Smart Treasury Disclosures

By enabling Smart Treasury (formerly known as Smart Cash), you authorize Titan to algorithmically invest your available cash in a money market fund (“Treasury Fund”) that primarily invests its assets in U.S. Treasury securities and other U.S. government securities, available on the Titan platform, and is anticipated to provide the highest available after-tax yield for you. When Titan refers to the 'highest' or 'best' yield, we are specifically referring to the highest or best yield available through the Treasury Fund options provided by Smart Treasury, available on the Titan platform. Please note that other investment options not offered through Titan may have different, and potentially higher, yields. 

If you are a new client investing with Titan for the first time, you will be automatically enrolled in Smart Treasury during account enrollment. If you do not wish to have Smart Treasury enabled on your account, you must take affirmative action to disable it. If you are an existing Titan client, you must affirmatively enable Smart Treasury on your account. There is an Advisory Fee charged on the funds you hold in Smart Treasury that is described below. If you want to hold cash on Titan without accruing an Advisory Fee, you can disable Smart Treasury and hold cash in TGT’s Cash Reserve (“Cash Reserve”) program. Holding cash in Cash Reserve will likely yield less interest than investing in Smart Treasury, but you will not be charged an Advisory Fee for funds held in Cash Reserve.

Upon enrollment and before Smart Treasury can be enabled, Titan will collect certain information from you that we use to calculate your anticipated optimal after-tax yield. Specifically, Titan will consider your (1) state of residence, (2) adjusted gross income (or “taxable income”), (3) whether you file jointly with a spouse, (4) your household adjusted gross income (if filing jointly), (5) the Advisory Fee charged on your Smart Treasury, and (6) the amount of your investment (collectively your “Tax Inputs”). 

Tax Logic Limitations

Titan will not consider other factors that may provide a more accurate after-tax yield for you, including: (1) deductions, (2) tax credits, (3) your specific tax obligations including any dependents, (4) your local or municipal tax liabilities, or (5) the potential that any yield earned could be taxed as a capital gains distribution (collectively your “Tax Input Limitations”). Titan will also not consider contemporaneous changes in tax law. Smart Treasury is only available to U.S. residents, and our tax logic assumes that you reside in the United States.

Furthermore, Titan makes the following additional assumptions in determining your anticipated best available after-tax yield that may or may not be accurate for your specific tax situation:

1. There is a 1:1 ratio between a Treasury Fund’s holding mix and its contribution to interest income. For example, if a Treasury Fund is 60% invested in U.S. government securities, such as U.S. Treasury securities, then Titan assumes for tax purposes that 60% of the anticipated income is derived from U.S. government securities. 
2. Any anticipated interest derived from a Treasury Fund’s investment in U.S. government securities is not taxable at the state level.
3. Any anticipated interest derived from a Treasury Fund’s investment in repurchase agreements is taxable at the state level.

For Treasury Funds, Smart Treasury uses the current 7-Day Yield, an annualized figure based on the average income return over the previous seven days, net of the applicable fund's expenses. The 7-Day Yield advertised for each fund does not include Titan’s Advisory Fee or Membership Fee (defined below). These yields can change frequently due to market conditions. 

It's important to know that after-tax yields are estimates and may not be accurate for all individual circumstances. Tax situations can vary significantly from person to person, and actual after-tax earnings may be higher or lower, influenced by numerous factors including the frequency of compounding, the variability of the yield, and personal tax situations. Please consult with a tax advisor for accurate information regarding your specific tax situation.

Investment Option Limitations

With Smart Treasury enabled, Titan will invest your funds into a single Treasury Fund that Titan (at its sole discretion) believes to be in your best interest after considering your Tax Inputs. Currently available investment options include, but are not limited to, (1) Schwab U.S. Treasury Money Fund (ticker symbol SNSXX) (the “Schwab Fund”), (2) Vanguard Treasury Money Market Fund (ticker symbol VUSXX) (the “Vanguard Treasury Fund”), (3) The Gabelli U.S. Treasury Money Market Fund (ticker symbol GABXX) (the “Gabelli Fund), (4) Fidelity Government Money Market Fund (ticker symbol SPAXX)(the “Fidelity Fund”), (5) JPMorgan U.S. Government Money Market Fund (ticker symbol MJGXX)(the “JPMorgan Fund”), (6) The Dreyfus Treasury Securities Cash Management Fund (ticker symbol DTJXX)(the “Dreyfus Fund”), and (7) The Vanguard Federal Money Market Fund (ticker symbol VMFXX) (the “Vanguard Money Market Fund”) (collectively, the “Treasury Funds”). Titan reserves the right to add or remove investment options at its sole discretion and without prior notice to you. 

