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One of the more commonly misunderstood concepts in investing is the difference between risk and volatility. Many investors assume that a portfolio’s ups and downs define how risky it is, but that is not necessarily true. Understanding the difference between risk and volatility can help long-term investors maintain perspective, stay disciplined through market cycles, and avoid making emotionally driven decisions that can be compromising to wealth building. Volatility measures the magnitude of how much an investment’s value fluctuates over a given period. We define risk as the potential for a permanent loss of capital or failing to achieve your long-term financial goals. Our brains are wired to interpret loss as danger, even if it is only a temporary loss “on paper”. Thus, we understand that for most, watching the value of an investment drop tends to trigger a powerful emotional response. The media also tends to do a good job at amplifying this perception, with headlines often framing short-term market dips as “risky” events. Volatility is Temporary High volatility indicates larger, more frequent price swings, while low volatility suggests more stable and gradual price movements. Volatility to the downside is a reflection of market uncertainty and the market’s “mood”, which can range from fearful to euphoric. That said, volatility can make the stock market feel unpredictable for many investors. Over short periods of time, it indeed is. Prices can swing, headlines can turn negative, and investors begin to question their strategies. While this can be unsettling, long-term investors must recognize that volatility is temporary and that it has historically paid to stay the course. Risk: The Potential for Permanent Loss of Capital Investment risk is not about short-term price swings. Rather, it is potential for a permanent loss of capital or falling short of your financial goals. For example: A company going bankrupt is a risk of total loss. Failing to outpace inflation over time creates risk of outliving your wealth. Panic selling at the bottom of a downturn and missing the recovery results in permanent loss of capital and results in risk of outliving your wealth. Volatility and risk can be related, yet volatility alone doesn’t cause losses. If an investor has a well-constructed portfolio of prudent investments, it is the investors’ reaction to volatility that most often causes permanent losses. Volatility Is the Price of Admission for Long-Term Growth While the S&P 500 has had single-year losses exceeding 30%, it has never produced a negative return over any rolling 20-year period in modern history[1]. In other words, short-term volatility is the emotional cost investors pay for long-term growth. If markets were perfectly stable, they wouldn’t offer higher return potential than cash or bonds. Additionally, from 1985 through 2024, the S&P 500 produced an annualized return of 11.68%[1]. When digesting that statistic, a natural inference one may make is that the index delivered a relatively consistent annual return of around 11% -12% over the 40-year period. However, there were only three years over this period that the index returned between 9% and 12%. Similarly, there were five instances where the index lost greater than 9% in a year. Over the long run, volatility tends to smooth out, often rewarding investors that are patient. Managing Volatility Without Losing Sleep Volatility is an inevitable part of investing, but it does not have to derail your plan and is much easier to tolerate when you expect it. Here are tips on how to stay steady when markets are not: 1) Focus on Time Horizon, Not Headlines If your goals are years or decades away, daily market noise shouldn’t dictate your strategy. Volatility only matters if you have a very short time horizon and liquidity needs. If you do have a short time horizon, then the stock market may not be the most prudent way to invest the money you know you will need in the near-term. 2) Keep a Cash Reserve Cash can provide stability and peace of mind during downturns. It gives you flexibility to cover short-term needs without touching long-term investments. 3) Reframe Market Swings as Opportunity When volatility rises, quality investments often go “on sale.” Staying disciplined allows you or your advisor to take advantage of those moments rather than fear them. The healthiest way to view volatility is as a feature of investing, not a flaw. It is an opportunity for those who can navigate it and what allows long-term investors to earn higher returns than those who keep their money in cash. Final Thoughts Volatility can understandably make investors nervous, but it does not have to. It is the market’s way of reminding us that growth does not come in a straight line. Risk, on the other hand, is something deeper—the danger of permanent loss of capital or failing to meet your financial goals. By understanding this difference, investors can avoid the trap of reacting emotionally to every market swing and instead stay focused on the bigger picture, following their plan for long-term wealth creation. A well-built financial plan doesn’t aim to eliminate volatility. It is designed to help you endure it by aligning your goals, time horizon, and comfort level. In the end, success in investing is not about avoiding turbulence. It is about learning how to navigate through it with confidence and discipline. Footnotes [1] Source: NYU Stern: Historical Returns on Stocks, Bonds and Bills: 1928-2024. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

You may have come across the recent news of the Buss family selling the Los Angeles Lakers in June 2025 for an eyewatering $10 billion, which is the highest sale price ever for a professional sports team. The dazzle of “exclusive” private investments, such as investing in pro sports teams, has been luring in billionaires and ultra-wealthy investors for decades. However, over the last decade, adoption of private investments by average investors has risen substantially. Among other factors, the broader adoption has been driven largely by investors’ relentless quest for superior returns. Considering the Buss family invested $49.5 million to acquire the Lakers in 1979, the return on investment is certainly nothing to scoff at. At the surface, it may even appear to be an outsized return that an average investor could not have achieved. So the question is – could any investor have generated the same, or an even better, return by investing in public stocks over the same period? “Exclusive” is Not Equal to Superior As a package deal in May 1979, Jerry Buss purchased the Lakers, the Forum arena, the Kings, and a 13,000-acre ranch in the Sierra Nevada mountains for $67.5 million. Estimates indicate the $67.5M purchase price was made up of: Los Angeles Lakers: $16 million The Forum arena: $33.5 million Los Angeles Kings: $8 million The ranch: $10 million Since the Kings and the ranch were not part of the recent $10 billion sale, the estimated purchase price for the Lakers is $49.5 million. Over the 46 years of ownership, the Lakers investment generated a 20,102% total return. On an annualized basis, this equates to 12.2% per year. Alternatively, if