Morgan Stanley Smith Barney LLC (“Morgan Stanley Wealth Management”, “MSWM”, “we” or “us”), is a registered investment adviser and a registered broker-dealer. MSWM is one of the largest financial services firms in the U.S. with branch offices in all 50 states and the District of Columbia. MSWM offers clients (“you” and “yours”) many different advisory programs. Many of MSWM’s advisory services are provided by its Consulting Group business unit. You may obtain brochures for other MSWM advisory programs at www.morganstanley.com/ADV or by asking your Financial Advisor or (for Morgan Stanley Private Wealth Management clients) your private wealth advisor. (Throughout the rest of this brochure, “Financial Advisor” means either your Financial Advisor or your Private Wealth Advisor, as applicable.) In addition, we reasonably expect to provide services as a “fiduciary” (as that term is defined in Section 3(21)(A) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and/or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”)), with respect to “Retirement Accounts” (as that term is described herein). For purposes of this brochure (including the Exhibits), the term “Retirement Account” will be used to cover (i) “employee benefit plans” (as defined under Section 3(3) of ERISA, which include pension, defined contribution profit-sharing and welfare plans sponsored by private employers, as well as similar arrangements sponsored by governmental or other public employers, which arrangements are generally not subject to ERISA; (ii) individual retirement accounts, or “IRAs” (as described in Section 4975 of the Code); and (iii) “Coverdell Educational Savings Accounts (“CESAs”). A. General Description of Programs Outsourced Chief Investment Office (OCIO) Outsourced Chief Investment Office or “OCIO” (formerly Custom Solutions or “CS”) is generally for institutional, family office and high net worth clients. In OCIO, a client appoints MSWM as the discretionary or non-discretionary investment adviser, relative to the selection of affiliated or unaffiliated mutual funds, exchange traded funds, collective investment trusts, hedge funds/alternative investment funds or investment management firms (“subadvisors” or “managers”) to manage the client’s account (collectively “Investment Products”). In addition to the investment management, MSWM will also provide custodial, trade execution and related services for a single asset based fee. Where a client appoints MSWM as the discretionary investment manager, MSWM retains discretion as to the selection of and allocation among affiliated or unaffiliated managers and Investment Products. OCIO is designed to manage the overall investment process, including investment policy decisions, asset and investment style allocation decisions, manager selection and review, and comprehensive monitoring of the client’s portfolio. Where a client appoints MSWM as the discretionary investment manager, MSWM will assume responsibility for the implementation of all investment strategies through the selection-approval and on-going monitoring of the Investment Products. Where a client appoints MSWM as the discretionary investment manager, MSWM assumes full discretion over asset allocation decisions as well as decisions to terminate any Investment Product. Where MSWM acts as a non-discretionary investment adviser, MSWM recommends Investment Products and clients retain the authority on allocation decisions as well as decisions to terminate any Investment Product. In certain cases, an internal portfolio management team within MSWM will be responsible for exercising this discretion utilizing model portfolios, which may hold one type of Investment Product, including ETFs, mutual funds, or SMAs, or may invest in a combination of such Investment Products. MSWM also provides the client with on-going financial management services such as investment performance reporting, administration, trade execution and custody. Based on a client’s long-term strategic policy allocation parameters and other investment constraints, MSWM will look for opportunities in asset classes or investment styles with above average expected rates of return while managing overall portfolio risk in accordance with the client’s investment policies. As a “manager of managers”, MSWM will assume full responsibility for the operations the client’s investment program. In order to assess the appropriateness of the assets in the client’s current portfolio, MSWM will conduct a review of the investment policy, asset allocation and fund assets following these key steps:
• Investment Policy Statement – MSWM will assist the client in the preparation of an investment policy statement (“IPS”) in order to evaluate and articulate the clients risk tolerance and investment objectives. In doing so, MSWM will assist the client in identifying its needs for liquidity, income, growth of income, growth of principal and preservation of capital. The IPS will assist the client in selecting and developing an appropriate investment strategy and will assist MSWM in executing such strategies.
• Current Portfolio Analysis – MSWM will complete a thorough evaluation of a client’s current investment program, including investment structure, individual components of each fund, fee structures, manager selection process, possible conflicts of interest, peer universe comparisons and on-going evaluation procedures. The analysis will culminate in a business evaluation of all contracts, custodial documents and performance monitors.