Investment options are limited to those that are available to Titan through Apex Clearing Corporation (“Apex”), an unaffiliated SEC-registered broker-dealer and Financial Industry Regulatory Authority (“FINRA”) member, which provides brokerage related services to Titan and its clients. Apex will also provide custody, clearing, and settlement services for all investments in Titan Treasury Funds.

Titan’s Fees

Titan charges an advisory fee of 0.20% on all assets under management (“AUM”) that you hold in Smart Treasury (the “Advisory Fee”). Additionally, a Titan Membership fee of $25 per month (or $250 per year if paid upfront) will apply (the “Membership Fee”), providing clients with exclusive access to all of Titan’s investment products, additional financial planning and tracking tools, and premium concierge services. The Treasury Funds within Smart Treasury also charge expenses to cover operating costs, known as their “expense ratio.” The expense ratio of all Treasury Funds available in Smart Treasury will be charged by the fund annually, and will be deducted from the fund’s yield. All of Titan’s advertised yields are shown net of the fund’s expense ratio, but not net of Titan’s Advisory Fee or Membership Fee. This is because the payout you receive from the Treasury Funds will not be net of the Titan Advisory Fee or Membership Fee. Titan’s Advisory Fee will be automatically withdrawn from your Smart Treasury once a month by liquidating the funds needed to pay the Advisory Fee from the Treasury fund where your Smart Treasury is invested. Wherever Titan advertises “total earnings” or “pending earnings” or comparative charts against competitors, Titan’s Advisory Fee is incorporated into the calculated figure advertised, but its Membership Fee is not. 

 

Prospectuses for More Information. Please review each of the Schwab Fund prospectus, the Vanguard Treasury Fund prospectus, the Gabelli Fund prospectus, the Fidelity Fund prospectus, the JPMorgan Fund prospectus, the Vanguard Money Market Fund prospectus, and the Dreyfus Fund prospectus for a full list of risks associated with investing in the Treasury Funds, as applicable, before making any investment decision. The Treasury Fund prospectuses have been prepared exclusively by the Treasury Funds’ provider, and not by Titan, and thus Titan cannot guarantee the accuracy or completeness of the material.

Minimum Investment Amount. Each Treasury Fund has its own minimum investment. Depending on the amount of your total investment, you may or may not qualify for all Treasury Funds offered, and you may therefore receive a yield lower than the highest available yield offered through Smart Treasury. Treasury Fund yields are subject to change, sometimes daily. 

Pay-out Amount. The amount paid out in earnings from Treasury Funds may be different from the 7-day SEC yield advertised on any particular day. This is because the Treasury Funds pay yield at a rate that represents the monthly average of its 7-Day yields over the course of a calendar month. The 7-Day yields are calculated and distributed exclusively by each Treasury Fund, and not by Titan, and thus Titan cannot guarantee the accuracy or completeness of the data. The earnings you receive from the Treasury Funds will not be net of Titan’s Advisory Fee or Membership Fee. 

Record Date and Re-allocation. Each Treasury Fund has a different record date and a corresponding date when earnings are paid to investors. When your funds have been invested in a Treasury Fund as part of Smart Treasury, your Smart Treasury homepage will reflect the estimated yield payment date for the fund in which you are invested. Please note that if Titan re-allocates your funds to a different Treasury Fund, your record date and payment date will change. You authorize Titan to move your funds to a higher yielding Treasury Fund to enable a higher after tax rate when (1) rates change, (2) your Tax Inputs change, (3) your aggregate investment amount changes, and/or (4) any other time when Titan determines that re-allocation is in your best interest. 

State Requirements. Only income derived from U.S. obligations is tax exempt. The only way for a Treasury Fund to be 100% tax-free at the state level is if the Treasury Fund is 100% invested in U.S. obligations. Most states provide tax-free treatment for the portion of income within the Treasury Fund derived from U.S. obligations. As of June 29, 2023, California, Connecticut, and New York, require a Treasury Fund to hold at least 50% of its assets invested in U.S. Obligations at the end of each quarter for the income from those investments to be exempt from the state's income tax. Any tax benefit discussed above therefore may not be applicable in these states if the percentage falls below the 50% threshold at any time during the year. The tax treatment of the income from your Treasury Funds, therefore, depends on a number of factors, including both the state where you reside and the specific composition of the Treasury Fund's assets. Any tax benefits discussed above therefore may not be applicable in certain states, including currently California, Connecticut and New York, if the percentage falls below the 50% threshold at any time during the year.

