not possible to provide comprehensive and foolproof protection against all such events, and no assurance can be given about the ability of applicable third parties to continue providing their services. Any event that interrupts such computer and/or telecommunication systems or operations could have a material adverse effected on the Program. Such a material adverse effect may have a heightened impact on some of the Programs given the automated nature of the services provided. • Insurance Carrier Risk: The risk associated with an insurance carrier’s financial strength in meeting current, ongoing, and senior financial obligations, which are obligation to policy/contract holders. An insurance carrier’s balance sheet strength, operating performance and financial profile are major factors that quantify an insurance carrier’s financial strength. • Derivative Instrument Risk: The value of options, convertible securities, futures, swaps, forward contracts, and other derivative instruments is derived from an underlying asset such as a security, commodity, currency, cryptocurrency, or index. Derivative instruments often have risks similar to the underlying asset, however, in certain cases, those risks are greater than the risks presented by the underlying asset. Derivative instruments may experience dramatic price changes and imperfect correlations between the price of the derivative and the underlying asset, which may increase volatility. Derivatives generally create leverage, and as a result, a small movement in the underlying asset’s value can result in large change in the value of the derivative instrument. Derivatives are also subject to liquidity risk, interest rate risk, market risk, credit risk, management risk and counterparty risk. The use of these instruments is not appropriate for some clients because they involve special risks. A Client should not invest in these instruments unless the Client is prepared to experience volatility and significant losses in the account. • Non-Traditional Assets Risk: Non-Traditional Assets, such as commodities, currencies, cryptocurrencies, securities indices, interest rates, credit spreads and private companies, are subject to risks that are different from, and in some instances, greater than, other assets like stocks and bonds. Some Non-Traditional assets are less transparent and more sensitive to domestic and foreign political and economic conditions than more traditional investments. Non-Traditional Assets are also generally more difficult to value, less liquid, and subject to greater volatility compared to stocks and bonds. • Commodities Risk: Investments in commodities markets or a particular sector of the commodities markets, and investments in securities or other instruments denominated in or indexed or lined to commodities, are subject to certain risks. Those investments generally will subject a Client Account to greater volatility than investments in traditional securities. The commodities markets are impacted by a variety of factors, including changes in overall market movements, domestic and foreign political and economic conditions, interest rates, inflation rates and investment and trading activities in commodities. Prices commodities may also be affected by factors such a drought, floods, weather, livestock disease, embargoes, tariffs, and other regulatory developments. The prices of commodities can also fluctuate 54 | P a g e  widely due to supply and demand disruptions in major producing or consuming regions. Certain commodities may be produced in a limited number of countries and may be controlled by a small number of producers or groups of producers. As a result, political, economic and supply related events in such countries could have a disproportionate impact on the prices of such commodities. No active trading market may exist for certain commodities investments, which may impair the value of the investments. • Currency Risk: Changes in foreign currency exchange rates will affect the value of certain portfolio securities. Generally, when the value of the U.S. dollar rises in value relative to a foreign currency, an investment impacted by that currency loses value relative to a foreign currency, an investment impacted by the currency loses value because that currency is worth less in U.S. dollars. Currency exchange rates may fluctuate significantly over short periods of time for various reasons, including changes in interest rates. Devaluation of a currency by a country’s government or banking authority also will have a significant impact on the value of any investments denominated in the currency. Currency markets generally are not as regulated as securities markets, which may be riskier than other types of investments and may increase the volatility of a portfolio. • Hedging Risk: Hedging techniques involve risk such as the possibility that losses on the hedge may be greater than the gains in the value of the positions of the Program account. • Exchange Traded Notes Risk: Risks of investing in exchange traded notes include, among others, index or benchmark complexity, price volatility, market risk associated with the index or benchmark, uncertain principal repayment based on the issuing financial institution and potential illiquidity. Please ask a HTS IAR for the ETN prospectus for a description of the specific index or benchmark to which its performance is linked as well as a description of the risks of investing in the ETN and any of the non- traditional or complex investment strategies that the ETN follow or seeks to replicate. • Exchange Traded Fund Risk: There may be a lack of liquidity in certain ETFs which can lead to a large difference between the bid-ask prices (increasing the cost to the Client when they buy or sell the ETF). A lack of liquidity can cause an ETF to trade at a large premium or discount to its net asset value. Additionally, an ETF may suspend issuing new shares and this could result in an adverse difference between the ETF’s publicly available share price and the actual value of its underlying investment holdings. At times when underlying holdings are traded less frequently, or not at all, an ETF’s returns also may diverge from the benchmark it is designed to track. • Managed Futures Risk: Managed futures strategies may seek exposure to different asset classes, such as equity securities, fixed income securities, commodities, currencies, interest rates, and indices. Investing in managed futures involves risks, including but not limited to, liquidity risk and risks associated with commodities, currencies and other non-traditional assets, leverage, derivative instruments, and complex strategies. Other risks may include market risk, fixed income securities risk, interest rate risk, credit risk, foreign issuer and investment risk and emerging market risk. Investors investing in these strategies should have a high tolerance for risk, including the willingness and ability to accept significant price volatility, potential lack of liquidity and potential loss of their investment. • Master Limited Partnership Risk: Investments in Program Accounts in securities of MLPs involve risks that differ from investments in common stock, including limited control and limited voting rights; dilution; compulsory redemptions at an undesirable time or price because of regulatory changes; and greater price volatility. • Climate Change Risk: Climate change, its physical impact, and related regulations could result in significantly increased operating and capital costs that could materially impact certain portfolio companies of Program account. • Key Personnel Risk: Advisory Program Accounts rely on certain key personnel who may leave or become unable to fulfill certain duties. 