• Asset Allocation Analysis - MSWM will complete an analysis of the asset allocation and the basis for asset allocation decisions. The analysis will assist the client in understanding the modeling process and will lead to an estimate as to the client’s needs for updates and the frequency with which such uptakes 5 will be provided. This is a key component in MSWM’s risk management evaluation process. Cash Management. In OCIO, a client may elect discretionary cash management services to clients, whereby MSWM invests and reinvests the proceeds of the account in accordance with the client’s investment criteria, concentration limits and other requirements as stated in the client’s Investment Policy Statement (“IPS”) or a quantifiable rules matrix (the “Matrix”) as a supplement to the client’s IPS. Generally, the whole cash management portfolio is invested in short duration fixed income and cash equivalent investments. The IPS or Matrix is sent to the client and provided the client agrees that it is consistent with their investment goals, MSWM will manage that cash portfolio according to the IPS or Matrix. If assets held in the account fall outside of the IPS or Matrix, MSWM will generally liquidate such assets in an orderly manner within a commercially reasonable amount of time. If the client revises the IPS or Matrix documents, MSWM will then update the IPS or Matrix and obtain the client’s approval of the new IPS or Matrix Tax Management. In OCIO, a client may elect tax management (“Tax Management”) services for the account. In order to elect Tax Management services, you will need to tell your Financial Advisor that you desire Tax Management services, and what Maximum Tax or Realized Capital Gain Instructions you desire for your account. The Tax Management Terms and Conditions attached to this Brochure as Exhibit A will govern Tax Management services in your account. Alternative Investments Performance Reporting Service. In OCIO, MSWM offers alternative investments performance reporting capabilities. MSWM offers clients the ability to receive periodic reports that provide historical performance reporting of their alternative investments that were not purchased through MSWM. In addition, MSWM will consider these alternative investments for purposes of its performance monitoring and asset allocation analysis. The alternative investments historical performance information provided by this service is based upon information provided, directly or indirectly, to MSWM by the issuer of the alternative investment, or by its sponsor, investment manager or administrator (“Performance Reporting AI”). MSWM’s ability to provide historical or other performance reporting on alternative investments is dependent upon its ability to obtain such information from each Performance Reporting AI. The performance reporting enables the client to receive from MSWM periodic reports containing the client’s historical performance information as reported by the applicable Performance Reporting AI. The reporting service and asset allocation analysis are not intended to constitute investment advice or a recommendation by MSWM of any alternative investment and MSWM is not evaluating the appropriateness of the initial investment or the continued investment in the alternative investments reported on as a part of this service. In addition, the service does not constitute, create or impose a fee-based brokerage relationship, a fiduciary relationship or an investment advisory relationship under the Investment Advisers Act of 1940, as amended, with regard to the provision of the investments covered under this service. If the Client is an employee benefit plan or is otherwise subject to ERISA, MSWM is NOT acting as a fiduciary (as defined in ERISA) with the respect to the provision of these reporting services as described herein). MSWM is not responsible for and will not provide tax reporting with respect to any alternative investment reported on under this service. Morgan Stanley Family Office (MSFO) In certain instances, MSWM will provide investment advisory services using the OCIO platform through the Morgan Stanley Family Office business (“MSFO”). MSFO provides investment advisory and administrative services to ultra-high net worth family offices. Account Opening To enroll in any program described in this brochure, you must enter into the program client agreement (“Client Agreement”). Investment Restrictions The Client may impose reasonable restrictions on account investments. For example, you may restrict MSWM or the managers from buying specific equity securities, a category of equity securities (e.g., tobacco companies) or Fund shares. If you restrict a category of securities, we or the manager will determine which specific securities fall within the restricted category. In doing so, we or the manager may rely on research provided by independent service providers. Any restrictions you impose on individual securities will not be applied to Fund holdings since Funds operate in accordance with the investment objectives and strategies described in their prospectuses. Trade Confirmations, Account Statements and Performance Reviews MSWM may serve as the custodian and provide you with written confirmation of securities transactions, and account statements at least quarterly. You may waive the receipt of trade confirmations in favor of alternative methods of communication where available. You may also receive mutual fund prospectuses, where appropriate. We provide performance monitoring to clients on a case-by- case basis in a format and with a frequency as requested by the client. Risks All trading in an account is at your risk. The value of the assets held in an account is subject to a variety of factors, such as the liquidity and volatility of the securities markets. Investment performance of any kind is not guaranteed, and MSWM’s past performance with respect to other accounts does not predict future performance with respect to any particular account. In addition, certain investment strategies that MSWM may use in the programs have specific risks, including those associated with investments in common stock, fixed income securities, American Depositary Receipts, Funds and the investments below. You should consult with your Financial Advisor 6 regarding