The Firm The Firm is registered with the SEC as an investment adviser. As an investment adviser, VFA provides to its clients the investment advisory products and services described in this Wrap Brochure, and certain other advisory programs described in other Firm brochures. This Wrap Brochure describes the services, fees and other necessary information you should consider prior to enrolling in MIP. The Firm also offers Financial Planning and Consulting Services available on either a one-time or a subscription basis, and three other wrap fee programs: the MIP Unified Management Account Program (“MIP UMA”), the Guided Portfolio Services Program (“GPS”), and the Guided Portfolio Advantage Program (“GPA”). You can obtain a brochure for the Firm’s other advisory programs free of charge at www.corebridgefinancial.com/rs/prospectus-and-reports/vfa-form-adv-materials or by contacting us at 866-544-4968.
The Firm is also a broker-dealer and is a member firm of FINRA. As a broker-dealer, the Firm separately makes available securities such as stocks and bonds, mutual funds, exchange-traded funds (“ETFs”), variable annuity and variable life insurance products, and municipal securities. All IARs are also engaged in the Firm’s brokerage business and are registered with the Firm as registered representatives. Broker-dealer services are not covered by this Wrap Brochure, are not part of our advisory relationship with you, and are not subject to regulation under the Investment Advisers Act of 1940 (the “Advisers Act”).
VFA was incorporated in Texas in 1996 and is headquartered in Houston, Texas with additional branches throughout the United States. VFA is a wholly owned subsidiary of VALIC doing business under the Corebridge Financial brand name, and an indirect subsidiary of Corebridge Financial, Inc. (“Corebridge Financial”). Corebridge Financial is a publicly-traded company and one of the largest providers of retirement solutions and insurance products in the United States. As of the date of this Brochure, American International Group, Inc. (“AIG”) continues to hold a controlling ownership of Corebridge Financial. As of December 31, 2023, VFA managed approximately $25.2 billion on a discretionary basis.
The Managed Investment Program MIP is a wrap advisory program offered by the Firm, as program sponsor. The Firm has contracted with Envestnet, a provider of wealth management software and services (and which is not affiliated with the Firm), to provide the operational and system support for MIP. The Firm has selected third party investment managers, “Strategists” or for the Selected MIA Portfolios, “Separate Account Managers. The Strategists and the Separate Account Managers, as applicable, provide services in MIP and that are responsible for the design and management of the MIP portfolio models described below. The Strategists include: BlackRock Investment Management (“BlackRock”); Envestnet PMC, a division of Envestnet Portfolio Solutions, Inc. (“Envestnet PMC”); Russell Investment Management, LLC (“Russell Investments”); SSGA Funds Management, Inc. d/b/a State Street Global Advisors (“SSGA”); and The Vanguard Group (“Vanguard”). Envestnet PMC is an indirect, wholly owned subsidiary of Envestnet. The Strategists are responsible for the following MIP portfolio models: BlackRock
• BlackRock Target Allocation ETF Portfolios
• BlackRock Target Allocation ESG ETF Portfolios
• BlackRock Target Allocation Tax-Aware ETF Portfolios Envestnet PMC
• Managed Investor Account Portfolios
• Index Plus Managed Investor Account Portfolios – (Effective November 22, 2022 these portfolios are no longer offered to new clients or accounts, but existing accounts can continue to accept additional investments)
• PMC ActivePassive Portfolios (Effective on or about November 20, 2023 these portfolios are no longer offered to new clients or accounts)
• ActivePassive PMC ETF Portfolios
• American Funds PMC Active Core Portfolios
• American Funds PMC Active Income Portfolios
• Franklin Templeton PMC ActivePassive Portfolios
• Retirement Income Planning Portfolios (Effective November 22, 2022 these portfolios are no longer offered to new clients or accounts, but existing accounts can continue to accept additional investments)
• Integrated Managed Investor Account Portfolios (Effective May 1, 2021 these portfolios are no longer offered to new clients or accounts, but existing accounts can continue to accept additional investments)
• Managed Investor Account California Residents Only Portfolios VC 23987 (3/2024 1.0 ) 5 MIP Brochure
• PMC Passive Foundation Portfolios
• PMC Sustainable Foundation Portfolios
• Selected Manager Investor Account Portfolios Russell Investments
• Russell Core Portfolios
• Russell Tax-Managed Portfolios State Street Global Advisors
• State Street Active Asset Allocation ETF Portfolios Vanguard
• Vanguard ETF Strategic Model Portfolios Some of the Portfolios listed above offer tax-advantaged trading and/or investment strategies; tax-advantaged trading strategies are appropriate for taxable, or non-qualified accounts. More information about these, and the other Portfolios offered in MIP, is available below. The Firm’s IARs must meet certain licensing and/or registration requirements to offer certain programs. Your IAR can confirm with you their eligibility regarding the programs s/he can recommend for you. VFA and Envestnet each have separate responsibilities for the ongoing management of your MIP account, and the Strategists and Separate Account Managers create and maintain their respective MIP portfolios as further described below. In connection with this arrangement, your IAR will provide assistance in determining your asset allocation and the selection of your MIP portfolio option(s) (described below). Your asset allocation will be based upon your responses within an investor profile questionnaire (the “Client Profile Questionnaire”), which includes factors such as risk tolerance, goals, investments objectives and time horizon. Your portfolio will be assigned an asset allocation ranging from very conservative to very aggressive with several allocations in between. More information is provided in Item 4 – Account Management of this Brochure.