the Buss family had invested $49.5 million in the S&P 500 over the same time period, it would have been worth $10.1 billion in June 2025 - roughly the same return the Lakers generated. While the S&P 500 is a popular U.S. stock market gauge, it is designed to capture the largest 500 companies in the U.S. stock market and gives higher weighting to the largest of companies in the index. Looking beyond just the S&P 500, if the Buss family had invested only in U.S. large-cap stocks with strong balance sheets, good profits, and attractive prices, the $49.5 million investment would have grown to a whopping $56.5 billion! Annualized, this represents 16.5% per year. Data from 6/1/1979 - 6/30/2025. Source: Avantis Investors. Large-caps generally represent the top 90% of the U.S. market capitalization. "Low Price Multiple" is defined as companies with a high book-to-market ratio [1]. "High Profitability" is defined as companies with a high profits-to-book ratio. Past performance is no guarantee of future results. While these outcomes may be contrary to what many investors would have expected, the Lakers are just one example in the pro sports world. Outlier, or Part of a Broader Trend? Leveraging public data and analysis conducted by Avantis, only a few teams from the sample below have not generated a better return on investment than the S&P 500 since their most recent owners acquired them. Yet, the story is very different if the investment was in large-cap stocks with low price multiples and high profits. Data from the team purchase date through June 2025. Source: Avantis Investors. Past performance is no guarantee of future results. While regular dividends to owners of professional sports teams are not common, it is possible the owners of these teams do receive some amount of dividends. However, due to lack of public data on that we assume no dividends were received. Even if dividends were present, it is unlikely their inclusion would be enough to result in outperformance over high-quality public stocks with attractive valuations. Conclusion To be clear, we are not implying that pro sports teams or other private investments are poor investments. Rather, the point is that depending on your circumstances and objectives, the opportunity provided by public markets may be all you need to reach your goals. It is important to recognize that private investments typically come with other characteristics that are not usually mentioned in flashy stories about big paydays. Just because a once inaccessible private investment may become accessible, it does not mean it is destined to generate a superior long-term outcome. Much like championship teams are not built on highlights alone, enduring wealth is not built on chasing flashy or exclusive investments. Footnotes [1] Research by Fama & French (1992, 1993) demonstrates that stocks with high book-to-market ratios significantly outperformed stocks with low book-to-market ratios over the long term. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

A Roth IRA conversion is a proactive financial move that can save you thousands in lifetime taxes and substantially increase legacy value to heirs. This article outlines the benefits of Roth IRA conversions, accounts that are eligible to be converted, and key considerations for suitability and the optimal time to convert. What Is a Roth IRA Conversion? A Roth IRA conversion involves transferring funds from a tax-deferred retirement account, such as a traditional IRA, into a Roth IRA. The converted amount is considered taxable income in the year of the conversion, but once in the Roth IRA, your money grows tax-free and can be withdrawn tax-free in retirement. The following are examples of retirement accounts that are eligible for Roth IRA conversion: Traditional IRA and Traditional 401(k) 403(b) SEP IRA SIMPLE IRA Solo 401(k) Key Benefits of Roth IRA Conversions 1. Tax-Free Growth and Withdrawals: Unlike tax-deferred retirement accounts, only post-tax dollars can be contributed to a Roth IRA. The primary appeal of a Roth IRA its entirely tax-free appreciation and retirement withdrawals. Strategic execution of a conversion can enhance the long-term growth of your wealth, lead to more income to spend in your retirement years, and leave more wealth remaining to pass along to your children. 2. No Required Minimum Distributions (RMDs) Unlike traditional IRAs, Roth IRAs are not subject to required minimum distributions during your lifetime. This allows your account to continue growing tax-free for a longer period and provides greater flexibility in retirement income planning. 3. Estate Planning Advantages Since Roth IRAs are not subject to RMDs, the account can be preserved and passed down to your children. Beneficiaries will eventually have to take distributions, but they can do so tax-free over a 10-year period under current IRS rules, potentially extending the tax-free growth period. Roth IRA assets also avoid the dreaded “double tax” Income in Respect of a Decedent for your heirs. Strategic Considerations for Roth IRA Conversions Due to the immediate tax consequences, Roth IRA conversions must be approached with thoughtful planning and execution to optimize the benefits. Convert During Low-Income Years: The ideal time to do a Roth conversion is when your taxable income, and thus your tax rate, is temporarily lower. This could occur during a sabbatical, early retirement before claiming Social Security or pensions, or after a job loss. Converting during a lower-income year reduces the overall tax burden and maximizes long-term growth of your wealth. Be Mindful of Market Conditions: If the value of your tax-deferred retirement account is temporarily lower due to a stock market slump, the taxes you will owe upon converting will be less than if you convert after a period of strong stock market performance. Partial Conversions Over Time: Instead of converting your full account in a single year, the optimal approach is often times to convert smaller amounts over several years. This strategy helps avoid bumping you into a higher tax bracket that could also trigger higher Medicare premiums. Coordinate with Tax Brackets: Being mindful of federal income tax brackets allows you to convert just enough to "fill up" a lower bracket. For example, if you’re in the 22% tax bracket and have room before hitting the 24% bracket, you can convert an amount up to that income threshold to minimize taxes. Pay Taxes with Outside Funds: To get the most out of a Roth conversion, it’s best to pay the taxes from funds outside the IRA. Using IRA funds to pay the tax bill reduces the amount converted and diminishes the compounding benefit of the Roth account. Married Filing Joint vs. Married Filing Separate: If you are married to a high-earning spouse and you retire before your spouse, filing your taxes separately during the years you convert may put you in a lower tax bracket than filing jointly and result in less immediate tax burden from the conversion. Will You Need the Money in 5 Years or Less?: There's a 5-year holding period on withdrawals of money that was part of a Roth conversion. If you think you'll need the money within 5 years of converting, you should consider converting only the amount that you will not need in the following 5 years. Final Thoughts Roth IRA conversions are not a one-size-fits-all solution, but when timed and executed properly, they can unlock substantial tax-free retirement income and wealth creation. Whether you're in the early stages of your career or approaching retirement, it’s wise to consult with a financial advisor to determine if a Roth conversion aligns with your broader retirement and tax planning strategies. Contact us at clientservice@riseinvestmentsusa.com to receive a complimentary and customized analysis of whether a Roth IRA conversion strategy could be beneficial for you. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. Please note, this article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