55 | P a g e  Clients should understand that investing in any security involves a risk of loss of both income and principal. There can be no assurance that the IAR’s or HTS’s investment advice and recommendations will be successful or that Client’s investment objective will be achieved. Voting Client Proxies HTS will not vote on matters requiring shareholder voting in connection with the securities held in the account, or with respect to certain legal actions involving securities including, for example, voting proxies, mergers, bankruptcies, restructuring, class actions, or similar matters. Under the circumstances where HTS receives material on the Client’s behalf, HTS will promptly forward such material to the Client’s attention. HTS does not offer advice regarding proxy voting; this is the sole responsibility of the shareholder. With respect to the Passport Series, Momentum Pathways, Endeavor and Gateway FSP Programs, Envestnet and/or Investment Managers have discretion vote the proxy. The Client may request information on how their securities were voted by contacting HTS. HTS will aid any customer to obtain proxy voting information if requested. For more information relating to the voting of proxies by Envestnet and/or the Investment Manager, please refer to their respective disclosure brochures. If such information is not readily available, it would be grounds for termination of the Investment Manager. Any problems will be immediately referred to the Advisory Services Manager and the Chief Compliance Officer (“CCO”) of HTS. Client Information Provided to Investment Managers Information Provided to Envestnet When the Client establishes an Advisory Services Group Program account, HTS will send information about the Client and the account to Envestnet including the name, address, account assets, taxable status, account registration type, state/country of residence, the Client’s Statement of Investment Selection, any applicable restrictions, and the account activity. Upon acceptance of the account, Envestnet will forward the foregoing information on to the Investment Manager in order for the Investment Manager to effectively manage the account. Investment Managers are not provided with Client specific information, except for the brokerage number, account size and information about the IAR. In some cases, HTS sends the Investment Manager duplicate brokerage statements and/or confirmations. Client Contact with Investment Managers and Insurance Carriers The IAR will be the primary point of contact for addressing any questions or concerns relating to the managed account. If the Client is enrolled in a Program that employs an Investment Manager or Insurance Carrier, HTS imposes no limitations on the Client’s ability to consult their Investment Manager(s) or Insurance Carrier directly, but the Client is encouraged to first contact their IAR. Account Termination Investment advisory services may be terminated by either party at any time. Upon termination, the Client is responsible for monitoring and managing the securities in their portfolio, and they will be subject to customary brokerage charges. HTS, the Client’s IAR, and any Investment Managers will have no further obligation to act or advise with respect to those assets. Any unused portion of the prepaid quarterly fee will be refunded and credited to the account. Such refunds will be pro-rated based on the number of days remaining in the calendar quarter for which the Client prepaid a fee. If the Client chooses to terminate their participation in any of HTS’s Programs, HTS can liquidate the account at that time if instructed to do so. If so instructed, HTS will liquidate the account in an orderly and efficient manner. HTS do not charge for such redemption if redeemed in the Advisory account. If the account is converted to a brokerage account and redemptions are executed in the brokerage account, standard commission rates will apply. The Client should be aware that certain mutual funds impose redemption fees as stated in their fund prospectus. The Client should also keep in mind that the decision to liquidate securities or mutual funds may have tax consequences that should be discussed with their tax advisor. IAR Termination from the Programs HTS retains the authority to remove any IAR from the Programs at any time and to transfer day-to-day management responsibility of the Client’s account to another HTS IAR or Branch Office Manager in certain situations, at any time without first notifying the Client or obtaining consent. In most cases this will result in the termination of the advisory 56 | P a g e  agreement and the need to establish an advisory agreement with newly assigned IAR. Under certain circumstances a new advisory agreement will not be required. When an IAR who managed Client assets in an ASG account leaves the firm, ASG will close the accounts as Advisory and a pro-rated refund, based on the number of days remaining in the calendar quarter will be credited to the Client’s account. If the accounts are assigned to a new IAR and the Client wishes to establish a new Advisory relationship, the newly appointed IAR will need to provide the Client with their ADV Part 2B and submit new ASG paperwork to establish the account in the program selected. Disciplinary Information Below is notice of certain regulatory and legal settlements entered into by HTS and/or its affiliates: In March 2013, SWST (now HTS) reached a settlement agreement with FINRA after allegations were made that the firm bought or sold municipal securities from customers at prices that were not considered fair given the current market conditions and also failed to properly report certain trades within the required time period. In addition, FINRA further alleged that the firm’s supervisory system with respect to the alleged conduct was insufficient. The firm agreed to a