After completing the Client Profile Questionnaire, your IAR will help you complete an additional questionnaire designed to determine your investment focus, which may include traditional asset allocation, cost sensitivity, and socially and environmentally responsible investing, among other factors. Note that, if your IAR recommends the Selected Managed Investor Account Portfolio, described below, you will not complete the second questionnaire. Based on your responses in the second questionnaire, your IAR will recommend one or more MIP portfolios that best meet your needs. Your IAR will present the proposed allocation to one or more MIP Portfolios for your review and approval. Once you approve the proposal it will be implemented by Envestnet. Both Envestnet, and Separate Account Managers, will manage your account for conformance to the allocation of investment options within your portfolio and based on the manager’s discretionary authority, rebalance your account periodically. As your needs change or market conditions warrant, you have the flexibility to revisit your investor profile and complete a new Client Profile Questionnaire to determine whether you are appropriately invested. Minimum account balances for the model portfolios are noted in the descriptions below. Where applicable, the annual minimum account balance fee is also noted (see also description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure). For additional information on the Strategist or Separate Account Manager, please refer to their Form ADV Part 2A Brochure. (1) PMC Passive Foundation Portfolios (“Passive Foundation Portfolios”) – Initial minimum account balance is $5,000. The portfolios are focused on low-cost investing using passively-managed index mutual funds. Envestnet will assess an annual minimum account fee of $10 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure). (2) PMC Sustainable Foundation Portfolios (“Sustainable Foundation Portfolios”) – Initial minimum account balance is $5,000. The portfolios consist of mutual funds and is designed for investors with environmental, social and governance (“ESG”) priorities. Envestnet will assess an annual minimum account fee of $10 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure).
(3) American Funds PMC Active Core Portfolios (“American Funds PMC Active Core Portfolios”) – Initial minimum account balance is $10,000. These portfolios emphasize American Funds and can include mutual funds from other fund families. (4) American Funds PMC Active Income Portfolios (“American Funds PMC Active Income Portfolios”) – Initial minimum account balance is $10,000. These portfolios emphasize American Funds, and can include mutual funds from other fund families.
(5) BlackRock Target Allocation ETF Portfolios (“BlackRock Target Allocation ETF Portfolios”) – Initial minimum account balance is $10,000. The portfolios consist of exclusively of iShares ETFs, which are managed by a Blackrock affiliate. Envestnet will assess an annual minimum account fee of $50 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure).
VC 23987 (3/2024 1.0 ) 6 MIP Brochure (6) Vanguard ETF Strategic Model Portfolios (“Vanguard Portfolios”) – Initial minimum account balance is $10,000. The Vanguard Portfolio is comprised exclusively of Vanguard ETFs designed to offer broadly diversified, low-cost index exposure. Envestnet will assess an annual minimum account fee of $50 (see description of Minimum MIP Account Fee e in the “Fees and Other Charges” section of this Brochure).
(7) Franklin Templeton PMC ActivePassive Portfolios (“Franklin Templeton PMC ActivePassive Portfolios”) – Initial minimum account balance is $10,000. These portfolios emphasize Franklin Templeton Funds and can include mutual funds from other fund families.
(8) Russell Core Portfolios (“Russell Core Portfolios”) – Initial minimum account balance is $25,000. The portfolios consist exclusively of mutual funds advised by Russell Investments. Envestnet will assess an annual minimum account fee of $50 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure).
(9) Russell Tax-Managed Portfolios (“Russell Tax-Managed Portfolios”) – Initial minimum account balance is $25,000. The portfolios consist exclusively of mutual funds advised by Russell Investments and the strategy seeks to maximize after-tax return for taxable assets. Envestnet will assess an annual minimum account fee of $50 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure). These portfolios’ tax efficient strategies are appropriate for non-qualified accounts.
(10) BlackRock Target Allocation Tax-Aware ETF Portfolios (“BlackRock Target Allocation Tax-Aware ETF Portfolios”) – Initial minimum account balance is $25,000. The portfolios consist of exclusively of iShares ETFs, which are managed by a Blackrock affiliate, BlackRock Fund Advisers (“BFA”). Investments in these portfolios are focused on improving the tax efficiency of investment gains and losses by seeking lower trading frequency and model portfolio turnover, higher municipal bond exposure, and avoiding short-term capital gains. Envestnet will assess an annual minimum account fee of $50 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure). These portfolios’ tax efficient strategies are appropriate for non-qualified accounts.
(11) BlackRock Target Allocation ESG ETF Portfolios (“BlackRock Target Allocation ESG ETF Portfolios”) – Initial minimum account balance is $25,000. The portfolios consist of investments exclusively in ESG-focused iShares ETFs which are managed by BFA. BlackRock Target Allocation ESG Portfolio invests in ESG (or Environmental Social and Governance) focused ETFs, which means investments are based on the sustainability and ethical impact of an investment in a business or company. Accordingly, the portfolios intend to screen out, and may forego potentially profitable investment opportunities in, particular companies and industries pursuant to criteria established by BlackRock. There is no guarantee that this ESG objective will be achieved, and such assessment is at BlackRock’s discretion. Envestnet will assess an annual minimum account fee of $50 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure).
(12) PMC ActivePassive Portfolios (“ActivePassive Portfolios”) – Initial minimum account balance is $25,000. The portfolios consist of actively-managed mutual funds primarily within the PMC Fund family and passively-managed mutual funds managed by unaffiliated third parties. The actively-managed funds are managed by Envestnet, an affiliate of Envestnet and Envestnet PMC. Effective on or about November 20, 2023 these portfolios are no longer offered to new clients or accounts.