SIPC Insurance. Investments in a Treasury Fund are held in a brokerage account. Brokerage accounts are SIPC insured in the event of a brokerage firm failure. SIPC insurance provides coverage up to $500,000 for securities and cash held in a brokerage account, with a maximum of $250,000 for cash. This insurance does not protect against market losses, and does not guarantee investment value. For more details, visit www.sipc.org.

Hypothetical Examples. When Titan advertises a hypothetical example of a general comparison of estimated after-tax yields and annual after-tax earnings between the 7-Day Yield of a Treasury Fund and a competitor's product, including those that offer an Annual Percentage Yield (“APY”), the estimation is not a guarantee. The estimations assume certain tax rates and financial circumstances that do not apply to every individual. The exact figures depend on a multitude of factors including federal and state tax rates, and the individual's income and tax filing status. The figures presented in any example are based on assumptions and may not apply to all individual circumstances. Actual after-tax earnings may be higher or lower, depending on numerous factors including the frequency of compounding, variability of the yield, and individual tax situations. We describe the specific assumptions we are making whenever we present hypothetical examples so be sure and read them carefully to determine whether they may or may not apply in your case. 

Any calculated earnings figures provided by Titan for Smart Treasury are shown inclusive of Titan’s Advisory Fee for purposes of comparison, but are not inclusive of Titan’s Membership Fee.

The after-tax estimations for our Treasury Funds assume that the current 7-Day Yield remains constant for a year, which may not reflect actual earnings due to the fluctuating nature of the 7-Day Yield. Our Treasury Funds' after-tax estimations consider the percentage of a Treasury Fund's holdings in U.S. debt obligations. According to some state tax laws, a fund may qualify for a state tax exemption on a portion of the dividends received, which are attributable to interest earned by the fund on obligations subject to federal income tax, but exempt from state income tax. The yields shown for some third-party products being compared to Smart Treasury that represent their Annual Percentage Yield (“APY”) offerings reflect the total amount of interest paid on an account, considering the effects of compounding.

The Treasury Fund options available in Smart Treasury and the different financial products that Smart Treasury may compare itself to have distinct characteristics, each with inherent differences and risk profiles. Smart Treasury is held in a brokerage account and is not insured by the FDIC, making it subject to market risk and potential loss of principal. When comparing Smart Treasury to High Yield Savings Accounts (“HYSAs”), please understand that HYSAs are FDIC insured, providing protection against bank failure. High Yield Cash Accounts may also be FDIC insured, depending on the provider.

Treasury Funds are securities and subject to regular-way trade settlement periods and brokerage procedures, which can delay the availability of cash for withdrawal compared to non-securities cash/savings accounts, such as High Yield Savings Accounts. Non-securities accounts generally offer faster access to cash due to quicker liquidity and are more readily transferable to your bank account. Please keep these differences in mind when determining the best option for managing your short-term liquidity needs.

Additional Disclosures. By enabling Smart Treasury, you acknowledge that you have received and read the Titan Treasury Disclosures in their entirety. If you have any questions, or need more information about how Smart Treasury works with the Treasury Funds available on Titan, you can send us an in app message or contact our support team at support@titan.com.

Titan's Discretionary Authority 

Titan maintains discretionary authority to manage your assets. This includes the ability to move your Smart Treasury funds between investment options at our discretion, based on our assessment of your Tax Inputs, market conditions, and other relevant factors. This discretionary authority is exercised in accordance with Titan’s fiduciary obligations to act in your best interest. We encourage you to regularly review your account, and to contact us with any questions or concerns.

In determining where to invest your funds when Smart Treasury is enabled in an individual investment account, Titan will consider (1) the then current 7-day SEC yield for the Treasury Funds offered on Titan, (2) your Tax Inputs, and (3) the aggregate dollar amount of your investment in Titan Treasury. Titan will then determine the investment that is anticipated to earn you the highest after-tax yield. Treasury Fund yield is paid out based on a monthly average, and is not paid at the rate of any given day’s 7-day SEC yield. Titan’s allocation is only an estimate of potential tax savings, and is based on the Tax Inputs you have provided. It is your responsibility to regularly update your Tax Inputs to ensure accuracy.

Titan will not consider your Tax Inputs when Smart Treasury is enabled on a Titan Individual Retirement Account (“IRA”) because of the tax-advantaged nature of IRAs. All of the other considerations above will apply when Smart Treasury is enabled on an IRA. Additionally, If you reside in a state without state income tax, the advantages of after-tax yield optimization are less relevant to your situation, and Titan will consider that in allocating your funds. 