censure, $77,500 fine and $32,167.14 restitution plus interest. In August 2013, SWST (now HTS) reached a settlement agreement with FINRA for failure to transmit last sale reports to the appropriate trade reporting facility within the required time period. The firm agreed to a $5,000 fine. In November 2013, SWST (now HTS) reached a settlement agreement with FINRA for failing to execute the proper and timely close out of short positions creating a fail-to-delivery position in violation of FINRA rules relating to Regulation SHO. SWST (now HTS) agreed to a censure and $10,000.00 fine. In June 2014, SWST (now HTS) reached a settlement agreement with FINRA for failing to report the correct time of trade executions as required and failure to properly maintain record of the time of execution as required within the Firm’s records. SWST (now HTS) agreed to a censure and $12,500.00 fine. In October 2014, SWST (now HTS) reached a settlement with FINRA for failure to, within 30 seconds of execution, transmit last sale reports of transactions to the NASDAQ Trade Reporting Facility. FINRA further alleged that the firm failed to report the correct time of execution. The firm agreed to a censure and a fine of $17,500 and agreed to revise its Written Supervisory Procedures relative to the trade reporting of NMS Securities. In July 2015, affiliate FSC reached a settlement agreement with FINRA for failing to deliver Exchange Trade Fund Prospectuses to its own customer at the time of delivery of the security in contravention of Section 5 of the Securities Act of 1933. FSC agreed to a censure and $450,000 fine. In August 2015, an extended hearing panel decision was made to fine affiliate broker-dealer SWSFS (now MIN) $50,000. The sanction was based on the findings that the firm’s Supervisory system and its procedures were not reasonably designed to achieve compliance with rules relating to the suitability review process for certain variable annuity transactions and the time for transmitting Variable Annuity Transactions to the issuer. The findings also stated that the firm failed to implement adequate surveillance procedures to monitor its representatives. The panel also stated in the decision that FINRA did not prove that the firm lacked policies and procedures reasonably designed to implement corrective measures to address inappropriate exchanges to the conduct associated with the persons that engaged in inappropriate states. Further the decision stated that FINRA did not provide that the firm’s principals who reviewed the transactions lacked reasonable basis to believe the transactions were suitable for the customers or that the firm failed to document adequate training policies for its principals who reviewed Variable Annuity Transactions. In February 2016, the SEC instituted a cease-and-desist proceeding against affiliate SWST (Now HTS). The SEC found that SWST willfully violated section 17(A)(2) of the Securities Act by conducting inadequate due diligence in certain offerings and as a result failed to form a reasonable basis for believing the truthfulness of certain material representations in official statements issued in connection with those offerings. This resulted in the firm offering and selling municipal securities on the basis of materially misleading disclosure documents. The violations were self- reported by SWST to the commission pursuant to the SEC’s municipalities continuing disclosure cooperation initiative (MCDC). The firm was censured and paid a fine in the amount of $360,000 and is required to retain an independent consultant to conduct a review of the firm’s policies and procedures as they relate to municipal securities underwriting due diligence. 57 | P a g e  In March 2016, the SEC instituted a cease-and-desist proceeding against affiliate, FSC. The SEC identified violations by FSC relating to the Fair Dealing and Financial Advisory Agreement rules of the MSRB in connection with financial advisory services rendered by FSC to its municipal client during the time frame March through November 2010. Specifically, during the aforementioned time frame FSC rendered advisory services to the municipal client in connection with a 2010 bond issuance but failed to memorialize, through a written agreement, the specific services or tasks that FSC would provide in connection with the bond issuance until seven months into the financial advisory relationship. FSC was ordered to pay disgorgement of $120,000, prejudgment interest in the amount of $22,400 and a civil money penalty in the amount of $50,000. In May 2016, HTS reached a settlement with FINRA for failing to provide appropriate disclosures to clients, at the time of trade, when the client was affecting a bond transaction for quantities below the required minimum denomination. While the firm had written procedures in place which prohibited the sale of municipal securities to customers below the minimum denomination, subject to certain exceptions, it did not have any systems or controls in place to prohibit sales below the minimum denomination. The firm agreed to a censure and fine in the amount of $40,000. In November 2016, HTS reached a settlement with FINRA for failing to disclose the material aspects of its relationships with its execution venues as it pertains to “payment for order flow” arrangements. The firm is required to describe the material terms of the arrangements such as any amounts per share or per order that the firm receives. As a result of the firm’s failure to disclose the payment terms for these relationships, the firm violated SEC Rule 606 of Regulation NMS. The firm agreed to a censure, and a $10,000 fine. In April 2019, HTS reached a settlement with the CBOE/BZX exchange for failing to report reportable positions in expiring options, mistakenly deleting the positions in its large option position reporting system submissions that were set to expire on the following day or failing to report positions that the firm had added or modified on the expiration date. The firm agreed to a censure, and a $37,500 fine. In September 2019, HTS, reached a settlement with FINRA for failing to establish procedures to ensure that customers received in writing the initial disclosure stating the annual rate or rates of margin interest that could be imposed prior to opening their margin account and failed to establish, maintain, and enforce a supervisory system designed to achieve compliance with Rule 10b-16(a)(1). As a result, Hilltop violated SEC Rule 10b- 16(a)(1) and FINRA Rules 3110(a) and (b) and 2010. The firm agreed to a censure, and a $250,000 fine. In September 2019, Hilltop Securities (HTS) and affiliate broker-dealer Momentum Independent Network (MIN), jointly and severally, paid disgorgement of $736,497.48 and prejudgment interest of $74,287.92 for a total of $810,785.40. The U.S. Securities and Exchange Commission (SEC) brought numerous actions against investment advisers over the past several years that failed to make required disclosures, or the disclosures made were not written in a clear enough manner, related to its selection of mutual fund share classes that paid certain fees, known as 12b-1 fees, to representatives when a lower cost share class was available for the same fund that did not make those payments. 