(13) ActivePassive PMC ETF Portfolios (“ActivePassive ETF Portfolios”)- Initial minimum account balance is $25,000. The portfolios primarily consist of investments in ActivePassive™ ETFs, which are proprietary ETFs managed by Envestnet, and/or ETFs managed by unaffiliated third parties. (14) SSGA State Street Active Asset Allocation ETF Portfolios (“State Street Active Asset Allocation ETF Portfolios”) – Initial minimum account balance is $25,000. The portfolios primarily consist of investments in SPDR ETFs, which are managed by a State Street Global Advisors affiliate, SSGA Funds Management, Inc. Envestnet will assess an annual minimum account fee of $50 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure).
(15) Managed Investor Account Portfolios (“MIA Portfolios”) – Initial minimum account balance is $50,000. The MIA Portfolio Strategist is Envestnet PMC. The portfolios consist of actively-managed mutual funds.
(16) Managed Investor Account Portfolios - California Residents Only (“MIA California Residents Portfolios”) – Initial minimum account balance is $50,000. The Strategist for the California Residents Portfolio is Envestnet PMC. The portfolios consist of mutual funds and are designed for tax-sensitive California residents. (17) Index Plus Managed Investor Account Portfolios (“Index Plus Portfolios”) – Initial minimum account balance is $50,000. While similar to the MIA Portfolio, these portfolios consist of a combination of actively-managed mutual funds and passively-managed index mutual funds that are substituted for actively-managed funds in certain asset classes. Effective November 22, 2022 these portfolios no longer accept new accounts; existing accounts may continue to make additional investments. VC 23987 (3/2024 1.0 ) 7 MIP Brochure (18) Retirement Income Planning Portfolios (“Retirement Income Planning Portfolios”) – Initial minimum account balance is $50,000. The portfolios consist of mutual funds and are designed to address the income needs of investors with portfolios structured for yield in addition to total return and are designed for clients in the distribution phase of the retirement life cycle. Effective November 22, 2022 these portfolios no longer accept new accounts; existing accounts may continue to make additional investments. (19) Selected Manager Investor Account Portfolios (“Selected MIA Portfolios”) – Initial minimum account balance starts at $100,000; some Envestnet separately managed account manager minimums may be higher than $100,000. The Selected MIA Portfolio offers management by institutional investment managers, called Separate Account Managers which manage the MIP account. These Portfolios allow advisory clients a higher level of specialization and service through ownership of individual securities. Based on your responses to the Client Profile Questionnaire, your IAR will recommend a Separate Account Manager from a list of managers for which Envestnet PMC has conducted on-boarding due diligence and approved. The list of Separate Account Managers available within the Selected MIA Portfolio is maintained and reviewed periodically by Envestnet PMC. Envestnet PMC uses an “Approved-Qualitative” due diligence process for all managers available within the program; more information on Envestnet PMC’s due diligence process is available in Envestnet’s Part 2A Brochure available at www.adviserinfo.sec.gov. Envestnet will assess an annual minimum account fee of $100 (see description of Minimum MIP Account Fee in the “Fees and Other Charges” section of this Brochure).
(20) Integrated Managed Investor Account Portfolios (“Integrated MIA Portfolios”) – Initial minimum account balance is $250,000. The portfolios consist of a combination of mutual funds, ETFs, and separately managed accounts within a single account. Envestnet PMC acts as an overlay manager to efficiently monitor and implement custom investment solutions for the portfolios. Overlay manager activities include managing cash flow activities, rebalancing the portfolios, accommodating portfolio restrictions, tax loss harvesting, managing wash sales, and monitoring short and long-term gains. Effective May 1, 2021 these portfolios no longer accept new accounts; existing accounts may continue to make additional investments. How MIP is Designed If you are interested in establishing an MIP account, an IAR will meet with you to review your current financial situation, risk tolerance, and investment goals. Utilizing the Client Profile Questionnaire, your IAR will collect information about you in order to create an investor profile of your financial and investment situation, taking into account your current investments, assets, net worth, income, investment objectives, tax sensitivity, time horizon, risk tolerance, and other needs you may have. Should any of your information change, you should contact your IAR; an IAR is available to answer any questions and to help implement any changes you want to make based on changes in personal or financial circumstances, or the financial markets. You will also need to complete and sign the following forms before your account may be established: the Statement of Investment Selection (“SIS”), New Account Application, Investment Proposal Analysis document where applicable, and the Account Transfer Application (if you have assets to be transferred from another company). Account Management Envestnet PMC portfolio management team acts as an “overlay manager” to monitor and coordinate the recommendations and trading activities. This team actively manages the portfolios for the designated asset allocation in accordance with the portfolios’ allocation strategy. The overlay manager delivers operating efficiencies and coordinates all trading activity and investment decisions.
Other overlay manager activities include rebalancing and, where applicable and upon request, tax loss harvesting and accommodating portfolio restrictions. Envestnet PMC and the Strategists are responsible for ensuring the tools and analyses are operating properly and consistent with your investment profile. Certain Separate Account Managers coordinate their own trading activities. Diversification, asset allocation and rebalancing strategies do not ensure a profit or guarantee against a loss.
Account Rebalancing. In general, the Firm relies on the third-party investment managers to reallocate and rebalance portfolios within clients’ accounts. In addition to manager-directed rebalancing, Envestnet offers optional rebalancing services for clients’ accounts based on clients’ respective instructions and implements investment recommendations and places trades based on those client provided rebalancing instructions. These instructions can include no rebalancing of your account, or to rebalance your account on an annual, semi-annual, or quarterly basis.