the specific risks associated with the investments in your account. Risk Relating to ETFs. There may be a lack of liquidity in certain ETFs, which can lead to a large difference between the bid-ask prices (increasing the cost to you when you buy or sell the ETF). A lack of liquidity also may cause an ETF to trade at a large premium or discount to its net asset value. Additionally, an ETF may suspend issuing new shares and this may result in an adverse difference between the ETF’s publicly available share price and the actual value of its underlying investment holdings. At times when underlying holdings are traded less frequently, or not at all, an ETF’s returns also may diverge from the benchmark it is designed to track. Risks Relating to Money Market Funds. You could lose money in money market funds. Although money market funds classified as government funds (i.e., money market funds that invest 99.5% of total assets in cash and/or securities backed by the U.S government) and retail funds (i.e., money market funds open to natural person investors only) seek to preserve value at $1.00 per share, they cannot guarantee they will do so. The price of other money market funds will fluctuate and when you sell shares they may be worth more or less than originally paid. Money market funds may, and in certain circumstances will, impose a fee upon the redemption of fund shares. Please review your money market fund’s prospectus to learn more about the use of redemption or liquidity fees. In addition, if a money market fund that seeks to maintain a stable $1.00 per share experiences negative yields, it also has the option of converting its stable share price to a floating share price, or to cancel a portion of its shares (which is sometimes referred to as a “reverse distribution mechanism” or “RDM”). Investors in money market funds that cancel shares will lose money and may experience tax consequences. Moreover, in some circumstances, money market funds may cease operations when the value of a fund drops below $1.00 per share. In that event, the fund’s holdings will likely be liquidated and distributed to the fund’s shareholders. This liquidation process can be prolonged and last for months. During this time, these funds would not be available to you to support purchases, withdrawals and, if applicable, check writing or ATM debits from your account. Risks Relating to Master Limited Partnerships. Master Limited Partnerships (“MLPs”) are limited partnerships or limited liability companies whose interests (limited partnerships or limited liability companies units) are generally traded on securities exchanges like shares of common stock. Investments in MLPs entail different risks, including tax risks, than is the case for other types of investments. Currently, most MLPs operate in the energy, natural resources or real estate sectors. Investments in such MLP interests are subject to the risks generally applicable to companies in these sectors (including commodity pricing risk, supply and demand risk, depletion risk and exploration risk). Depending on the ownership vehicle, MLP interests are subject to varying tax treatment. Please see “Tax and Legal Considerations” below and any Fund prospectus by asking your Financial Advisor. Risks Relating to Funds that Primarily Invest in Master Limited Partnerships. In addition to the risks outlined above relating to Master Limited Partnerships, Funds that primarily invest in MLPs generally accrue deferred tax liability. The fund’s deferred tax liability (if any) is reflected each day in the fund’s net asset value. As a result, the fund’s total annual operating expenses may be significantly higher than those of funds that do not primarily invest in MLPs. Please see the Fund prospectus for additional information. Risks Relating to Funds that Pursue Complex or Alternative Investment Strategies or Returns. These Funds may employ various investment strategies and techniques for both hedging and more speculative purposes such as short selling, leverage, derivatives and options, which can increase volatility and the risk of investment loss. Alternative investment strategies are not appropriate for all investors. While mutual funds and ETFs may at times utilize non- traditional investment options and strategies, they have different investment characteristics from unregistered privately offered alternative investments. Because of regulatory limitations, mutual funds and ETFs may not invest in as broad a spectrum of investments as privately offered alternative investments. As a result, investment returns and portfolio characteristics of alternative mutual funds may vary from traditional hedge funds pursuing similar investment objectives. They are also more likely to have relatively higher correlation with traditional market returns than privately offered alternative investments. Moreover, traditional hedge funds have limited liquidity with long “lock-up periods allowing them to pursue investment strategies without having to factor in the need to meet client redemptions. On the other hand, mutual funds typically must meet daily client redemptions. This differing liquidity profile can have a material impact on the investment returns generated by a mutual fund pursuing an alternative investing strategy compared with a traditional hedge fund pursuing the same strategy. Non-traditional investment options and strategies are often employed by a portfolio manager to further a Fund’s investment objective and to help offset market risks. However, these features may be complex, making it more difficult to understand the Fund’s essential characteristics and risks, and how it will perform in different market environments and over various periods of time. They may also expose the Fund to increased volatility and unanticipated risks particularly when used in complex combinations and/or accompanied by the use of borrowing or “leverage”. Risks Relating to Alternative Investments. Alternative investments have different features and risks than other types of investment products. As further described in the offering documents of any particular alternative investment, alternative investments can be highly illiquid, are speculative and are not appropriate for all investors. For example, alternative investments may place