12b- 1 fees are sometimes also described as distribution and marketing fees and are generally paid to brokerage firms for distribution and shareholder services. As a result of these actions and related findings, the SEC implemented the Share Class Selection Disclosure initiative to allow firms to self- report circumstances in which the disclosures do not meet the SEC’s requirements. After conducting a review of its advisory business, HTS addressed this issue in January 2018 by enhancing its investment advisory programs to rebate to customers any 12b-1 fees paid by mutual funds held in managed accounts and by making disclosures regarding the 12b-1 payments. Although HTS did make disclosures regarding mutual fund 12b-1 payments, without admitting or denying the findings in the order, the SEC has indicated that the disclosures were not clear enough for investors to make an informed decision regarding offered advisory services and payments. As a result of the SEC’s decision regarding these fees and disclosures, without admitting or denying the findings, HTS accepted an offer from the SEC to settle this matter and agreed to the entry of an order which included HTS to return certain 12b-1 fees and interest charged to investors in managed accounts from January 2014 through January 2018. In agreeing to participate in this initiative, HTS will not be subject to a regulatory fine by the SEC. 58 | P a g e  On August 14, 2024, the Securities and Exchange Commission (“SEC”) entered into a settlement order with Hilltop Securities Inc. (“Hilltop”) to settle an administrative action finding that Hilltop failed to (1) maintain and preserve off- channel communications related to Hilltop’s broker-dealer business, as well as related to recommendations made or proposed to be made and advice given or proposed to be given with respect to Hilltop’s investment advisory business; and (2) reasonably supervise its personnel with a view to preventing or detecting certain of its personnel’s aiding and abetting violations of certain provisions of the federal securities laws. Hilltop admitted to the facts in the settlement order, acknowledged its conduct violated the federal securities laws, and agreed to: (a) a cease-and-desist order, (b) a censure, (c) payment of a civil monetary penalty in the amount of $1,600,000, and (d) certain undertakings related to the retention of electronic communications. Related Items: https://www.sec.gov/litigation/admin/2019/ia-5393.pdf In June 2020, HTS reached a settlement with FINRA for failure to establish and implement an anti-money laundering (“AML”) compliance program that was reasonably designed to detect and report suspicious trading activity in low- priced securities. FINRA alleged that HTS failed to conduct reasonable reviews of low-priced securities activity for the purposes of determining if a Suspicious Activity Report should be filed. The same settlement agreement also applied to the Firm’s failure to submit required regulatory filings to the MSRB’s EMMA system and G-17 disclosure letters to issuers in connection with primary offerings of municipal securities. HTS agreed to a $475,000.00 fine ($375,000 for AML and $100,000 for the municipal offerings), censure and to retain an independent consultant to conduct a review of the reasonableness of its policies, systems and procedures related to the AML matter. In July 2021, HTS reached a settlement with the Securities and Exchange Commission for failing to reasonably supervise a registered representative in connection with retail order periods for negotiated new issue municipal bonds. Between January 2016 and April 2018, HTS personnel obtained bonds for trading inventory accounts by placing orders with a co-managing underwriter during the retail order period. The retail order period is designed to grant first priority to retail investors for new issue municipal bonds. By placing the orders in this manner, the senior managing underwriter was unaware that bonds were being purchased for trading inventory accounts. HTS agreed to a $85,000.00 civil penalty, $206,606 disgorgement, $48,587 prejudgment interest, a censure and cease and desist injunction. In August 2023, Momentum Independent Network Inc., an affiliate of Hilltop Securities Inc., was issued a $2500 civil fine by the State of Maine for failing to perform a required onsite inspection for one (1) Branch Office location. Other Financial Industry Activities and Affiliations Hilltop Securities (HTS) Hilltop Securities (HTS) is a wholly owned subsidiary of Hilltop Securities Holdings LLC, a Delaware limited liability company. Hilltop Securities Holdings LLC is a wholly owned subsidiary of Hilltop Holdings Inc. (“HTH”), a Dallas-based financial holding company. Through Hilltop’s wholly owned subsidiary, PlainsCapital Corporation, a regional commercial banking franchise, it has two operating subsidiaries: PrimeLending and PlainsCapital Bank (“PCB”), including its subsidiary PlainsCapital Securities, LLC. HTS provides a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. Hilltop also has other wholly owned direct and indirect subsidiaries which are not material to the advisory business of HTS. Affiliates of HTS that are material to HTS’s advisory business include: • Momentum Independent Network Inc. (MIN) (formerly Hilltop Securities Independent Network Inc.), a dually registered Broker-Dealer and Registered Investment Adviser • Hilltop Securities Asset Management, LLC, a Registered Investment Advisor • Hilltop Securities Insurance Agency, Inc., a licensed insurance agency HTS, through its affiliation with Hilltop Securities Insurance Agency (“HSIA”), will earn commission-based compensation for selling insurance type products, such as life, disability, long term-care insurance, and fixed and variable annuities. In addition, some IARs also are licensed and operate as insurance agents and receive commission- based compensation for the sale of these types of products. Insurance commissions earned by IARs from the sale of these 59 | P a g e  products are separate and in addition to HTS’S advisory fees. Therefore, the sale of insurance and annuity products presents a conflict of interest because IARs who are also insurance agents have an incentive to recommend insurance and annuity products to the Client for the purpose of generating commissions. The