To implement the optional rebalancing service, you will work with your IAR to deliver rebalance instructions via an updated SIS which is provided to Envestnet so that the allocation of portfolio assets in your account remains consistent with your instructions. Envestnet will rebalance your account upon the instructions you provide to your IAR and as outlined in the updated SIS.
A rebalance within an account typically generates trades, unless at the time of rebalance review the positions in the account are within the allocation guidelines of the model portfolio. Note that, in between rebalancing dates, the percentage of each asset class in your account, and thus the risk profile of the account, may drift, or increase, over time because of market fluctuation. When working with your IAR to provide rebalance instructions, you should also consider that reallocation of portfolios and rebalancing within a non-qualified Program VC 23987 (3/2024 1.0 ) 8 MIP Brochure Accounts will often result in tax consequences for your account. You should discuss with your IAR whether you want to establish a rebalancing schedule for your account (or instruct that there is no rebalancing).
Fees and Other Charges The fees you will pay for your account(s) are based on the Program Fee and are described below. Your Fee Schedule, which is included in the Statement of Investment Selection that you receive at account opening, provides information about the fees you will pay. Additionally, your quarterly performance reports include information about the Program Fee you pay. The Program Fee for your account covers the provision of initial and ongoing investment services and the execution of most securities transactions. The Program Fee consists of the sum of: Advisory Fee - This fee is the amount paid to VFA for advisory services; and Platform Fee - This fee is for the other fixed and variable costs of your MIP portfolio as described further below. It includes the fees and costs for services provided by, as applicable, VFA, Envestnet, the Strategists, and National Financial Services LLC (“NFS”) for your MIP Portfolio. The Platform Fee includes the following fees and expenses: • Management Fee. This portion of the Platform Fee is for the management fees that are retained by Envestnet in connection with the MIP platform. This fee includes any management fees paid to the Strategists and Separate Account Managers.
• Sponsor/Firm Fee. This portion of the Platform Fee is paid to the Firm to cover direct costs such as overhead related to the MIP platform, and variable costs such as trading, confirmations, and statements. Any fees in excess of these variable costs are retained by VFA.
• Clearing Firm/IRA Custodial and Related Fees. NFS is the clearing firm for MIP accounts, meaning that all trades are placed through NFS, and it is also the custodian of your MIP account. As explained below, a portion of the Platform Fee is paid to NFS for its services provided in connection with your MIP account, including NFS’ trading costs. Any amounts in excess of these costs will be retained by the Firm. While the Platform Fee includes custodial services for most accounts, NFS will separately charge an annual IRA custodial fee for services rendered as trustee of your IRA account, as discussed below.
The Firm is responsible for paying NFS for any transaction fees associated with the purchase or sale of mutual funds in your account. However, almost all mutual funds available through NFS are available on the NFS platform as “no transaction fee” mutual funds, which means there is no ticket charge or other fee associated with the purchase and sale of such funds (“NTF Funds”). NFS currently has arranged for the NTF Funds to be free of clearing charges. MIP mutual fund portfolios primarily use NTF Funds, which substantially reduces execution costs paid by VFA; this list of NTF Funds is subject to change by NFS. VFA benefits by saving the transaction fee whenever an NTF Fund is used in a portfolio. Minimum MIP Account Fee. For certain MIP portfolios, Envestnet evaluates quarterly whether it has received a minimum amount of revenue from its management/administration fee charged on your account. If the annualized fee for such services, which is calculated based on your average daily balance for the quarter, is less than the minimum amount listed in the MIP portfolio descriptions contained in this Wrap Brochure, Envestnet will assess a fee equal to one quarter of the annual minimum account fee based on the number of days in the quarter during the fee billing process. Minimum accounts fees are expressed in annual amounts, but are determined and, when applicable, assessed based on your account asset value each quarter. For example, if your account has a $100 minimum annual account Program Fee, it will be assessed a minimum of $25 every quarter. Accordingly, if your account has large asset inflows or outflows during the year, it is possible for an account to be assessed a minimum fee for the particular quarter when your account balance was below the minimum asset value threshold, even if at the end of the year a look back over the account’s average balance for the entire year would have placed it above the minimum asset value threshold. Contact your IAR for more information about applicable minimum MIP account fees for your portfolio(s).
Your Program Fee is unaffected by the actual amount of trading costs paid by the Firm. The Program Fee does not include the following costs/fees: • IRA Custodial Fees. If your MIP account is established as an IRA, you will pay NFS an annual custodial fee of up to $35. This fee will be reflected separately on your account statement and applies to all MIP portfolios. The Firm may elect to pay the IRA custodial fees to NFS directly, in which case you will not pay this fee.
• Mark-ups/Markdowns. If your MIP account purchases or sells fixed-income securities, you will pay for mark-ups or markdowns on transactions. These fees are reflected in the price of the security purchased.
• Mutual Fund and ETF Fees and Expenses. As a shareholder of mutual funds and/or ETFs, you pay the internal fees and expenses of the mutual funds and ETFs held in your MIP account. The prospectuses for the respective mutual funds and/or ETFs include more information about these fees and expenses.