Equities rose in third quarter on strong earnings and monetary stimulus despite labor market and tariff concerns. Fixed income rallied as the Federal Reserve cut interest rates and signaled for potential future rate cuts. U.S. equity markets show signs of broadening with small-sized companies outperforming. Asset class performance beyond U.S. large cap equities demonstrates portfolio diversification benefits. Market Update U.S. equities continued their assent, fueled by strong second quarter earnings growth and Chair of the Federal Reserve, Jerome Powell’s, remarks at the annual Jackson Hole symposium suggesting that the Federal Reserve will enter a monetary easing cycle. Equity momentum outweighed investor fears of labor market weakness with the three-month average non-farm payroll growth stalling to 29,000 per month, compared to an average of 166,000 per month in 2024. Equity markets showed signs of broader participation beyond large cap equites throughout the quarter. For instance, profitable small cap equities outperformed large cap equities despite record investor outflows from small cap equities. We outlined our constructive outlook on broader market participation in last quarter’s update and have taken advantage of opportunities across client portfolios. Fixed income markets also rallied towards the end of the quarter as the September interest rate cut and expectations for additional interest rate cuts drove investors into safe haven Treasuries. As demonstrated in the chart on the following page, corporate credit spreads have continued to shrink since their most recent peak in September 2022 and are now approaching their tightest levels since 1998. Credit spreads signify the difference between the yields of corporate bonds and U.S. Treasury bonds of the same maturity. While corporate bonds entail credit risk versus credit risk free U.S. Treasury bonds, corporate bond investors are currently receiving less than 1% of incremental yield relative to that of a U.S. Treasury bond. In our view, fixed income investors are not being compensated for credit risk. Thus, we continue to favor state-tax exempt U.S. Treasuries in fixed income markets. Economic Update Economic activity continues to expand with the Federal Reserve projecting third quarter real gross domestic product (GDP) growth of almost 4%, surpassing economist projections. The primary drivers of economic activity include personal consumption and corporate capital expenditure, which have been partially offset by declines in residential investment. Global fiscal policy makers have been embracing expansionary policy while most central banks are cutting interest rates. We believe this reflationary backdrop is supportive for global economic growth and that a near-term recession is unlikely. As it stands today, our main concern is reacceleration of inflation as policy makers have signaled their intent to support the labor market. To some, non-farm payroll growth declining from 166,000 in 2024 to the current 29,000 per month (three-month average basis) signals an imminent recession. However, we view the lower net migration levels resulting from recent immigration policy to be a driver of a much smaller number of jobs needed to be created to maintain full employment. Estimates vary on the number of jobs needed to be created each month to maintain full employment. The St. Louis Federal Reserve estimates that 32,000 to 82,000 jobs are needed per month while a joint study between the American Enterprise and the Brookings Institutes estimates 10,000 to 40,000 jobs per month [1] [2]. While immigration is not the sole factor impacting the labor market, alternative measures of the labor market do not suggest weakness, including tax withholdings and initial weekly applications for unemployment benefits. Three Performers Outside the S&P 500 The recent performance of AI and technology stocks has many investors believing the S&P 500 has been the only investment opportunity, leaving many investor portfolios concerningly undiversified. We highlight three asset classes that have recently performed, supporting our long-standing rationale for a more diversified portfolio. *Source: Morningstar. Total Return represents the cumulative return including change in price plus any dividends and interest paid. 3-year returns are annualized. You cannot invest directly in an index. Past performance is not indicative of future returns. International Value Equities Global value investing has worked extraordinarily well as foreign government fiscal stimulus has ignited cyclical industries, such as global industrials and financials. While valuations have increased from their recent historically low levels, the current relative valuation between overseas and U.S. equities favors overseas equities, especially amidst a weakening U.S. Dollar. Gold Gold has re-gained its luster as a top performer. There are many reasons that have contributed to gold’s success including: Weaker U.S. Dollar Fiscal deficit concerns Inflation expectations Central bank purchasing and policy Geopolitical risks Market sentiment While gold does not offer a dividend or interest yield, it has proven a track record as a store of value and purchasing power measured over millenniums. Emerging Market Fixed Income Fixed income issued by emerging market countries such as China, Brazil, Mexico, and Indonesia have performed well for a non-equity asset class and despite currency, credit, and jurisdictional risks. Fixed income issued by these countries tends to perform especially well during structurally weak periods for the U.S. dollar and Federal Reserve rate cuts, as it allows for their local central bank to cut interest rates. Parting Thoughts As we move into the final quarter of the year, we remain focused on striking the optimal balance of risk and opportunity aligned with your unique objectives and goals. While headlines can be noisy and often emphasize short-term uncertainty, the bigger picture continues to show a resilient economy, broadening market participation, and the benefits of portfolio diversification across asset classes. Our role is to help you navigate markets and your financial future with clarity and confidence, and we are grateful to serve as your partner along the journey. Footnotes [1] Alexander Bick, “Lower Immigration Projections Mean Lower Breakeven Employment Growth Estimates,” St. Louis Fed On the Economy, Aug. 28, 2025. [2] Wendy Edelberg, Stan Veuger, and Tara Watson, “Immigration Policy and Its Macroeconomic Effects in the Second Trump Administration,” AEI Economic Perspectives, July 2025. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