substantial limits on liquidity and the redemption rights of investors, including only permitting withdrawals on a limited periodic basis and with a significant period of notice and may impose early withdrawal fees. Alternative investments are intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment. Investors should carefully review and consider potential risks before investing. Certain of these risks may include: loss of all or a substantial portion of the investment due to leveraging, short selling, or other 7 speculative practices; lack of liquidity, in that there may be no secondary market for the fund and none expected to develop; volatility of returns; restrictions on transferring interests in the fund; potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized; absence of information regarding valuations and pricing; complex tax structures and delays in tax reporting; less regulation and higher fees than mutual funds; and advisor risk. Alternative investment products may also have higher fees (including multiple layers of fees) compared to other types of investments. Individual funds will have specific risks related to their investment programs that vary from fund to fund. For more details on these and other features and risks, please carefully read the documentation (including risk disclosures) relating to any selected Investment Option, as well as your Client Agreement. Risks Relating to Co-investments. A co-investment is an investment in a specific transaction made by limited partners of a private equity fund alongside, but not through the main fund. In addition to the above risks related to alternative investments, co-investments are subject to enhanced concentration risk. Risks Relating to Differing Classes of Securities. Different classes of securities have different rights as creditor if the issuer files for bankruptcy or reorganization. For example, bondholders’ rights generally are more favorable than shareholders’ rights in a bankruptcy or reorganization. Tax and Legal Considerations Neither MSWM nor any of our affiliates provide tax or legal advice and, therefore, are not responsible for developing, implementing or evaluating any tax or legal strategies that may be employed by the client. The client should develop any such strategies or address any tax-related issues with a qualified tax adviser or any legal issues with a qualified attorney. Investment in MLPs entails different risks, including tax risks, than is the case for other types of investments. Investors in MLPs hold “units” of the MLP (as opposed to a share of corporate stock) and are technically partners in the MLP. Holders of MLP units are also exposed to the risk that they will be required to repay amounts to the MLP that are wrongfully distributed to them. Almost all MLPs have chosen to qualify for partnership tax treatment. Partnerships do not pay U.S. federal income tax at the partnership level. Rather, each partner of a partnership, in computing its U.S. federal income tax liability, must include its allocable share of the partnership’s income, gains, losses, deductions, expenses and credits. A change in current tax law, or a change in the business of a given MLP, could result in an MLP being treated as a corporation for U.S. federal income tax purposes, which would result in such MLP being required to pay U.S. federal income tax on its taxable income. The classification of an MLP as a corporation for U.S. federal income tax purposes would have the effect of reducing the amount of cash available for distribution by the MLP and could cause any such distributions received by the an investor to be taxed as dividend income. If you have any questions about the tax aspects of investing into an MLP, please discuss with your tax advisor. Investors in MLP portfolios will receive a Schedule K-1 for each MLP in the portfolio, so they will likely receive numerous Schedule K-1s. Investors will need to file each Schedule K-1 with their federal tax return. Also, investors in MLP portfolios may be required to file state income tax returns in states where the MLPs in the portfolio operate. Since some Schedule K-1s may not be provided until after the due date for the federal or state tax return, investors in MLP portfolios may need to obtain an extension for filing their federal or state tax returns. Please discuss with your tax advisor how an investment in MLPs will affect your tax return. Tax laws impacting MLPs may change, and this could impact any tax benefits that may be available through investment in an MLP portfolio. Fees The maximum asset-based fee for accounts in the OCIO Program is 1.750%. Fees for the OCIO program are negotiable based on factors including the type and size of the account and the range of services provided by MSWM. In special circumstances, and with the client’s agreement, the fee charged to a client for an account may be more than the maximum annual fee stated in this section. The fee is payable as described in the Client Agreement. Generally, the initial fee is due in full on the date you open your account at MSWM and is based on the market value of the account on that date. The initial fee payment covers the period from the opening date through (at your election) the last day of the current quarter or the next full calendar quarter and is prorated accordingly. Thereafter, the fee is paid quarterly in advance based on the account’s market value on the last day of the previous calendar quarter and is due promptly. The Client Agreement authorizes MSWM to deduct fees when due from the assets contained in the account. In addition to the MSWM fee described above, OCIO Clients also bear manager expenses (which generally range up to 0.75%) or the expense ratios of mutual funds and other pooled investment vehicles directly. Performance-based Fees. In limited circumstances, MSWM has entered into performance fee arrangements with qualified MSFO clients. Such fee arrangements are subject to individual negotiation with each such client. Because Financial Advisors manage accounts with different fee schedules, the Financial Advisor has an incentive to favor clients or accounts with a performance-based fee over other clients or accounts and to take risks that are beyond a client’s risk tolerance and investment objectives.