VC 23987 (3/2024 1.0 ) 9 MIP Brochure The table below sets forth the estimated Program Fee schedule for accounts established on or after January 29, 2018. Your actual Program Fee is provided in your SIS, which is provided to you for review and approval at the time of your enrollment in the program. For account proposals generated prior to January 29, 2018, the Advisory Fee will vary between MIP accounts based on the Program Fee that was negotiated on your account as shown below. For account proposals generated on or after January 29, 2018, but before January 1, 2019, the Advisory Fee is a tiered fee beginning at 0.95% for all MIP portfolios. For account proposals

generated on or after January 1, 2019, the Advisory Fee is a tiered fee beginning at 0.90% for all MIP portfolios. The Advisory Fee is assessed quarterly and is based on your average daily balance in your MIP account during the quarter as noted in more detail below in the section “Calculation and Deduction of the Program Fee”. The Firm may negotiate a lower Advisory Fee and/ or Platform Fee. If the Firm negotiates a lower Advisory Fee and/or Platform Fee, your Program Fee will be lower than the fees outlined in the schedules below and VFA will receive less compensation. Separately, VFA offers Advisory Fee discounts to our current employees, current employees of our affiliates, and their household family members who invest in MIP account(s). Your Fee Schedule, which is included in the SIS that you receive. provides information about the fees you will pay. Additionally, your quarterly performance reports include information about the Program Fee you pay.
Standard Program Fee Schedule PortfoliosAssets Under ManagementProgram Fee MIA Portfolios Index Plus Effective November 22, 2022, these Portfolios no longer accept new accounts; existing accounts may continue to invest. Retirement Income Planning Portfolios Effective November 22, 2022, these Portfolios no longer accept new accounts; existing accounts may continue to invest. MIA California Residents Portfolios First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Over $5,000,000 1.25% 1.03% 0.90% 0.77% 0.67% 0.57% American Funds PMC Active Core Portfolios American Funds PMC Active Income Portfolios Franklin Templeton PMC ActivePassive Portfolios First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Over $5,000,000 1.25% 1.04% 0.94% 0.84% 0.74% 0.64% ActivePassive Portfolios Effective on or about November 20, 2023 these portfolios are no longer offered to new clients or accounts. ActivePassive ETF Portfolios First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Over $5,000,000 1.10% 0.89% 0.79% 0.69% 0.59% 0.49% Passive Foundation PortfoliosFirst $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Over $5,000,000 1.18% 0.97% 0.87% 0.77% 0.67% 0.57% VC 23987 (3/2024 1.0 ) 10 MIP Brochure Standard Program Fee Schedule PortfoliosAssets Under ManagementProgram Fee Sustainable Foundation Portfolios First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Over $5,000,000 1.20% 0.99% 0.89% 0.79% 0.69% 0.59% Integrated MIA Portfolios Effective May 1, 2021, these Portfolios no longer accept new accounts; existing accounts may continue to invest. First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Over $5,000,000 1.83% 1.49% 1.27% 1.13% 0.96% 0.82% Selected MIA Portfolios*First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Next $5,000,000 Next $15,000,000 Over $25,000,000 2.03% 1.69% 1.57% 1.46% 1.35% 1.24% 1.22% 1.20% Vanguard PortfoliosFirst $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Next $5,000,000 Next $15,000,000 Over $25,000,000 1.20% 0.99% 0.89% 0.79% 0.69% 0.59% 0.57% 0.55% Russell Core Portfolios Russell Tax-Managed Portfolios First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Next $5,000,000 Next $15,000,000 Over $25,000,000 1.20% 0.99% 0.89% 0.79% 0.69% 0.59% 0.57% 0.55% BlackRock Portfolios: BlackRock Target Allocation ETF Portfolios BlackRock Target Allocation ESG ETF Portfolios BlackRock Target Allocation Tax-Aware ETF Portfolios First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Next $5,000,000 Next $15,000,000 Over $25,000,000 1.20% 0.99% 0.89% 0.79% 0.69% 0.59% 0.57% 0.55% VC 23987 (3/2024 1.0 ) 11 MIP Brochure Standard Program Fee Schedule PortfoliosAssets Under ManagementProgram Fee State Street Global Advisors Portfolios: State Street Active Asset Allocation ETF Portfolios First $250,000 Next $250,000 Next $500,000 Next $1,000,000 Next $3,000,000 Next $5,000,000 Next $15,000,000 Over $25,000,000 1.20% 0.99% 0.89% 0.79% 0.69% 0.59% 0.57% 0.55% * With respect to the Selected MIA Portfolios, the Program Fee may be more or less than the fee stated above based on the management fees charged by the Separate Account Manager selected for your account. A management fee of 60 bps is included within the Platform Fee as described in the table above. The management fee currently ranges from 0.08% to 0.60%. The Program Fee shown in your SIS is the total of your Advisory Fee and the Platform Fee. The Standard Program Fees in the table above are based on the estimated fees and expenses you would pay based on the Assets Under Management. For accounts subject to a minimum account fee this will result in a higher Program Fee rate. The Firm may terminate an account, or transfer an account balance to brokerage, if it does not meet a Portfolio’s applicable account balance minimum. More information about minimum account balances is provided above and information about the termination of advisory accounts can be found in Item 4 of this Brochure (“Termination of the Advisory Relationship”). Program Fees may be more or less costly to you than paying for the services separately, depending upon the investment advisory fees charged, the type of account, the amount of assets in the account, time and services provided, the number of transactions for the account, the amount of clearing and execution fees charged by NFS (which varies by type of security traded), and the level of brokerage commissions and other fees that would be payable if you obtained the services available under the program individually. Calculation and Deduction of the Program Fee. Calculation of the Program Fee begins once your account is approved on Envestnet’s system, which occurs after you complete your enrollment in your MIP account and assets are received in your account (refer to Item 4 in this Brochure on program minimums). The Program Fee is a tiered fee that is calculated quarterly, in arrears, based on the average daily balance of your MIP account during the quarter and the number of days in the quarter. At the end of a quarter, Envestnet calculates the Program Fee by multiplying the average daily balance by your advisory fee schedule. The average daily balance of your MIP account for fee calculation purposes will include all assets in your MIP account, including uninvested cash. After calculating the Program Fee, Envestnet instructs NFS to deduct the fee from your account. NFS deducts your Program Fee following the end of the quarter. If your MIP account is managed for only a portion of a quarter, the Program Fee will be pro-rated accordingly based on the average daily balance during that portion of the quarter and, in the event of a termination, the fee will be deducted before your account balance is distributed. Distribution of your account balance, less applicable fees paid, occurs promptly after notice of termination. If cash or cash equivalent funds in your account are not sufficient to pay any fees charged on your account, investments in your account will be liquidated in order to pay the outstanding fees.