Client is under no obligation to purchase products or services recommended by HTS or IARs of HTS in connection with any advisory service that HTS offers. HTS also has arrangements with MIN which are material to its advisory business. HTS and MIN are affiliated due to their common ownership by HTH. HTS is the sponsor of the MIN Advisory Programs through a co- advisory arrangement. For all Programs sponsored by MIN, HTS retains a portion of the Program fee for performing administrative services (such as reporting, record keeping, and fee billing administration). The portion of the Program fee retained by HTS generally ranges from 0.10% to 0.35% (annual rate) of the Account Value of each Program. Registration as a Broker-Dealer HTS, a full-service broker-dealer and Investment Adviser, provides fully disclosed securities clearing, securities brokerage and investment banking. As a registered broker-dealer, HTS is a member of Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). As an introducing broker, HTS engages in retail securities transactions for investment advisory and non-investment advisory Clients, along with certain other activities normally associated with a broker-dealer. In this capacity, HTS receives certain fees and commissions, including a share of commissions for effecting Client transactions. Any such fees are separate to the advisory fees a client pays HTS for the provision of investment advisory services. IARs are also associated with HTS as registered representatives. IARs are permitted to recommend the purchase of securities offered by HTS as a securities broker-dealer. If a client purchases these products through these individuals as registered representatives in regular brokerage accounts, they will receive normal commissions, including 12b-1 fees for the sale of investment company products, which are separate to the advisory fees the Client pays. As such, IARs have incentive to sell the Client commissionable products in addition to providing them with advisory services when such commissionable products may not be suitable. Therefore, a conflict of interest exists between their interests and the Clients’ interests. While HTS’s securities sales are reviewed for suitability by an appointed supervisor, the Client should be aware of the incentives HTS has to sell certain securities products, and the Client is encouraged to ask HTS about any existing or potential conflict of interest. Please be aware that the Client is under no obligation to purchase products or services recommended by HTS or IARs of HTS in connection with providing the Client with any advisory service that is offered. The Client may obtain information about their IAR, their licenses, educational background, employment history, and if they have had any disciplinary issues or received serious complaints from investors through the FINRA BrokerCheck service available from FINRA at http://www.finra.org, or from the Securities and Exchange Commission at www.adviserinfo.sec.gov. In addition, some of HTS’s IARs hold educational credentials, such as the Certified Financial PlannerTM (CFP®) designation. Holding a professional designation typically indicates that the IAR has completed certain courses or continuing education. However, an IAR's professional designation does not change the obligations of HTS or the IAR in providing investment advisory or brokerage services to Clients. Registration as an NFA Introducing Broker-Dealer HTS is registered as an introducing broker and is member of the National Futures Association (“NFA”), which is the self-regulatory organization for the U.S. futures industry. Client Referral and Other Compensation HTS pays referral fees to persons for referring advisory business to HTS pursuant to Rule 206 (4)-3 of the Investment Advisers Act. Such fees are only paid to persons with whom HTS has entered into formal referral agreements. HTS also requires that a referral fee disclosure statement be given to Clients (or prospective Clients) that discloses, among other things, the amount of fee to be paid to the referring person and the fact that the payment of such referral fees has not increased the amount of the total advisory fee that a client (or prospective Client) will pay. 60 | P a g e  Marketing Support from Product Sponsors HTS has agreements with certain mutual fund families, alternative investment sponsors, insurance companies, Investment Managers, ETF sponsors, UIT sponsors, and Turnkey Asset Management Program providers whose products are available on the firm’s platform who may contribute funds to support our IAR education Programs. These contributions are used to subsidize the cost of training seminars HTS offers to IARs through specialized firm-wide Programs and regional training forums. These training forums are designed to provide training and education of IARs, Field Leadership, Supervisors, and other personnel who solicit or support the business listed in this brochure. These contributions also subsidize a significant portion of the costs incurred to support the IAR, IAR and Client education, and product marketing efforts conducted regionally and nationally by product specialists employed by HTS. The training events can, and often, include a non-training element to the event such as business entertainment. Not all vendors contribute to HTS’S education efforts. Neither contribution towards these training and educational expenses, or lack thereof, is considered as a factor in analyzing or determining whether a vendor should be included or should remain in our Programs or our platform. Contributions can vary by a vendor and event. In some instances, the contributions per vendor are significant. Some vendors may decide to contribute at levels different than those requested by HTS. Additional contributions may be made by certain vendors in connection with specialized events or education or training forums. The HTS IAR does not receive a portion of these payments. However, their attendance and participation in these events, as well as the increased exposure to vendors who sponsor the events, tends to lead IARs to recommend the products and services of the vendors as compared to those who do not. Non-Cash Compensation HTS and our IARs receive non-cash compensation from these vendors in the following ways: • Sponsorship of educational events the IAR conducts for Clients and prospective Clients. • Contributions made at the firm level towards educational Programs for IARs. These contributions are significant and while the IARs do not receive a portion of the payment, a conflict arises in that the IARs participation in the educational events are exposed to vendors who sponsor the events and tend to lead the IARs to recommend the products and services of these vendors. • Various forms of marketing support