Titan will scan its available Treasury Funds offering on a daily basis to determine whether you are allocated into the option that is in your best interest. We will also scan your account daily for any changes you have made to your Tax Inputs or investment amount. While rates and account information are monitored daily, Titan makes trades on your account during the U.S. Stock Market trading hours. Implementation of yield optimization modifications to your investments in Smart Treasury may take several days, and could be delayed for security, business, operational or other reasons.

Reinvestment of Yield 

Any yield earned from Treasury Funds will be reinvested, and will be visible in your account. If you have Smart Treasury enabled, yield earnings will be reinvested into the Treasury Fund where your Smart Treasury investment is held.

Additional Disclosures 

While Titan can provide general information and guidance, any information provided should not be taken as tax advice as Titan is not a tax professional. Titan strongly recommends consulting with a qualified tax professional for personalized advice on your specific tax situation and compliance with tax laws. You are responsible for how transactions conducted in your account are reported to the IRS, or any other tax authority, on your personal tax return. Titan assumes no responsibility for the tax consequences to any client of any transaction associated with Smart Treasury. Tax regulations can vary depending on your jurisdiction and individual circumstances. Investments in securities and other financial products may have tax implications. Income from investments can be subject to taxation based on factors such as tax bracket, holding period, and local laws. Investors are responsible for understanding and fulfilling their tax obligations, including reporting taxable income and complying with tax laws. Certain investments may offer tax-efficient features, but tax efficiency is not guaranteed and can vary based on factors like changing laws and individual circumstances. Tax laws are subject to change, which can impact investment taxation. Stay informed about potential changes and consult a qualified tax professional for guidance.

Please be aware that if you enable Smart Treasury and later choose to disable it, your money will remain invested in the option it was in at the time of disabling. It will not be automatically moved or reallocated unless you take further action to withdraw or liquidate your investment.

Nothing in this disclosure should be construed as a recommendation to buy or sell securities. Past performance (and past yield) is not a guarantee of future yield or return. All investments involve risk, and you could lose money.

Estimated Accrued Interest Calculator 

On your Smart Treasury page, you will see a section titled “Interest Pending” or “Pending Earnings.” The dollar amount shown represents Titan’s pre-tax estimate of the interest that has accrued from the Treasury Funds within Smart Treasury from the beginning of the Treasury Fund’s interest accrual cycle through the current date, and is updated daily. In making this estimate, Titan assumes that the 7-Day SEC yield shown for one of our offered Treasury Funds has remained constant throughout the current interest accrual cycle. Yield is actually subject to change and will fluctuate, sometimes daily. Actual yield payout is calculated based on the average 7-day yield of the previous month. Due to the nature of these estimates and factors beyond our control, such as changes in market conditions, the income payout you receive will differ from Titan’s estimate.

Equivalent Yield 

When Titan refers to “Equivalent Yield,” it is our term for what is traditionally known as the Tax-Equivalent Yield. It’s an estimate based on information we have about the federal and state tax characteristics of the income from our Treasury Funds; it does not take into account local tax characteristics. The Equivalent Yield is a comparative metric that helps you understand the pre-tax yield that a taxable investment, such as a Cash Sweep offering with APY, would need to yield in order to match the after-tax yield. In other words, its purpose is to give you an ‘apples-to-apples’ comparison between the after-tax yield of the portion of the income distributed from our Treasury Funds that is tax advantaged and the pre-tax yield of income from an investment without tax advantages. We consider the Equivalent Yield for taxable accounts only. If you are investing through an Individual Retirement Account, Smart Treasury optimizes for the pre-tax yield instead of the Equivalent Yield as these types of accounts are tax-advantaged and have different tax implications.

The calculation considers your adjusted gross income (or “taxable income”), state of residence, and the tax filing status that you provided. It does not take into account other factors that may provide a more accurate after-tax yield for you, including deductions, credits, your specific tax obligations, or changes in tax laws. Some of the income from the Treasury Funds may not be subject to state income taxes, dependent on the portion of the distributions being derived from U.S. debt obligations.

Please be aware that the Equivalent Yield is not a measure of actual income that you will receive. Rather, it is a comparative metric that helps you understand the potential impact of federal and state taxes on your income from investments. The Equivalent Yield calculation does not guarantee any specific yield or earnings from your investments. The actual yield that you receive will depend on a variety of factors, including market conditions, the performance of the specific investments, and the timing of your investment transactions. We encourage all clients to consider these factors.

The Equivalent Yield calculation is an estimate and should not be considered tax advice. Tax consequences can vary based on several circumstances, including your income, your place of residence, and the specific timing of your investments. We are not tax professionals and we strongly recommend consulting with a qualified tax professional for a complete understanding of your potential tax implications, personalized advice on your specific tax situation, and compliance with tax laws.