If you decide to change your investment in your current MIP account by signing a new SIS during a quarter, the amount of the Program Fee will be adjusted to reflect the new MIP account fee schedule and will be pro-rated based on the average daily balance during that portion of the quarter following the change to the MIP account. Depending on which new MIP portfolio model you choose, your Program Fee may increase or decrease. Is an MIP Account for You? The MIP account bundles together several service providers - an investment adviser, a technology platform service provider, a broker-dealer, a clearing firm and a custodian - and offers most of these services for a single Program Fee. Some clients prefer having the various services “packaged” together; others prefer to select their own providers for the various services needed to manage their investment portfolios. Similarly, some clients prefer a fee structure that converts trading costs into an asset-based fee calculated on the same basis as advisory fees; others prefer trading costs to be assessed on a per trade basis. Depending on a number of factors, such as the number, size and nature of the securities transaction in an advisory account, the overall fees and charges borne by the client over time could be more or less than what these fees and charges would be if the same services were provided on a separate basis. For specific questions regarding your relative costs, please contact your IAR.
Combining of Account Values for Fee Calculations. If you or your family members have more than one MIP account, you can lower your Program Fees based on the cumulative assets that you maintain in your MIP account(s). “Family member” for purposes of combining account values in MIP includes your spouse, domestic partner, and your dependent children. Combined account arrangements established prior to January 1, 2019 that otherwise do not meet these criteria will continue to be honored. You are responsible for contacting your IAR or the Firm VC 23987 (3/2024 1.0 ) 12 MIP Brochure to request your accounts be combined for fee calculation purposes. Discuss with your IAR if you have multiple MIP accounts and whether they are eligible for lowered Program Fees.
For combined accounts one account will be designated as the “Primary Account” and the owner of the Primary Account will receive Envestnet quarterly reports that contain information about each of the combined accounts, including account balances, transactions, and holdings. Each MIP account owner in the billing group will continue to receive his/her NFS quarterly account statement. Your IAR can assist you with identifying MIP accounts eligible for combining accounts for fee calculation purposes. Please contact your IAR or the Firm to request your accounts be combined for fee calculation purposes. Additionally, the Firm does not combine for fee calculation purposes a client’s MIP accounts with other accounts enrolled in the Firm’s other three wrap fee programs, the GPS Program, the GPA Program, MIP UMA, or other assets held at the Firm. Compensation and Conflicts of Interest. A portion of the Advisory Fee collected by the Firm is shared with your IAR for introducing and servicing your advisory account. For account proposals generated on or after January 29, 2018, but before January 1, 2019, the Advisory Fee is a tiered fee based on the average daily balance in your MIP account during the quarter and may be up to 0.95% per annum based on the value of assets in the account. For account proposals generated on or after January 1, 2019, the Advisory Fee is a tiered fee beginning at 0.90% for all MIP portfolios. For account proposals generated prior to January 29, 2018, the Advisory Fee will vary among MIP accounts based on the Program Fee on your account. If you have an existing MIP account that compensates the IAR more than he receives under the current structure for a new account, and you seek to make an additional deposit or open a new MIP account, your IAR has a financial incentive to recommend that you deposit the additional funds into your existing account rather than open a new account. The Firm manages this conflict through its Supervision process of reviewing transactions in clients’ accounts. As a registered representative of the Firm, your IAR is paid for the sale of products and services, including sales commissions for annuities and mutual funds, and ongoing fees for certain securities and advisory services. For example, your IAR receives a portion of the Advisory Fee you pay on your MIP account, which is an ongoing fee for the services provided under the program. Your IAR’s compensation will vary based on the products and services provided to you. Your IAR has a financial incentive for you to transfer your assets to a product or service, such as MIP, that would increase the IAR’s compensation over what he/she receives on an existing product or service. We manage the potential for this conflict of interest by maintaining policies and procedures designed to ensure that IARs make recommendations that are in the best interest of the investor in the context of the products and services offered by the Firm. Specifically, all recommendations to transfer assets from one product to another are reviewed by our Supervision department, the members of which do not receive any variable product-based compensation. Additionally, the Firm maintains programs for the review of these policies and procedures via compliance-related reviews and testing, and from time-to-time the Firm engages outside consultants to review, evaluate, and recommend changes to existing policies and procedures. The PD Freedom Advisor annuity (for accounts opened in 2019 and after), when offered in conjunction with the GPA Program, generates higher revenues for VFA and VALIC in the aggregate than does MIP. We mitigate this conflict of interest, which exists at the Firm level, by paying IARs, who are responsible for making recommendations to clients, the same amount irrespective of whether the client is invested through MIP or the GPA Program.