and development of tools used by HTS and its IARs for training, practice management and record-keeping purposes. • Occasional gifts up to $100 per vendor per year. • Occasional meals, tickets, or other entertainment of reasonable and customary value. The thresholds and limits for gifts and entertainment are designed to mitigate conflicts related to recommending the products of the providers of such gifts, meals, or entertainment. The receipt of the cash and non-cash compensation from sources other than clients and the differences in the way HTS compensates IARs for products offered, create an incentive for IARs to recommend certain products and account types over others. Conflicts of interest are addressed by maintaining policies and procedures requiring the IARs act in the Client’s best interest, reasonably supervising their activities and by disclosing these conflicts to Clients so that Clients can make an informed decision. Brokerage Practices – Best Execution HTS renders investment advice to its clients on a non-discretionary and discretionary basis, pursuant to Client’s advisory agreement. In HTS’s advisory Programs the Client will generally appoint HTS as sole and exclusive broker for execution transactions, this relationship is referred to as directed brokerage. HTS will also be a clearing firm and custodian of the Client’s account. Through directed brokerage, HTS has benefits where it requires a client to utilize the services of an affiliated broker/custodian. The directed brokerage relationship creates a conflict of interest as Programs implemented through the affiliated broker-dealers pay commissions and/or transaction charges that are higher than at some other broker-dealers. Not all Investment Advisers who are dually registered as broker- dealers or who have affiliated broker-dealers require their clients to use the adviser’s broker-dealer to execute transactions. In placing orders for purchase and sale of securities and directing brokerage to affect these transactions, HTS’s primary objective is to seek prompt execution of orders at the most favorable prices reasonably obtainable. Envestnet and any appointed Investment Managers in the Passport Series, Momentum Pathways, Gateway FSP, Endeavor, Compass 61 | P a g e  UMA and Navigator Programs have discretion to cause trades to be executed by broker-dealers other than HTS if Envestnet and/or the Investment Manager reasonably determines in good faith that using another broker-dealer is likely to result in better execution than if the trades were executed by HTS. Occasionally, in order to seek best execution and minimize market impact, trades can be “stepped-out” in order to gain best execution and minimize market impact. In some instances, stepped-out trades are executed by the other firms without any additional commission or markup or markdown, but in other instances, the executing firm imposes a commission or a markup on the trade. If a Client’s Investment Manager steps-out trade orders for the Client’s account with a broker-dealer other than HTS, and the other broker-dealer imposes a commission or equivalent fee on the trade (including a commission embedded in the price of the investment), the Client will incur trading costs in addition to the Advisory Fee. HTS is not a party to step-out trades and is not in a position to negotiate the price or transaction related cost(s) with the broker, dealer or bank selected by Envestnet and/or the Investment Manager for these trades. Securities transactions in Client accounts participating in the HTS Programs are generally affected on a "net" basis (i.e., without commissions), and a portion of the fee is generally paid for advisory services provided. Clients will generally pay an asset-based fee for the brokerage/custody/clearing services provided by HTS as the broker/custodian (as opposed to transaction-based fees such as commissions), and those fees are generally included in the Program Fee for a Client. To the extent that such fees are not included in the Program Fee, the Client will be so informed in writing. Please refer to the Services, Fees, and Compensation section for details regarding fee arrangements. Brokerage practices and best execution for HTSPM is detailed above in this brochure. Payment for Order Flow HTS may receive remuneration in return for directing some customer orders for execution to particular exchanges or market centers. This remuneration, known as payment for order flow, is considered compensation to HTS and may include non-cash items such as reciprocal arrangements, discounts, rebates or reductions or credits against fees that would otherwise be payable in full by the Client’s Financial Professional. This arrangement creates a conflict of interest for HTS to route orders to certain exchanges or market centers in exchange for such compensation. Order routing statistics required under SEC rules are available on HTS’s website at https://www.hilltopsecurities.com/hilltop- securities-inc-disclosures/order-routing-disclosure/. Order Aggregation & Block Orders In order to seek a more advantageous net price, it is HTS’s practice to aggregate, when feasible, orders for purchase or sale of a particular security for accounts of several Program Clients for execution as a single transaction. Any benefit to such aggregation generally is allocated pro-rata among the Client accounts that participated in the aggregated transaction. HTS, Envestnet and/or the Investment Managers have the discretion to aggregate orders for Client accounts with the orders of other Clients, their own accounts, their employees, and their related persons. In such cases, the transactions, as well as the expenses incurred in the transactions are allocated according to HTS or the applicable sub-manager’s policy in a manner believed by it to be equitable to the Client. In such cases, each account will be charged with the average price per unit, and where applicable, with brokerage costs and other fees. Envestnet and/or the Investment Managers participating in the Passport Series, Momentum Pathways or Gateway FSP Programs may determine that the purchase or sale of a particular security is appropriate for more than one Client account. In such cases, Envestnet and/or the Investment Manager has the discretion to decide to aggregate multiple Client orders into one “block” order for execution purposes. This can have the advantage of avoiding an adverse effect on the price of a security which can result from simultaneously placing a number of separate competing orders. In the event a block transaction is affected by Envestnet and/or an Investment Manager, the Client will receive the average price of all transactions effected to satisfy the order. As a result, the average price received by the Client can be higher or lower than the price