To address these conflicts of interest, we have adopted policies and procedures reasonably designed to ensure that allocation decisions are not influenced by fee arrangements and investment opportunities will be allocated in a manner that we believe to be consistent with our obligations as an investment adviser and reasonably designed to ensure that 8 we solely recommend investments that are consistent with each client’s risk tolerance and investment objectives. Accounts Related for Billing Purposes. When two or more investment advisory accounts ware related together for billing purposes, you can benefit even more from existing breakpoints. If you have two accounts, the “related” fees on Account #1 are calculated by applying your total assets (i.e. assets in Account #1 + assets in Account #2) to the Account #1 breakpoints. Because this amount is greater than the amount of assets solely in Account #1, you may have a greater proportion of assets subject to lower fee rates, which in turn lowers the average fee rate for Account #1. This average fee rate is then multiplied by the actual amount of assets in Account #1 to determine the dollar fee for Account #1. Likewise, the total assets are applied to the Account #2 breakpoints to determine the average fee rate for Account #2, which is then multiplied by the actual amount of assets in Account #2 to determine the dollar fee for Account #2. For more information about which of your accounts are grouped in a particular billing relationship, please contact your Financial Advisor. Only certain accounts may be related for billing purposes, based on the law and MSWM’s policies and procedures. Even where accounts are eligible to be related under these policies and procedures, they will only be related if this is specifically agreed between you and the Financial Advisor. ERISA Fee Disclosure for Retirement Accounts. In accordance with Department of Labor regulations under Section 408(b)(2) of ERISA, MSWM is required to provide certain information regarding our services and compensation to assist fiduciaries and plan sponsors of those retirement plans that are subject to the requirements of ERISA in assessing the reasonableness of their plan’s contracts or arrangements with us, including the reasonableness of our compensation. This information (the services we provide as well as the fees) is provided to you at the outset of your relationship with us and is set forth in your advisory contract with us (including the Fee table, other exhibits and, as applicable, this document), and then at least annually to the extent that there are changes to any investment-related disclosures for services provided as a fiduciary under ERISA. B. Comparing Costs The primary service that you are purchasing in the programs described in this brochure is the Firm’s discretionary management of your portfolio pursuant to certain program guidelines. Cost comparisons are difficult because that particular service is not offered in other advisory programs. Depending on the level of trading and types of securities purchased or sold in your account, if purchased separately, you may be able to obtain transaction execution at a higher or lower cost at MSWM or elsewhere than the fee in these programs. However, such transactions could not be executed on a discretionary basis in a brokerage account. In addition, MSWM offers other programs where discretionary portfolio management is provided by affiliated or unaffiliated third party investment managers and the fees in those programs may be higher or lower than the fees in these programs. Those programs involve the discretionary portfolio management decisions of third party investment managers and not your Financial Advisor. You should consider these and other differences when deciding whether to invest in an investment advisory or a brokerage account and, if applicable, which advisory programs best suit your individual needs. C. Additional Fees If you open an account in one of the programs described in this brochure, you will pay us an asset-based fee for investment advisory services, custody of securities and trade execution through MSWM. The program fees do not cover:
• the costs of investment management fees and other expenses charged by Funds (see below for more details);
• “mark-ups,” “mark-downs,” and dealer spreads (A) that MSWM or its affiliates may receive when acting as principal in certain transactions where permitted by law or (B) that other broker-dealers may receive when acting as principal in certain transactions effected through MSWM and/or its affiliates acting as agent, which is typically the case for dealer market transactions (e.g., fixed income, over-the-counter equity, and foreign exchange (“FX”) conversions in connection with purchases or sales of FX- denominated securities and with payments of principal and interest dividends on such securities);
• fees or other charges that you may incur in instances where a transaction is effected through a third party and not through us or our affiliates (such fees or other charges will be included in the price of the security and not reflected as a separate charge on your trade confirmations or account statements);
• MSWM account establishment or maintenance fees for its Individual Retirement Accounts (“IRA”) and Versatile Investment Plans (“VIP”), which are described in the respective IRA and VIP account and fee documentation (which may change from time to time);
• account closing/transfer costs;
• processing fees or