Expected long-term equity returns for retail investors and financial advisors tend to be overly aggressive. Long-term equity return assumptions are a critical variable in a financial plan. Utilizing a broad range of equity return assumptions can maximize the chance of achieving financial goals. What Equity Returns do Investors Expect? Equity return assumptions play a critical role in financial planning and are often the determining factor between achieving financial goals or not. We have increasingly seen retail investors and financial advisors using long-term equity return assumptions that we view as too aggressive. According to the June 2025 Natixis Individual Investor Survey, the typical retail investor believes he or she can achieve a 10.7% long-term return above inflation. Additionally, financial advisors believe they can achieve an 8.3% annual long-term return above inflation. If we assumed the Federal Reserve achieves their 2.0% long-term inflation target, of which we are suspect, retail investors expect a 12.7% long-term nominal return and financial advisors expect a 10.3% long-term nominal return. We believe both retail investors and financial advisors are extrapolating post-Global Financial Crisis equity performance into the future. As the chart below demonstrates, that is not always the case. Long-term equity returns have generally grown in line with earnings growth. Over the past 25 years, the nominal return of the S&P 500 has been roughly equal to earnings growth [2]. How Impactful are Return Assumptions for a Financial Plan? Projecting the growth of an investor’s wealth is highly dependent on return assumptions. For instance, the difference between assuming the historical long-term equity return versus retail investor and financial advisor return expectations in a 30-year wealth projection is noteworthy. What Equity Return Assumptions Should be Used in a Financial Plan? We utilize a broad array of equity return assumptions in our clients’ financial plans. This allows for durability of the financial plan, outlines possible outcomes that should be planned for, and sets investor expectations more appropriately. Utilizing equity return assumptions based on factors such as valuation, earnings growth, and dividend yield is a great way to stress test portfolio resiliency. For instance, Vanguard publishes 10-year equity return expectations which clearly differs from both retail investor and financial advisor expectations [3]. An equity investor should be aware that their asset allocation will likely shift over time. While they may be an equity investor today, upon retirement the asset allocation will likely shift to include stable and income producing investments, such as fixed income. Neglecting future asset allocation shifts in a financial plan has a major impact on future projected values. Conclusion Retail investors and financial advisors often overestimate their equity return assumptions. Incorporating more reasonable equity return assumptions in a financial plan is critical to providing confidence in achieving one’s financial goals. Footnotes [1] 10-Year and 25-year S&P 500 returns are as of August 31st, 2025. The “Long-Term” return for stocks is based on annualized return from 1802-2021 per Jeremy Siegel’s Stocks for the Long Run 6th Edition. [2] JP Morgan Guide to the Markets as of August 31st, 2025 [3] Vanguard Capital Markets Model® forecasts as of July 23rd, 2025 Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

The equity market swiftly recovered from April’s tariff driven sell-off on the hopes of global trade clarity, interest rate cuts, and fiscal stimulus. Investor concerns about trade, geopolitics, fiscal, and monetary policy have abated, yet the valuation of the S&P 500 index has returned to generational highs. Current equity valuations, earnings expectations, and the macro-economic backdrop favor the broader equity market within the U.S. Market Update U.S. equities began the quarter with immense volatility driven by President Donald Trump’s proposed tariffs on the country’s largest trading partners. However, investor anxiety eased throughout the quarter with investors focused on tailwinds such as: Trade Policy Clarity: President Trump announced the removal of reciprocal tariffs on most trade partners Expectations for Interest Rate Cuts: The Federal Reserve expects two interest rate cuts in the second half of 2025 Fiscal Stimulus: The termination of the Department of Government Efficiency (DOGE) and passage of fiscal stimulus in the U.S. and the European Union Additional investor worries were driven on the geopolitical front with a brief escalation between Iran and Israel, leading to U.S. participation on behalf of Israel. Although plenty of anxieties weighed on investors, equity markets rallied throughout the second quarter with broad equity gains. The recovery from April’s near-term market bottom is one of the fastest reversals in recent memory. Fixed income market performance varied in the quarter, with corporate fixed income posting positive performance due to tightening credit spreads. Long-term interest rates remained rangebound as investors digested the long-term inflationary impact of fiscal stimulus with that of signaled monetary policy easing. Economic Update The U.S. economy showed resilient strength in the second quarter with continued growth in consumption, capital investment, and labor demand. However, the expectation of large Wall Street banks, like Goldman Sachs, going into the quarter was overwhelmingly for a recession. As we noted in our first quarter letter, our base case remains for U.S. and global economic growth to continue. Recessions are relatively rare and tend to be caused by an exogenous shock to the U.S. and global economy. The natural state of any economy is for growth. Investors that continually wait for a future recession to deploy capital are likely waiting for Godot. Equity Positioning We view valuations, earnings expectations, and the positive macro-economic backdrop as favorable for the broader U.S. equity market over the medium-term. This includes areas of the market such as mid cap and small cap domestic equities. While domestic large cap equities trade at the highest absolute and relative valuations since 2000, valuations of domestic mid cap and small cap equities remain attractive. Often, and rightfully so, lower valuations are warranted for fundamental reasons. Yet, the differential in earnings growth expectations for domestic large cap equities compared to mid cap and small cap equities is expected to narrow significantly in favor of mid cap and small cap equities. Furthermore, mid cap and small cap equities offer opportunities for outperformance via stock picking, as these are often overlooked areas of the domestic equity market. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Securities investments are subject to risk and may lose value. Any historical returns, expected returns, or projections are provided for informational purposes only. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information.