Mutual Fund Share Class Selection. As noted above, your mutual fund investment in an MIP account is subject to certain internal fees and expenses, such as advisory, administrative, custody and other fees and expenses charged by the fund, which shareholders bear on a pro rata basis. Mutual funds offer a variety of share classes, which hold the same portfolio securities but differ in total cost due to the imposition of various fees (such as 12b-1 fees, sub-transfer agency and shareholder services fees). A higher cost share class of a particular mutual fund will result in lower investment performance compared to a lower cost share class of the same fund. VFA does not typically use share classes that charge 12b-1 fees if there is a non-12b-1 share class available on the NFS platform. If NFS uses funds that charge a 12b-1 fee and such fee is received by NFS and is paid to VFA, any such fees will be rebated to clients. However, for all custom MIP Portfolios managed by Envestnet and solely distributed by VFA, VFA will use share classes that include sub-transfer agency and/or shareholder service fees, which compensate NFS for services it provides to such funds (“Eligible Share Classes”). VFA seeks to include in MIP portfolios the least costly Eligible Share Class available to MIP Portfolios. Note that there may be other less costly share classes offered by the fund that are either (i) not available on the NFS platform, (ii) are available on the NFS platform but are subject to a surcharge imposed by NFS to trade such share classes, or (iii) are not available for use in MIP portfolios due to constraints imposed by the fund. In such instances VFA is not able to offer these lower cost share classes in MIP portfolios. VFA monitors on a periodic basis for the launch and availability of lower cost Eligible Share Classes on the NFS platform and will seek to exchange investors into such Eligible Share Classes on a periodic basis following the availability of such lower cost Eligible Share Class(es).
For the following non-custom MIP Portfolios managed by Envestnet, the Firm is one of multiple investment advisers that offer the model portfolios to its clients: PMC ActivePassive Portfolios (note that these portfolios are not available to new accounts and will close on April 5, VC 23987 (3/2024 1.0 ) 13 MIP Brochure 2024), American Funds PMC Active Core and Active Income Portfolios, Franklin Templeton PMC ActivePassive Portfolios, PMC Passive Foundation Portfolios and PMC Sustainable Foundation Portfolios. Accordingly, VFA cannot dictate which share class is used for these Portfolios – that decision is made by Envestnet. This means that the same fund(s) used in the non-custom and custom portfolios can have different fees and expenses. For the Selected Manager Investor Account portfolios, the separately managed account investment managers are responsible for the model allocations to the underlying portfolios’ mutual funds. Accordingly, VFA cannot dictate which share class is used for these Portfolios – that decision is controlled by the underlying investment manager. As part of its periodic review process, VFA will work with its service providers, including Envestnet, to facilitate the exchange into a lower cost share class following the availability of such lower cost share class(es), but such decisions and timing are controlled by Envestnet or the underlying investment manager.
Trading Through Other Broker-Dealers. The Program Fee covers investment advice, portfolio management services and trade execution services placed through NFS only. Envestnet, Strategists and Separate Account Managers with discretionary authority over your account can execute trades through a broker-dealer other than NFS when they reasonably believe that another broker-dealer may effect trades at a price, including any commissions or dealer markup or markdown, that is more favorable to your account than would be the case if the Firm traded them through NFS. Even if the price is not more favorable, Envestnet, Strategist or Separate Account Manager(s) may “trade away” from NFS based on other relevant factors in selecting a broker-dealer, including execution capabilities, speed, efficiency, confidentiality, familiarity with potential buyers or sellers, and available inventory. If Envestnet, Strategist or the Separate Account Manager(s) effects trades through another broker-dealer, you typically will pay additional fees, including mark-ups or mark-downs and/or dealer spreads, to compensate that broker-dealer for its services, including a commission, commission equivalent, markup/markdown, order handling fees, or fees imposed by an execution provider, exchange or clearing corporation, or other fees mandated by law. Those fees are in addition to your Program Fee and will increase your overall cost to participate in MIP. It is expected that many of the equity (stock) trades will be executed by NFS. However, certain fixed income Separate Account Managers have historically directed most, if not all, of their trades to outside broker-dealers. These Separate Account Managers include, but are not limited to, those that offer municipal, corporate and convertible fixed income SMAs. If you transfer securities to fund your MIP account, Envestnet may use an outside broker-dealer to sell those securities that are fixed income, hard to value, illiquid, or thinly traded, or to sell other securities that NFS cannot sell. The fees described above will be charged to you. Envestnet, Strategist or the Separate Account Manager(s), as applicable, selects broker-dealers and is responsible for meeting its best execution obligations to the client. You should carefully review the Strategist, Separate Account Manager’s or Envestnet’s brochure to learn whether and when it uses broker-dealers other than NFS to effect any trades. You also should carefully review all trading for your MIP account to understand the frequency of trading through other broker-dealers and any additional trading costs that may be incurred. You should discuss these trades and any associated trading costs with your IAR.
Other Costs Associated with the Purchase and Sale of Investments in the MIP Portfolios. The BlackRock Target Allocation ETF Portfolios, Vanguard Portfolios, BlackRock Target Allocation ESG Portfolios, BlackRock Target Allocation Tax Aware Portfolios, Selected MIA Portfolios, State Street Active Asset Allocation ETF Portfolios, ActivePassive ETF Portfolios and the Integrated MIA Portfolios include ETFs as underlying investment options, and you should note that shares of an ETF trade on an exchange, and therefore, the value of such shares may differ from the value of the ETF’s underlying investments. ETFs may trade at a market price which reflects a “premium” or a “discount” to the net asset value (“NAV”) of their shares. If the market price is higher than the NAV, the ETF is said to be trading at a “premium”. If the price is lower, it is trading at a “discount”. Accordingly, ETFs may be purchased at prices that exceed the NAV of their underlying investments and may be sold at prices below such NAV. Under such circumstances the trading price of ETF shares sold at a discount may not mirror the NAV of the underlying investments of those ETF shares. Moreover, there are costs associated with purchasing and selling an ETF, called a “bid-ask” spread (the difference between what a buyer is willing to pay (bid) for an ETF and the seller’s offering (ask) price. All of these transaction costs (which do not apply to the purchase and sale of mutual funds) will adversely affect the performance of the MIP portfolios models that invest in ETFs.