• certain other costs or charges that may be imposed by third parties (including, among other things, odd-lot differentials, transfer taxes, foreign custody fees, exchange fees, supplemental transaction fees, regulatory fees and other fees or taxes that may be imposed pursuant to law). 9 Funds in Advisory Programs Investing in strategies that invest in mutual funds, closed-end funds and ETFs (such mutual funds, closed-end funds and ETFs are collectively referred to in this Funds in Advisory Programs Section as “Funds”) is more expensive than other investment options offered in your advisory account. In addition to our fee, you pay the fees and expenses of the Funds in which your account is invested. Fund fees and expenses are charged directly to the pool of assets the Fund invests in and are reflected in each Fund’s share price. These fees and expenses are an additional cost to you that is embedded in the price of the Fund, and therefore, are not included in the fee amount in your account statements. Each mutual fund and ETF expense ratio (the total amount of fees and expenses charged by the Fund) is stated in its prospectus. The expense ratio generally reflects the costs incurred by shareholders during the Fund’s most recent fiscal reporting period. Current and future expenses may differ from those stated in the prospectus. You do not pay any sales charges for purchases of Funds in programs described in this brochure. However, some Funds may charge, and not waive, a redemption fee on certain transaction activity in accordance with the policies described in the applicable prospectus. Expense Payments and Fees for Data Analytics. MSWM receives expense payments and fees for data analytics, recordkeeping and related services. MSWM provides Fund families with opportunities to sponsor meetings and conferences and grants them access to our branch offices and Financial Advisors for educational, marketing and other promotional efforts. Fund representatives may work closely with our branch offices and Financial Advisors to develop business strategies and support promotional events for clients and prospective clients, and educational activities. Some Fund families or their affiliates will reimburse MSWM for certain expenses incurred in connection with these promotional efforts, client seminars, and/or training programs. Fund families independently decide if and what they will spend on these activities, with some Fund families agreeing to make a substantial annual dollar amount expense reimbursement commitments. Fund families also invite our Financial Advisors to attend Fund family-sponsored events. Expense payments may include meeting or conference facility rental fees and hotel, meal and travel charges. For more information regarding the payments MSWM receives from Fund families, please refer to the brochures titled “Mutual Fund Features, Share Classes and Compensation” and “ETF Revenue Sharing, Expense Payments and Data Analytics” (together, the “Mutual Fund and ETF Brochures”), which can be found at https://www.morganstanley.com/disclosures. The Mutual Fund and ETF Brochures are also available from your Financial Advisor on request. Fund family representatives are allowed to occasionally give nominal gifts to Financial Advisors, and to occasionally entertain Financial Advisors (subject to an aggregate entertainment limit of $1,000 per employee per fund family per year). MSWM’s non-cash compensation policies set conditions for each of these types of payments, and do not permit any gifts or entertainment conditioned on achieving any sales target. MSWM also provides Fund families with the opportunity to purchase data analytics regarding Fund sales. The amount of the fee depends on the level of data. We also offer sponsors of passively-managed ETFs a separate transactional data feed. Additional fees apply for those Fund families that elect to purchase supplemental data analytics regarding financial product sales at MSWM. For more information regarding these payments, as well as others, please refer to the Mutual Fund and ETF Brochures described above. Conflicts of Interest regarding the Above-Described Expense Payments and Fees for Data Analytics. The above described fees present a conflict of interest for Morgan Stanley and our Financial Advisors to promote and recommend those Funds that make these payments in advisory program accounts rather than other eligible investments that do not make similar payments. Further, in aggregate, we receive significantly more support from participating revenue sharing sponsors and mutual funds that pay administrative services fees with the largest client holdings at our firm, as well as those sponsors that provide significant sales expense payments and/or purchase data analytics. This in turn could lead our Financial Advisors and Branch Managers to focus on those Fund families. In addition, since our revenue sharing support fee program utilizes rates that are higher for Funds with higher management fees, we have a conflict of interest to promote and recommend Funds that have higher management fees. In order to mitigate these conflicts, Financial Advisors and their Branch Managers do not receive additional compensation as a result of the fees and data analytics payments received by Morgan Stanley. For more information, please refer to the Mutual Fund and ETF Brochures described above. However, please note that client accounts in the advisory program described in this brochure are not subject to the revenue sharing payments or the administrative service fees described in this these documents. Affiliated Funds. Certain Funds are sponsored or managed by, or receive other services from, MSWM and its affiliates, which include, but are not limited to, Morgan Stanley Investment Management, Eaton Vance, Boston Management and Research, Calvert Research and Management, Atlanta Capital Management Company and Parametric Portfolio Associates. Where you invest in mutual funds where the investment adviser is a MSWM affiliate, in addition to the program fee paid by clients, MSWM and its affiliates may also receive investment management fees and related administrative fees. Since the affiliated sponsor or manager receives additional investment management fees and other fees, MSWM has a conflict to recommend MSWM affiliated mutual funds. In order to mitigate this conflict, Financial Advisors do not receive additional compensation for recommending proprietary and/or affiliated funds. Additionally, affiliated Funds and sponsors are subject to the same economic arrangements with MSWM as those that MSWM has with third-party Funds. MSWM’s affiliates have entered into administrative services and revenue sharing agreements with MSWM as described above. 