A Donor Advised Fund (DAF) is a popular solution for charitably inclined individuals. The three main components of a DAF are contributing, investing, and granting. DAF’s are popular for a broad range of charitably inclined individuals, especially those in high income tax brackets. The key benefits of a DAF include income tax benefits, flexibility and control, portfolio construction and estate planning. What is a Donor Advised Fund (DAF)? A DAF is a tax-efficient and simple investment solution set up by an individual, family or organization for charitable intentions. A DAF allows for an immediate tax deduction and the ability to support your desired charities over your lifetime. DAF’s have become popular in recent years. According to the National Philanthropic Trust, there is now over $250 billion in DAF assets in 2023 versus $54 billion in 2023. The average DAF account size is roughly $141,000 spread across over 1,782,000 DAF accounts. Incorporating a DAF into your financial plan can create tax, investment, estate planning and charitable benefits. How Does a DAF Work? A DAF is simple and cost effective to set up and operate. The three main components for a DAF are as follows: Contributing: Once a DAF is opened, the donor gifts assets into the DAF which is held by a public charity called a sponsoring organization. Assets that are typically used to fund a DAF include: Cash Public Securities Real Estate Private Business Interests Cryptocurrency Gifts into a DAF are held outside the donor’s estate, reducing potential future estate tax liability. It is important to note that gifts to a DAF are irrevocable and cannot be changed. Investing: Assets within a DAF can be invested to meet future charitable goals of the DAF. There are many factors to consider when developing an investment program for a DAF including: Time Horizon Return Objective Risk Tolerance Liquidity Unique Circumstances Granting: The donor provides recommendations to the sponsoring organization for specific grants to be made to eligible charities. Once the sponsoring organization reviews and approves the grant recommendation in accordance with IRS regulations, the sponsoring organization disburses a grant to the desired charity. A DAF can support any US-based 501(c)(3) public charity in good standing with the IRS. Who Should Consider a DAF? DAFs are suitable for a wide range of donors ranging from those just starting off in charity to experienced philanthropists. Individuals who are in a favorable position to open and fund a DAF include those that are: Charitably inclined High income earners Looking to diversify from concentrated and/or low-cost basis stock Interested in simplifying gift giving Seeking to reduce their taxable estate What are the Benefits of a DAF? Funding a DAF offers a broad range of benefits to the donor, which speaks to the popularity DAF’s have received. Income Tax Benefits The donor will receive an immediate federal tax deduction after gifting assets to a DAF. The maximum tax deduction received depends on the type of asset that is gifted. Any portion of the tax deduction that a donor does not utilize in the year the gift is made can be carried forward for up to five subsequent tax years, allowing for future tax deductions. For high income earners, the recently signed One Big Beautiful Bill Act (OBBBA) caps the tax benefit of itemized charitable deductions at 35%, even for those in the 37% marginal tax bracket. However, this change does not go into effect until 2026. 2025 contributions are still deducted at the 37% federal tax rate for high income earners. Flexibility and Control A DAF allows the donor to determine the timing of their contributions as well as when the grants are made to eligible charities. This allows for tax-free investment growth within the DAF once a contribution is made. Furthermore, a donor can support many different charitable causes as long as the charity is structured as a US-based 501(c)(3) organization. In addition, the donor has the ability to specify the grant’s purpose (i.e. in honor of someone) and has the optionality to be recognized or to remain anonymous. Lastly, a DAF does not have a required annual distribution, providing the donor with more flexibility than a private foundation. It is important to note that a donor cannot personally benefit from a DAF grant. Portfolio Construction Funding a DAF with low-cost basis stock is an attractive way to reduce equity exposure in a tax favorable manner. Additionally, DAF contributions are a popular way to reduce single stock concentration risk and to eliminate taxable unrealized capital gains. Gifting securities to a DAF after a period of substantial market appreciation is timely and advantageous. Estate Planning Utilizing a DAF is an attractive estate planning tool as the contributions to a DAF are outside of the donor’s estate. By reducing the taxable estate, the donor’s estate may have a lower state and or federal estate tax liability. For those in restrictive estate tax states such as, but not limited to the following states, gifting to a DAF is a popular way to reduce your state estate tax liability. Connecticut Illinois Maine Massachusetts Minnesota Oregon New York Rhode Island Vermont Washington Conclusion It is no surprise that DAF’s are becoming a popular charitable tool given their wide range of benefits. For those that are charitably inclined and looking for a tax-efficient, simple and efficient solution, a DAF likely makes sense for you. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

The One Big Beautiful Bill Act (OBBBA or The Act) introduces sweeping reforms to the federal tax code, creating long-lasting implications for many owners of small business and pass-through entities. The provisions highlighted below address key tax-related deductions to consider as you are budgeting for future years. 1) Restoration of 100% Bonus Depreciation and Section 179 Expensing Increases The Act restored 100% bonus depreciation for qualified property acquired and placed in service on or after January 20, 2025. Qualified property generally includes most tangible property with a recovery period of 20 years or less, such as land improvements, machinery, computers, and furniture and equipment. While buildings themselves don’t qualify for bonus depreciation, obtaining a cost segregation study can identify particular components of a building that does. This is especially useful for commercial and investment property owners. The Act also raises the Section 179 deduction limit to $2.5 million with a phaseout threshold of $4 million. This allows small and mid-size businesses to immediately expense qualifying property without relying solely on bonus depreciation. The advantage of Section 179 expensing is that certain states do not allow bonus depreciation but generally states allow the expensing under Section 179. Instead of spreading capital investment deductions over several years, the full tax deduction benefit can now be immediately realized. This can help to boost cash flow and leave your business with more capital to invest in growth. 2) Permanent QBI Deduction The Act makes permanent the Qualified Business Income (QBI) deduction for owners of pass-through entity businesses. Examples of pass-through entities are sole proprietorships, limited liability companies, partnerships, disregarded entities, and S corporations. The deduction, which allows eligible taxpayers to deduct up to 20% of their qualified business income, serves as a significant benefit to business owners yet comes with limitations. Some key limitations to be aware of are: There are specified service trades or businesses (SSTBs), such as law, accounting, financial services, health, and consulting, that are disallowed from taking the deduction or only eligible for a limited deduction if income exceeds a certain threshold. Deductions are generally also limited for joint and individual filers with taxable income greater than roughly $544,600 and $272,300, respectively, in 2026. The threshold amounts will be annually adjusted for inflation in future years. 