Additionally, the MIP portfolios include underlying investment options which are proprietary to, or are affiliated with, the Strategists and/ or Separate Account Managers. This presents a conflict of interest in that the Strategists and/or Separate Account Managers for your MIP portfolio(s) may include proprietary and/or affiliated investment options which could result in higher fees or expenses for you, as well as additional revenue for the Strategists and/or Separate Account Managers. Neither the Firm nor your IAR select the underlying investment options for your MIP portfolios and accordingly are not compensated for investment options that have higher fees and/or expenses. More information about the fees and expenses for the underlying investment options in your MIP portfolio(s) is available in the Strategists and Separate Account Managers Part 2A Brochures, available at the SEC’s website at www.adviserinfo.sec.gov. Unique Considerations of Securities with a Focus on ESG Investing. Certain Portfolios may include or focus on allocations to securities with an ESG or “sustainable” investment orientation (including mutual funds or ETFs); for these Portfolios the Strategist or the Separate Account Manager selects investments or allocations to securities based on their view of the sustainability and ethical impact of an investment in a business or company. Mutual funds or ETFs whose names suggest a focus on ESG or “sustainable” investments and securities must VC 23987 (3/2024 1.0 ) 14 MIP Brochure invest at least 80% of their assets in that investment type which means that any Portfolios with investments in these types of funds will have a significant portion, if not all, of their assets invested accordingly. More information on the criteria they utilize to select or allocate investments within the mutual funds and/or ETFs is provided in the prospectuses for these mutual funds and ETFs. Accordingly, these types of investments screen out, and may forego certain potentially profitable investment opportunities in, specific companies and industries pursuant to the ESG and/or sustainability criteria established by the portfolio manager. If an underlying mutual fund or ETF in a Portfolio is focused on ESG and/or sustainability investing, it could result in lower performance results for such Portfolio compared to others that do not apply ESG and/or sustainability focused exclusionary screens to eliminate specific companies or industries. Also, not all investors agree in their views of what constitutes positive or negative ESG and/or sustainability characteristics and, as a result, a Portfolio may have an ESG and/or sustainability-focused investment selected by the portfolio managers for the mutual funds and/or ETFs, or for the Portfolios by the Strategist, which does not reflect the beliefs of any particular investor. The Strategists or the Separate Account Manager are responsible for the due diligence, screening, and monitoring of investments in these Portfolios based on their selected ESG and/or sustainability screening criteria.
Termination of the Advisory Relationship When you enroll in a MIP account, you sign an account application, an SIS that incorporates by reference an investment advisory agreement between the Firm and you (“Advisory Agreement”), and certain other forms and documents. At any time thereafter, both you and the Firm may terminate the Advisory Agreement for any reason. You may terminate your MIP account by providing written notice to VFA. Termination by VFA will be effective upon written notice as set forth in the Advisory Agreement, unless a later date is stated in the notice. Upon termination of any advisory relationship, VFA reserves the right to deduct any unpaid pro-rated Program Fee for the period from the end of the last calendar quarter through the date of termination. For more information about the deduction of unpaid fees, refer to “Calculation and Deduction of the Program Fee” in this Brochure.
When your MIP account is terminated, you assume sole responsibility for providing instructions as to the execution of transactions in your program account and you will no longer be charged the Program Fee. Additionally, you will be limited to one or more of the following transactions: (1) redeem or sell the existing securities in your MIP account and transfer the proceeds to the money market fund available in your MIP account, (2) transfer the securities held in your MIP account, in kind, to a non-advisory, retail brokerage account that you have established with VFA and carried by NFS as custodian (“VFA Retail Brokerage Account”) or to another broker/dealer, or (3) liquidate the securities in your MIP account and transfer the proceeds out of the account. Although you will no longer pay the Program Fee, certain fees and expenses will apply; the fees and expenses you pay after the termination of your MIP account depends on which option you choose. If you choose option 1, you will pay any fees and expenses charged by that money market fund as set forth in the fund’s prospectus. If you choose option 2, transferring assets out of your MIP account, whether cash, mutual funds, or individual securities in kind, to a new brokerage account may require that you complete a new account application, which will detail any fees you may be charged. If you choose to transfer or continue to hold securities in a VFA Retail Brokerage Account, you will pay certain fees to NFS, in addition to any fees and expenses associated with your investment(s). These fees include, for example, custodial fees, termination and/or transfer fees, transaction fees, and other account servicing fees. You may also pay fees to VFA in the form of commissions for securities trading in your VFA Retail Brokerage Account, 12b-1 fees, and/or mutual fund sales charges for any mutual funds you acquire in your VFA Brokerage Account. NFS may also have agreements with the mutual funds offered in your VFA Retail Brokerage Account, including revenue-sharing or similar compensation arrangements, and will pay some, or all, of this compensation to VFA as payment in all or part for recordkeeping or other shareholder-related services. More information about these fees is available in your NFS brokerage agreement, your fund prospectus(es), or by contacting your IAR. If you choose option 3, you will pay account termination fees to NFS. Your IAR does not receive any of these fees for any of these options. There may also be tax implications; please consult your tax advisor prior to termination.