10 To the extent that such funds are offered to and purchased by Retirement Accounts, the advisory fee on any such account will be reduced, or offset, by the amount of the fund management fee, shareholder servicing fee and distribution fee we, or our affiliates, may receive in connection with such Retirement Account’s investment in such affiliated managed fund. Mutual Fund Share Classes. Mutual funds typically offer different ways to buy fund shares. Some mutual funds offer only one share class while most funds offer multiple share classes. Each share class represents an investment in the same mutual fund portfolio, but assesses different fees and expenses. Many mutual funds have developed specialized share classes designed for various advisory programs (“Advisory Share Classes”). In general, Advisory Share Classes are not subject to either sales loads or ongoing marketing, distribution and/or service fees (often referred to as “12b-1 fees”), although some may assess fees for record keeping and related administrative services, as disclosed in the applicable prospectus. MSWM typically utilizes Advisory Share Classes that compensate MSWM for providing such administrative services to its advisory clients. However, our fees for these services are rebated to clients. If you wish to purchase other types of Advisory Share Classes, such as those that do not compensate intermediaries for record keeping and administrative services, which generally carry lower overall costs and would thereby increase our investment return, you will need to do so directly with the mutual fund or through an account at another financial intermediary. Please note, we may offer non-Advisory Share Classes of mutual funds (i.e., those that are subject to 12b-1 fees) if, for example, a fund does not offer an Advisory Share Class that is equivalent to those offered here. In such instance, MSWM will rebate directly to clients holding such fund any such 12b-1 fees that we receive. Once we make an Advisory Share Class available for a particular mutual fund, clients can only purchase the Advisory Share Class of that fund. If you hold non-Advisory Share Classes of mutual funds in your advisory account or seek to transfer non-Advisory Share Classes of mutual funds into your advisory account, MSWM (without notice to you) will convert those shares to Advisory Share Classes to the extent they are available. This will typically result in your shares being converted into a share class that has a lower expense ratio, although exceptions are possible. On termination of your advisory account for any reason, or the transfer of mutual fund shares out of your advisory account, we may convert any Advisory Share Classes of funds into a share class that is available in non-advisory accounts or we may redeem these fund shares altogether. Non-Advisory Share Classes generally have higher operating expenses than the corresponding Advisory Share Class, which will increase the cost of investing and negatively impact investment performance. Cash Sweeps Generally, some portion of your account will be held in cash. If MSWM acts as custodian for your account, it will effect “sweep” transactions of free credit balances in your account into interest-bearing deposit accounts (“Deposit Accounts”) established under the Bank Deposit Program (“BDP”). For most clients BDP will be the designated cash sweep. Generally, the rate on BDP will be lower than the rate on other cash alternatives. In limited circumstances, such as clients ineligible for BDP, MSWM may sweep some or all of your cash into money market mutual funds (each, a Money Market Fund”). These Money Market Funds are managed by Morgan Stanley Investment Management Inc. or another MSWM affiliate. It is important to note that free credit balances and allocations to cash including assets invested in sweep investments are included in your account’s fee calculation hereunder. If your account is a Retirement Account, you should read Exhibit B to this Brochure, entitled “Affiliated Money Market Funds Fee Disclosure Statement and Float Disclosure Statement”. MSWM, acting as your custodian, will effect sweep transactions only to the extent permitted by law and if you meet the eligibility criteria. Under certain circumstances (as described in the Bank Deposit Program Disclosure) eligible deposits in BDP may be sent to non-affiliated Program Banks (; this additional feature may provide enhanced FDIC coverage to you as well as funding value benefits to the Morgan Stanley Sweep Banks. For eligibility criteria applicable to this additional feature and BDP generally, please refer to the Bank Deposit Program Disclosure Statement which is available at: http://www.morganstanley.com/wealth- investmentstrategies/pdf/BDP_disclosure.pdf. Conflicts of Interest Regarding Sweep Investments. If BDP is your sweep, you should be aware that the Sweep Banks, which are affiliates of MSWM, will pay MSWM an annual account- based flat fee for the services performed by MSWM with respect to BDP. MSWM and the Sweep Banks will review such fee annually and, if applicable, mutually agree upon any changes to the fee to reflect any changes in costs incurred by MSWM. Your Financial Advisor will not receive a portion of these fees or credits. In addition, MSWM will not receive cash compensation or credits in connection with the BDP for assets in the Deposit Accounts for Retirement Accounts. Also, the affiliated Sweep Banks have the opportunity to earn income on the BDP assets through lending activity, and that income is usually significantly greater than the fees MSWM earns on affiliated Money Market Funds. Thus, in its capacity as custodian, MSWM has a conflict of interest in connection with BDP being the default sweep, rather than an eligible Money Market Fund. In addition, MSWM, the Sweep Banks and their affiliates receive other financial benefits in connection with the BDP. Through the BDP, each Sweep Bank will receive a stable, cost- effective source of funding. Each Sweep Bank intends to use deposits in the Deposit Accounts at the Sweep Bank to fund current and new businesses, including lending activities and investments. The