3) Higher limits on interest deductions The Act permanently raises the cap on how much business loan interest can be deducted beginning in the 2025 tax year. Previously, the deduction was generally limited to 30% of a business’s adjusted taxable income (ATI). While interest deductions are still limited to 30% of ATI, the calculation of ATI no longer takes depreciation, amortization, or depletion into account for purposes of interest deduction limits. In other words, ATI is now calculated based on EBITDA (adding back depreciation, amortization and depletion), increasing the interest deduction base. This is a particularly beneficial change for capital-intensive businesses with large depreciation or amortization deductions. For owners utilizing debt to finance business growth or operations, the higher interest deduction limit makes borrowing more tax-efficient by reducing taxable income. This can be particularly helpful during periods of business expansion or inflation and high interest rates. 4) Higher SALT Deduction Cap with Pass-Through Entity Tax Workaround The state and local tax deduction limitation (SALT cap) was temporarily increased from $10,000 to $40,000 for married taxpayers filing jointly. This higher SALT cap is in effect for tax years 2025 through 2029. While the cap is reduced for those with adjusted gross income (AGI) of $500,000 or more, the higher deduction limit will serve to benefit many taxpayers with a higher potential deduction relative to prior years. For pass-through entity businesses, owners may be able to benefit even greater by making a pass-through entity tax (PTET) election in the state their business is domiciled. Doing so allows state and local taxes to be paid at the entity-level, which reduces taxable income for owners. Under this workaround, entity-level state and local tax deductions are not subject to the $40,000 SALT cap. However, it is important to note the ability to make a PTET election in the state of Illinois is currently set to sunset at the end of 2025. Illinois is one of just a small number of states that has not yet enacted to extend the PTET election. Unless the state extends the legislation before the end of 2025, Illinois business owners may no longer be able to take advantage of the PTET election beyond the 2025 tax year. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

President Donald Trump's 2025 tax bill, dubbed the "Big Beautiful Bill," introduces many potential changes to the U.S. tax code. While it has stirred up opposing views about how much it could impact the Federal deficit, the legislation aims to make permanent most of the provisions from the 2017 Tax Cuts and Jobs Act, reduce non-military government spending, and increase defense funding. Yet as currently proposed, certain provisions may stand to disproportionately benefit some households over others. This article outlines some of the material provisions included in the bill for taxpayers, who may stand to benefit from each provision, and what you can do to prepare. Note: As of the time of writing this article on June 18, 2025, the bill had been passed by The House of Representatives. On June 16, the Senate unveiled proposed changes, which are reflected here. The bill must still be passed by the Senate and then sent back to The House for another vote. As a result, the bill has not yet been fully passed. Many revisions may still be on the table prior to being signed into law by the self-imposed July 4 deadline. Permanently Higher Standard Deduction The bill would permanently raise and extend the standard deduction. The standard deduction is currently $15,000 for single filers and $30,000 if you are married and file jointly. The bill would raise these to $16,000 and $32,000, respectively. The purpose of the standard deduction is to serve as an incentive for taxpayers not to itemize deductions when filing their federal income taxes. Take inventory of your potential deductions. If they exceed the standard deduction, then it may be in your best interest to itemize. However, you should always seek advice from a qualified tax advisor. Bonus Deduction for Those Age 65 or Over While President Trump has long proposed eliminating taxes on Social Security benefits, that did not make it into the bill. However, the bill includes a new $6,000 “bonus” deduction for seniors through 2028. The deduction phases out for single filers with Modified Adjusted Gross Income (MAGI) of $75,000 or more and married couples with $150,000 or more. Individuals over 65 years old with incomes below these thresholds stand to benefit. If you are planning to retire in the next few years, have not yet started taking Social Security benefits, and you expect your retirement income (with the inclusion of Social Security benefits), to be on the cusp of the phase-out threshold, you may consider the pros and cons of waiting until age 70 to start taking your Social Security benefits, which could serve to decrease your MAGI and may qualify you to receive the deduction. Permanent Restoration of Bonus Depreciation on Qualified Property Taxpayers may once again be able to depreciate 100% of the value of qualified property acquired after January 19, 2025 during the first year of ownership. In addition, it would also allow real estate investors to fully deduct the cost of qualifying renovations, property improvements, and certain building components in the year they are placed in service. Qualified property is expected to include investment real estate and certain depreciable business property. If passed in current form, many real estate investors would benefit greatly from this provision. If you are a real estate investor or business owner, pay close attention to the continued progress of this bill, as it is still undergoing revisions. Cost segregation studies conducted by qualified CPAs and appraisers can help maximize the benefits of bonus depreciation by identifying assets with shorter useful lives. Permanent Extension of Higher Lifetime Estate Tax Exemption The bill would permanently extend and increase the Federal lifetime estate tax exemption to $15 million for single tax filers and $30 million for married couples in 2026. The exemptions would be indexed for inflation beyond 2026. In the absence of this permanent extension, the Federal lifetime estate tax exemption would likely drop to $7.14 million per individual ($14.28 million for married couples) in 2026. If the permanent extension passes it would result in potentially millions of dollars of tax savings for couples with estates exceeding $14.28 million. Anyone with a smaller estate would continue to be exempt from Federal estate taxes. If you have a higher net worth, this serves as a benefit to you. If your net worth is higher than $30 million, the value of your estate in excess of $30 million may be subject to substantial estate taxes without proper planning. There are a variety of estate planning strategies that can help reduce or mitigate the burden, such as removing assets from your estate by transferring to an irrevocable trust, annual gifting strategies, or establishing an Irrevocable Life Insurance Trust. Permanent Increase to Child Tax Credit and Introduction of New “Trump Accounts” The bill would permanently increase the maximum Child Tax Credit from $2,000 to $2,200 per child, indexed annually for inflation. Without any further changes in design, this would benefit middle-income households the greatest. Lower income households would not be eligible for the maximum credit if they earn too little to owe federal taxes. Conversely, the maximum credit also starts to phase out for joint filers with combined AGI exceeding $400,000 or $200,000 for all other taxpayers. If your household income is on the cusp of the phase-out threshold and you are not currently maximizing your retirement contributions, increasing your contributions may be enough to lower your AGI below the $400,000 threshold while also setting you up for a financially healthier retirement. The bill would also introduce new tax-exempt investment accounts meant to benefit newly born children. These investment accounts would be funded with a one-time $1,000 government payment for U.S. citizens born between from 2025 through 2028. In addition, parents would be allowed to contribute up to $5,000 annually to each qualifying child’s Trump Account. If you are a parent with a child born in 2025 or plan to have any children by the end of 2028, your children stand to benefit from Trump Accounts, which they’ll be able to use to purchase homes, start a business, or pay for an education after reaching age 18. Permanent Renewal of The Qualified Opportunity Zone (QOZ) Tax Incentive Since QOZ was put into legislation as part of the 2017 Tax Cuts and Jobs Act, it has led to 313,000 new housing units at a low