the Client would have received had the transaction been affected for the Client independently from the block transaction. When aggregating orders, and in the process of allocating block purchases and block sales to individual Client accounts, it is HTS’s policy to treat all Clients fairly and to achieve an equitable distribution of aggregated orders. Envestnet and/or the Investment Managers participating in the HTS Program also participate in other wrap fee Programs sponsored by broker/dealers not affiliated 62 | P a g e  with HTS. In addition, Envestnet and/or the Investment Managers typically manages institutional accounts not referred through a directed brokerage, wrap fee Program. In the event Envestnet and/or the Investment Manager wishes to buy or sell a security for all accounts within a particular discipline, they can affect such transactions through a large number of broker-dealers. Depending on the liquidity of the security and the size of the transaction, among other factors, Envestnet and the Investment Managers utilize a trade rotation process where one group of Clients (i.e., HTS Clients has a transaction effected before or after another group of clients so as to limit the market impact of the transaction. Envestnet and/or the Investment Managers trade rotation policies are at their discretion, and typically utilize a random selection process with the intent to equitably allocate transactions over time across Envestnet and/or the Investment Managers entire Client base. Each group of Clients can expect to receive executions at the beginning, middle and the end of the rotation. Additional information regarding Envestnet’s and/or the Investment Managers trade rotation policies, if any, is available in the sub-manager’s Form ADV Part 2. Detailed information about HTSPM order aggregation and block orders is detailed above in this brochure. Investment Managers Trade Rotation Investment Managers and Strategists participating in the Passport Series, Momentum Pathways and Gateway FSP Programs typically participate in other wrap fee Programs sponsored by other Advisory/broker-dealers, institutional accounts and even advise on mutual funds. When an Investment Manager directs a transaction (buy/sale) for a security for all accounts within a particular strategy, the Manager/Strategist may have to possibly direct similar transactions through a substantial number of firms. In this case the Investment Managers will employ a trade rotation process. This occurs when a group of Clients may have a transaction executed before or after another group of the Investment Managers Clients in other wrap fee Programs. This trade rotation seeks to limit the potential market impact of the transaction. The trade rotation process can result in HTS Clients being the first accounts in which a trade is aggregated and executed. Once completed, the Investment Manager will “rotate” to the next set of Clients or firms in the rotation; it is expected that HTS Clients will eventually be last in the rotation. The rotation process is developed and administered at the Investment Managers sole discretion. The selection process is generally random and is intended to create a fair way to allocate transactions to all participants. Over time, each group of participants should expect to receive executions at the beginning, middle and the end of the rotation. This can result in transactions being executed in their account near or at the end of the rotation. There can be a market price impact on trades executed later versus trades executed earlier in the rotation. Typically, the trade rotation process is also used to enable the Investment Manager to meet their best execution obligations. This can result in some of the Investment Manager to decide to employ a trade rotation process for all securities in their portfolio and trade only through the respective firm’s sponsoring the wrap fee Programs, while others may choose to employ a rotation process that includes making a determination to trade away from the sponsors frequently or on a majority basis. For additional information regarding each Investment Manager’s trade rotation, please refer to the specific Investment Manager’s Form ADV Part 2A. Due to this rotation HTS may not be able to process the trades on the same day that notice is received as time limitations due to market closing and receiving the trade late in the day. Best efforts are made to execute trades on the same day, but in some cases, it may be the next business day that the markets are open. Code of Ethics, Participation in Client Transactions and Personal Trading Code of Ethics HTS has adopted a Code of Ethics that governs a number of potential conflicts of interest HTS has when providing HTS’s advisory services to the Client. HTS’s Code of Ethics is designed to ensure that HTS meets the fiduciary obligations to the Client and to foster a culture of compliance throughout HTS. HTS’s Code of Ethics is comprehensive and is designed to help HTS detect and prevent violations of securities laws and to help ensure that HTS keeps the Clients’ interests first at all times. HTS distributes the Code of Ethics to each supervised person at HTS at the time of their initial affiliation with HTS; HTS makes sure it remains available to each supervised person for as long as they remain associated with HTS; and HTS ensures that updates to the Code of Ethics are communicated to each supervised person as changes are made. HTS’s Code of Ethics asserts that all supervised persons have a fiduciary responsibility to Clients, and they must always adhere to federal securities laws. The Code also covers Client confidentiality, gifts, undue influence in personal securities transactions and use of Client or company assets to benefit one personally. Additionally, the Code mandates monitoring, review, reporting and sanctions for 63 | P a g e  violations of the Code of Ethics. HTS will provide a copy of the Code of Ethics to any Client or prospective Client upon request. Personal Trading HTS and its officers, directors, employees, and affiliates can buy or sell securities for themselves that they also recommend to Clients. HTS receives duplicate confirmations for all trades conducted by HTS personnel and reviews them for potential conflicts of interests. Participation or Interest in Client Transactions & Principal Trades HTS, as a broker-dealer, can act as an agent or, where permitted by law, or principal (including instances wherein HTS is an underwriter or selling group member). Even though HTS is permitted by contract or by law to do so, as a matter of policy, HTS generally does not execute principal trades or agency cross transactions in the advisory Programs. Although in some instances, HTS can provide a more favorable market price to the Client if HTS