profitability on such loans and investments is generally measured by the difference, or “spread,” between the interest rate paid on the Deposit Accounts at the Sweep Banks and other costs of maintaining the Deposit Accounts, and the interest rate and other income earned by the Sweep Banks on those loans and investments made with the funds in the Deposit Accounts. The cost of funds for the Morgan Stanley Sweep 11 Banks of deposits through the sweep program in ordinary market conditions is lower than their cost of funds through some other sources, and the Morgan Stanley Sweep Banks also receive regulatory capital and liquidity benefits from using the sweep program as a source of funds as compared to some other funding sources. The income that a Sweep Bank will have the opportunity to earn through its lending and investing activities in the ordinary market conditions is greater than the fees earned by us and our affiliates from managing and distributing the money market funds which may be available to you as a sweep investment. Morgan Stanley has added Program Banks to the BDP in order to maximize the funding value of the deposits in BDP for the Morgan Stanley Sweep Banks. On any given day, you may have deposits that are sent to a Program Bank depending on the funding value considerations of the Morgan Stanley Sweep Banks and the capacity of the depository networks that allocate deposits to the Program Banks. In addition to the benefits to the Morgan Stanley Sweep Banks, you may also benefit from having deposits sent to the Program Banks by receiving FDIC insurance on deposit amounts that would otherwise be uninsured. .In return for receiving deposits through BDP, the Program Banks provide other deposits to the Morgan Stanley Sweep Banks. This reciprocal deposit relationship provides a low-cost source of funding, and capital and liquidity benefits to both the Program Banks and the Morgan Stanley Sweep Banks. The Program Banks pay a fee to a Program Administrator in connection with the reciprocal deposits, but the cost of that fee is not borne directly by Morgan Stanley clients. The Morgan Stanley Sweep Banks have discretion in setting the interest rates paid on deposits received through BDP, and are under no legal or regulatory requirement to maximize those interest rates. The Morgan Stanley Sweep Banks and the Program Banks can and sometimes do pay higher interest rates on some deposits they receive directly than they pay on deposits received through BDP. This discretion in setting interest rates creates a conflict of interest for the Morgan Stanley Sweep Banks. The lower the amount of interest paid to customers, the greater is the “spread” earned by the Morgan Stanley Sweep Banks on deposits through the Program, as explained above. By contrast, money market funds (including Morgan Stanley affiliated money market funds) have a fiduciary duty to seek to maximize their yield to investors, consistent with their disclosed investment and risk-management policies and regulatory constraints. If your cash sweeps to a Money Market Fund, as available, then the account, as well as other shareholders of the Money Market Fund, will bear a proportionate share of the other expenses of the Money Market Fund in which the account’s assets are invested. If your cash sweeps to a Money Market Fund, you understand that MSIM (or another MSWM affiliate) will receive compensation, including management fees and other fees, for managing the Money Market Fund. We receive compensation from such Money Market Funds at rates that are set by the funds’ prospectuses and currently range, depending on the program in which you invest, from 0.10% per year ($10 per $10,000 of assets) to 0.25% per year ($25 per $10,000 of assets) of the total Money Market Fund assets held by our clients. Please review your Money Market Fund’s prospectus to learn more about the compensation we receive from such funds. We have a conflict of interest as we have an incentive to only offer affiliated Money Market Funds in the Cash Sweep program, as MSIM (or another affiliate) will receive compensation for managing the Money Market Fund. We also have a conflict of interest as we offer those affiliated funds and share classes that pay us more compensation than other funds and share classes. You should understand these costs because they decrease the return on your investment. In addition, we intend to receive revenue sharing payments from MSIM in the event a Money Market Fund waives its fees in a manner that reduces the compensation that we would otherwise receive. We either rebate to clients or do not receive compensation on sweep Money Market Fund positions held in our fee-based advisory accounts. Unless your account is a Retirement Account, the fee will not be reduced by the amount of the Money Market Fund management fee or any shareholder servicing and/or distribution or other fees we or our affiliates may receive in connection with the assets invested in the Money Market Fund. For additional information about the Money Market Fund and applicable fees, you should refer to each Money Market Fund’s prospectus. D. Compensation to MSWM If you invest in the program described in this brochure, a portion of the fees payable to us in connection with your account is allocated on an ongoing basis to MSWM Financial Advisors. The amount allocated to your MSWM Financial Advisor in connection with accounts opened in programs described in this brochure may be more than if you participated in other MSWM investment advisory programs, or if you paid separately for investment advice, brokerage and other services. MSWM may therefore have a financial incentive to recommend one of the programs in this brochure instead of other MSWM programs or services. If you invest in the program described in this brochure, MSWM may charge a fee less than the maximum fee stated above. The amount of the fee you pay is a factor we use in calculating the compensation we pay your MSWM Financial Advisor. Therefore, MSWM Financial Advisors have a financial incentive not to reduce fees Payments from Mutual Funds and Managers. Please see the discussion in Item 4 C.