subsidy cost. That makes QOZ one of the most efficient and effective housing supply programs in existence. Current QOZ designations will expire at the end of 2026. Under the proposed permanent renewal, those who have recently realized capital gains from an asset sale that invest the gains in a QOZ fund may be eligible for the following tax incentives: Deferral of capital gain through 2033 if QOZ investment is made between 2027 and 2033. Capital gains invested on or after January 1, 2034 would be eligible for deferral until December 31, 2043, and so forth with rolling decennial gain recognition dates. Discount of up to 10% of deferred gains if QOZ investment is made on or after January 1, 2027 (by way of a tax basis step-up). The discount would be applied over the first six years of the investment. The deferred gain discount schedule is as follows: 3% total discount after first three years of investment 5% total discount after first four years of investment 7% total discount after first five years of investment 10% total discount after the first six years of investment Those who hold the QOZ investment for at least 10 years would be exempt from taxation on all capital appreciation of the QOZ investment. *Assumes the maximum current Federal long-term capital gains tax rate of 20% and that the investor is subject to net investment income (NII) tax of 3.8%. *Taxes deferred by making the QOZ investment are based on the capital gain amount invested in the fund. Includes the maximum proposed 10% reduction to deferred taxes for those who invest in 2027 or 2028. ***Assumes the investment grows at a hypothetical annualized rate of 10%. Higher net worth individuals that expect to realize capital gains from substantial asset sales between 2027 and 2028 stand to benefit the greatest from the QOZ renewal proposed deferral discount schedule. If you are tax-sensitive and in the planning stages of selling your business or any other highly appreciated asset, it may be worth considering the pros and cons of incorporating a QOZ investment in your portfolio. A prudent level of due diligence is key to understanding if the investment is suitable for your investment portfolio and overall tax strategy. QOZ entails investment risks and a financial planner can help you navigate whether it is a suitable investment for your specific situation. Ability to Deduct Interest On Auto Loans This would allow taxpayers to deduct up to $10,000 of interest paid on auto loans annually. The catch is that the car’s final assembly must take place in the United States. The maximum deduction is subject to income phase-outs starting at $100,000 for single filers and $200,000 for joint filers. All owners of U.S. assembled cars that have an auto loan stand to benefit. If you drive a car that wasn’t produced in the U.S. and are in the market for a new car, you may want to consider switching to a car that is produced in the U.S. to take advantage of the interest deduction. Permanent Extension and Enhancement of Mortgage Interest Deduction The bill would permanently extend the current provision limiting the residential mortgage interest deduction to the first $750,000 in home mortgage acquisition debt. The bill would also treat certain mortgage insurance premiums on acquisition indebtedness as qualified interest that can be deducted. Homeowners subject to paying mortgage insurance premiums stand to benefit the greatest. If you are subject to mortgage insurance premiums, be sure to inform your tax accountant to learn if you are eligible to take advantage of the enhanced deduction. Conclusion Trump's 2025 tax bill has not yet been signed into law and is potentially subject to many additional changes and revisions before being passed. It introduces significant changes with varied impacts across demographics. In current form, certain provisions stand to benefit some households and taxpayers more than others. Planning for taxes can be overwhelming. Working with a financial planner or advisor can provide you with clarity, confidence, and a strategic action plan to optimize your tax efficiency and keep you on track to meet your long-term financial goals and objectives. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. This article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

Upon passing, an individual’s property may be subject to federal and state estate taxes above a certain exemption threshold. Illinois estate taxes are high and there is an Illinois estate tax exemption of only $4 million per person with no portability between spouses. Equalizing assets between spouses and utilizing credit shelter trusts are effective Illinois estate tax planning strategies. Understanding Estate Taxes and Estate Tax Exemptions An estate tax is a tax on property held by an individual at the time of their death. Both federal and state governments offer an “exemption”, which is the amount of an estate that is not subject to estate tax. For instance, estates under $13.99 million per person, or $27.98 million for a married couple, are exempt from federal estate taxes. Estates greater than those amounts are subject to federal estate taxes which is usually at a 40% tax rate. It is worth noting that unless Congress passes legislation, the federal estate tax exemption is set to expire in 2026 and the federal estate tax exemption is estimated to decline to approximately $7 million per person. What is the Illinois Estate Tax? Illinois residents are subject to more restrictive estate tax exemptions. Illinois has an estate tax exemption of just $4 million per person, meaning if you pass away with an estate valued at over $4 million, you will be subject to Illinois estate tax. Also, the amount subject to Illinois estate tax is based on the entire amount of your estate, not just the value in excess of $4 million. Illinois residents need to be aware of the key differences of the portability of their estate tax exemption at the federal and state level. Portability of the estate tax exemption between spouses means a surviving spouse can use a deceased spouse’s unused exemption in addition to their own to reduce estate taxes. Portability is allowed for federal estate taxes. The $4 million Illinois estate tax exemption is not portable between Illinois spouses, meaning that without proper estate planning, a high net worth surviving Illinois spouse may be subject to unnecessary Illinois estate taxes. The Illinois estate tax is calculated based on a complex calculation. For simplicity, we outlined the Illinois estate tax and the Illinois estate tax rate for various sized Illinois estates below: Strategies to Reduce Illinois Estate Taxes Illinois spouses that may be subject to estate taxes should not only “equalize” their assets between each spouse but look to utilize credit shelter or “bypass” trusts in their estate plan. Consider the example of two Illinois couples (Couple A and Couple B), each with an $8 million total net worth. We assume that Couple A has no bypass trusts. When the husband of Couple A passes, all the assets are titled to go directly to his wife. Couple B had set up credit shelter trusts for both spouses. When the husband of Couple B passes, $4 million goes into a trust for his wife, utilizing the husband’s Illinois estate tax exemption. The wife now has $4 million in her name and another $4 million in a credit shelter trust for her benefit. Couple A is not able to utilize the full value of each spouse’s Illinois estate tax exemption and is subject to $680,634 in Illinois estate taxes leaving $7,319,366 to their heirs. Couple B, with proper estate planning, can forgo paying Illinois estate taxes as both spouses’ Illinois estate tax exemptions were utilized leaving $8,000,000 to their heirs. It is important to note that there are various other strategies for Illinois residents to consider when engaging in estate planning. Conclusion Estate planning is often an overlooked part of an individual’s financial plan yet starting estate planning today is essential. Proper Illinois estate planning by equalizing assets between spouses and using credit shelter trusts can allow for Illinois families to preserve more wealth across generations. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information. Please note, this article is for education purposes and should not be treated as tax or legal advice. This article is not a substitute for legal or tax advice from your professional legal or tax advisor.