participates in principal trade or an agency cross transaction with Client accounts, HTS does so only when consistent with HTS’s obligations to seek best execution, due to regulatory requirements, when executing such transactions. Therefore, the Client will not have access to new issues or syndicate offerings in these accounts. The Client may make such purchases in a retail brokerage account, and they should be aware that they will be subject to the customary fees and compensations charged in such accounts. HTSPM from time to time will purchase new issue bonds but only in the secondary market and not a part of the IPO in the primary market with no mark-up or commission. In case-by-case exceptions, in which HTS enters into principal trades or agency cross transactions, HTS will provide specific disclosures and obtain the Client’s consent. HTS relies on codes and restrictions in the systems as well as additional software to prevent non-permissible principal trades. In some instances, HTS does not act as an investment advisor (according to Section 206(3) of the Investment Adviser Act of 1940) with respect to an advisory Program transaction if the transaction is directed to HTS by a nonrelated Investment Manager, to whom the Client has granted discretionary trading authority and HTS does not recommend, select or play a role, direct or indirect, in the Investment Manager’s selection of particular securities to be purchased for, or on behalf of, Program Clients. HTS has implemented systems and procedures that are designed to comply with the policy stated above and to monitor related activities. HTS has the discretion to effect cross-transactions between Client accounts, where one Client purchases a security held by another Client. Neither HTS nor any related party receives any compensation in connection with a cross-transaction. HTS effects these transactions only when HTS determines that the transaction to be in best interests of both Clients and at prices, HTS has determined to reflect their value. The Client should understand that, to the extent permitted by applicable law, HTS can in transactions involving the Clients securities, act as agent while also representing another Client of HTS on the other side of the transaction ("Agency Cross-Transaction") provided, however, that no such Agency Cross-Transaction will be affected for the Program Accounts of any ERISA Plan or an individual retirement account. If the transaction is an Agency Cross-Transaction, in which HTS acts as the broker or agent by purchasing or selling securities from or to one of HTS’s brokerage customers, HTS obtains the Client’s written consent and will provide them with a written confirmation at or before the completion of the transaction. The confirmation will describe the nature of the transaction, plus information about its date and time, and the remuneration that the Investment Adviser or another person received as a result. At least annually, HTS will provide the Client with a written disclosure statement identifying the total number of such Agency Cross-Transactions for their account during the period, and the total amount of all commissions or other remuneration HTS received or will receive in connection with these transactions, if any. HTS generally will not affect Agency Cross-Transactions between Clients if HTS has recommended the security to both Clients. Such Agency Cross-Transactions have a potential of conflicting division of loyalty and responsibility regarding both parties to the Agency Cross-Transaction. Such transactions are generally limited brokerage (non-advisory) Clients only unless specific consent by the Client has been granted to the transaction in accordance with regulatory requirements. HTS sometimes has a financial interest in securities or investment products that HTS’s IARs recommend to advisory Clients. In certain cases, the products may only be used with restrictions within the advisory Programs. Principal trades and Agency Cross-Transactions are also subject to additional restrictions, procedures and controls that are in place for the securities transactions in advisory accounts. HTS will seek to obtain the best execution for each of 64 | P a g e  HTS’s advisory Clients. As a matter of HTS policy, HTSPM will not engage in Principal or Cross transactions. Custody Generally, HTS will maintain custody of assets in the Client’s account. When HTS acts as custodian, the Client will be provided an account statement in any month in which there is trading or other activity in the account, or if there is no trading activity, not less than on a quarterly basis. HTS also provides trade confirmations when securities transactions take place. The Insurance Carrier will be the custodian of assets in the Destination Program account. The Insurance Carrier will provide the Client with account statements and confirmations of transactions. Per SEC Rule 206(4)-2, HTS has implemented a set of controls designed to protect those Client assets from being lost, misused, misappropriated or subject to the Advisers’ financial reverses in an effort to ensure that Client assets are protected. Among other things, HTS undergoes a separate examination by an independent auditor, the purpose of which is to obtain the auditor’s report on our internal controls designed to safeguard Clients’ assets held at HTS. HTS also undergoes an annual surprise audit by an independent registered accounting firm that is designed to verify the Clients’ assets. At the conclusion of the annual surprise audit, the independent auditor files a report with the SEC attesting to, among other things, our compliance with regulatory requirements. For those third parties that HTS uses for certain may also serve as qualified custodians of our client assets. In such cases, consistent with applicable regulations, HTS receives a report issued by an independent registered public accountant relating to the third parties’ internal controls in connection with its custody services. Investment Policy Statements HTS or its Adviser’s will not monitor for compliance nor approve investment policy statements when provided in association with an account in one or more of the listed Advisory Programs described in this brochure. HTS does not provide Investment Policy Statements. HTS will not be responsible for the ongoing monitoring of the Clients investment policy statement and the assets allocation detailed within the statement. This is the responsibility of the Client, and the Client should consult with the legal and tax advisors for matters regarding the investment policy statement. Financial Information HTS has not been the subject of a bankruptcy petition at any time in its existence. Under no circumstances will HTS debit fees more than six months in advance of services rendered. 65 | P a g e