Several types of financial advisory fee structures exist, with a percentage of your assets that the financial advisor manages for you, known as an Assets Under Management (“AUM”) fee, being most popular. Surveys are helpful to pinpoint what a market rate AUM fee is by portfolio size. Awareness of the AUM fee you are being charged by your financial advisor is an important step in building long term wealth. Financial Advisory Fees: What You Need to Know Financial advisory fees come in various forms. For instance, certain financial advisors may charge a flat fee for service, such as a one-time fee for a financial plan. Additionally, while antiquated and less prevalent, certain financial advisors charge commissions on trades for their fee structure. However, the most popular fee structure is an annual percentage of AUM. In this structure, the financial advisor has a vested interest in how well your investments are performing. Typically, AUM fee percentage breakpoints are determined based on the size of your investment portfolio. The larger your investment portfolio is, the lower the AUM fee percentage. What AUM Fees Do Clients Typically Pay Financial Advisors? While the size of your portfolio is a factor, there are also several other factors that determine the AUM fee percentage a client pays, such as the scope of services the client is receiving from the financial advisor. For instance, a client may be receiving estate and or financial planning in addition to investment management services. Alternatively, a client may just be receiving investment management services. The chart below references the 2024 Inside Information Fee Survey by Bob Veres, which sampled 941 financial advisors. The surveyor asked the financial advisors what percentage of AUM fee they typically charge for client portfolios of various sizes. Source: 2024 Inside Information Fee Survey by Bob Veres For example, the most common AUM fee charged for a client with a $2 million portfolio is between 0.7% and 1.0%. Less than 10% of financial advisors would charge the same client an AUM fee above 1.0%. How Do High AUM Fees Affect Client’s Long-Term Wealth? While the difference between paying an AUM fee of 0.75% and 1.25% may not seem meaningful today, paying too high of an AUM fee over many years can be destructive to long-term wealth building. Consider a 60-year-old couple with a $2 million portfolio consisting of 60% equities and 40% fixed income, which we assume generates a 6% annualized return before AUM fees. After 20 years of staying invested with the same asset mix and paying a 0.75% AUM fee to their financial advisor, the ending wealth of the couple would reach over $5.5 million. Conversely, if the couple had been paying a 1.25% AUM fee, their ending wealth would be over $500,000 lower. Conclusion While AUM fees may seem small, over time they can have a major impact on the growth of your wealth over the long-term. Being informed about what is typical in the industry and evaluating whether your financial advisor’s AUM fees align with the value you receive is an important step in managing your financial future. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Securities investments are subject to risk and may lose value. Any historical returns, expected returns, or projections are provided for informational purposes only. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information.

While being a high earner comes with its perks, like not having to lose sleep over student loan payments or monthly living expenses, there are financial traps that many high earners will continue to fall into that can significantly undermine their long-term wealth building and financial prosperity. Higher income doesn’t make you immune to making poor financial decisions. Here are five of the most common traps I have noticed and how you can avoid them. 1. Lifestyle Inflation As income rises, a rise in discretionary expenses tends to follow. Many will gradually adopt a more expensive lifestyle without even necessarily realizing it. I’m referring to things like luxury homes, new cars, flying first class, or vacations at 5-star resorts. Treating yourself once in a while is one thing, however, becoming too accustomed to this can significantly erode savings capacity. RISE Tip: Establish a savings plan that is a percentage of your after-tax income. This will help you maintain disciplined wealth accumulation, ensuring your savings rate grows with your income. Rather than always having to work for your money, start letting it work for you. 2. Overconfidence in DIY Investing Overconfidence bias is a key concept in behavioral finance. It is the tendency for people to overestimate their abilities, knowledge, and control, particularly in areas where they have limited expertise. While they may understand basic market principles, they may lack the time or expertise to navigate complex financial markets and risk management properly. It often leads to excessive risk being taken, which typically does not become apparent to the individual until their portfolio starts free-falling when times get volatile. RISE Tip: Delegate investment portfolio management, or even oversight, to a seasoned professional to avoid costly errors and missed opportunities. You may even be surprised how much peace of mind this could bring. 3. Neglecting Tax Optimization High earners often pay more than necessary in taxes because they fail to leverage tax-deferred accounts, tax-advantaged investment opportunities, charitable strategies, or business structures that reduce taxable income. RISE Tip: To avoid last minute tax surprises each April, implement proactive tax planning on an ongoing basis throughout each year, not just during tax season. 4. Failure to Plan for Retirement Income Many high earners save diligently but do not plan how to convert assets into tax-efficient retirement income. This can lead to cash flow issues or excessive tax burdens in retirement. RISE Tip: Use income distribution planning tools and Roth conversion strategies to manage taxes in retirement. 5. Ignoring Estate Planning Despite their wealth, many professionals do not have an updated will, power of attorney, or trust in place to protect their assets and legacy. This oversight can lead to confusion, legal costs, and unnecessary taxes for heirs. RISE Tip: Work with your financial advisor and legal professionals to establish and periodically update estate planning documents. Earning a high income does not automatically translate into financial independence. In fact, without strategic planning, high earners may struggle just as much as average-income households—only with more at stake. By proactively avoiding these common pitfalls, you can preserve and grow your wealth so it lasts for generations. Disclosure RISE Investment Management, LLC ("RISE" or "RISE Investments") is an investment adviser registered under the Investment Advisers Act of 1940. Registration of an investment adviser does not imply any level of skill or training. This publication is solely for informational purposes and past performance is not indicative of future results. Securities investments are subject to risk and may lose value. Any historical returns, expected returns, or projections are provided for informational purposes only. Any description of products, services, and performance results of RISE contained in this publication are not an offering or a solicitation of any kind. No advice may be rendered by RISE Investments unless a client service agreement is in place. Advisory services are only offered to clients or prospective clients where RISE Investments and its representatives are properly licensed or exempt from licensure. All of the information in this publication is believed to be accurate and correct as the date set forth. RISE does not have or accept responsibility or an obligation to update such information.