Prentiss Smith & Co. Brochure

What future do you want to support?

Invest in a sustainable future for people and planet, while pursuing your most important financial goals.

Prentiss Smith & Co. | Brattleboro, VT | Philadelphia, PA | 800.223.7851 | 802.254.2913 | ​info@prentiss-smith.com

Most of us have been taught to express our social and environmental goals through politics or philanthropy—not through our personal financial decisions.

But you vote with your money every day.

We help you pursue both your financial goals and your values, without making you choose between them.

By the numbers We were founded by Prentiss C. Smith in 1982 as an early firm to practice socially responsible investment management. Since then, we’ve succeeded and grown while continuing to prioritize our clients’ values.

In 2017, Prentiss R. Smith became President, after more than fifteen years with the firm.

ASSETS UNDER MANAGEMENT

INVESTMENT CLIENTS

YEARS IN BUSINESS

$450m

320+

38+

Our assets under management allow us to pair the scale of a large adviser with the personal attention of a small firm.

Our clients are both individuals and institutions who combine high standards in financial management with forward-looking social and environmental values.

Begun in 1982 with investments of just $920K, we’ve experienced decades of steady growth and selective expansion of our client base.

INDEPENDENT RESEARCH

AVG. CLIENT RELATIONSHIP

AVG. TEAM MEMBER EXPERIENCE

100%

15 years

15 years

We conduct a rigorous, data-driven assessment of every individual company or bond we invest in. For maximum transparency, and to save clients on fees, we avoid investing in funds.

With an average client relationship length of 15 years, we also frequently serve families across multiple generations.

Our highly valued, specialized team brings long-term stability: of those at the firm over the last five years, the average employment tenure is a full 15 years.1

By the issues We prioritize urgent social and environmental issues when investing and engaging with companies.

In our experience, this form of activism can be quite effective. At the same time, we believe that institutions with a sustainable bottom line are better positioned for long-term financial growth.

Climate Change

Environmental Stewardship​

Human Rights

Corporate Citizenship

Diversity, Equity, Inclusion and Justice​

Prentiss Smith & Co. | Brattleboro, VT | Philadelphia, PA | 800.223.7851 | 802.254.2913 | ​info@prentiss-smith.com

Our Environmental, Social and Governance (ESG) Performance DIVESTMENT We commit to remaining fully and permanently divested from several industries.

NO Oil, Gas & Coal

NO Precious Metals Mining

NO Private Prisons

NO Casinos and Gambling

NO Defense and Weapons

NO Tobacco

Fossil fuel-free investment since 2011.

NO Crop Chemicals and Fertilizers

ESG RESEARCH We use hundreds of data sources and our own qualitative research to seek out and invest in corporations that are leading the way for change.

Sample pages from one of the ESG research profiles we produce for every major holding.

ACTIVISM & ENGAGEMENT In addition to our conscientious environmental, social and governance standards, we engage frequently with invested companies to push for even more progress.

On behalf of our clients, we vote client shares at every annual meeting. Our voting record includes an extremely high 40% dissension rate compared to Board recommendations.2 We are at the forefront of a shareholder movement to use our votes on individual Board members to promote board diversity.

We are currently in direct dialogues with companies on the following issues Climate Change & Risk Management

Financing for Firearms & Prisons

Climate Change & Sustainability Reporting

Good Governance

Deforestation Diversity, Equity, Inclusion & Justice

Green Fleets

Our Financial Performance Balanced Growth Composite3 2003–2020 $4,000

$3,000

$2,000

$1,000

Balanced Growth Composite Annualized Rate of Return3 2003–2020 1 Year Balanced Growth Composite

16.19%

5 Year

9.43%

10 Year

8.50%

20 20

19 20

18 20

17 20

16 20

20

20

15

14

13 20

12 20

11 20

10 20

20

09

08 20

07 20

06 20

05 20

04 20

20

03

$0

The Balanced Growth Composite includes all eligible accounts that conform to a particular investment style, namely, clients who expressed

Since Inception*

some degree of risk tolerance and growth orientation leading to targeted stock exposure of at least 55% of the

8.01%

account. Performance shown is inclusive of investments in stocks, bonds, money market funds and cash.3

*The inception date is January 1, 2003.

WHAT THE EXPERTS SAY FROM MORNINGSTAR

FROM MORGAN STANLEY

FROM OXFORD UNIVERSITY

A Morningstar study of ESG vs non-

A recent Morgan Stanley study

An earlier study by Oxford University

ESG investment strategies found

comparing ESG vs traditional funds

reviewed more than 200 sources and

that the majority of ESG strategies

from 2004-2018 concluded there is

found that “80 percent...demonstrate

outperformed their non-ESG peers

“no financial trade-off in the returns

that prudent sustainability practices

over 5 and 10 year horizons.4

of sustainable funds compared to

have a positive influence on

traditional funds, and they

investment performance.”6

demonstrate lower downside risk.”

5

Prentiss Smith & Co. | Brattleboro, VT | Philadelphia, PA | 800.223.7851 | 802.254.2913 | i​nfo@prentiss-smith.com

Common Questions What minimum investment do I need to start working with Prentiss Smith & Co? As part of our commitment to making our services as accessible as possible, our minimum investment for non-accredited investors is $250,000. Because this minimum can change over time and may depend on your specific circumstances, we encourage you to call us to discuss whether we would be a fit for your situation.

What are your fees?

Our management fee starts at 0.75% annually, but can be lower at larger account sizes. Our fee is inclusive of all meetings, account reviews, reporting, and other activity associated with delivering you the highest possible level of service. To meet our rigorous financial and ESG standards, and to avoid the associated fees for clients, we avoid buying mutual funds.

What kinds of accounts do you take on?

We can typically take over management of existing investment accounts, cash or savings accounts, 401(k)s, IRAs, Roth IRAs, or other retirement accounts that are not managed by your current employer, and other non-taxable accounts. If you have more detailed questions about a specific account type, please ask us.

What kinds of investments do you make?

As investment managers, we invest in publicly traded stocks and bonds, with some allocation to money market accounts and other federally insured investment vehicles. Our selection of investments is made through a rigorous screening process, to identify companies that align with our high financial and ESG standards. To meet these standards and avoid associated fees for clients, we avoid buying mutual funds.

How do you decide what to buy for my account?

Your allocation of the investments described above will depend on several factors, including your investment horizon (e.g. how long until you expect to use your money for retirement or other purposes), and your tolerance for risk.

How much personal attention will I get with Prentiss Smith & Company?

We welcome and encourage conversations to learn how we can help you with your unique circumstances.

The more information you provide us, the better prepared we are to make responsible investment decisions that align with your needs and values. We are a client-centric company; we never simply put you in a fund or automate our interactions with you.

What to Expect When Getting Started COMMITMENT-FREE CONSULTATIONS Until you initiate a transfer of account(s) to our management, our conversations are always commitment-free and confidential.

We understand that choosing an investment advisor is an important decision, and we’re here to learn about your financial situation, answer questions, and provide what you need to make the decision that’s right for you.

WE DO THE LEGWORK When you’re ready to get started, we’ll work with you to gather the information we need about your existing accounts and handle as much of the paperwork as we can, to make the transfer process as seamless as possible for you.

TRUSTED CUSTODIANSHIP As investment advisers, we manage your Prentiss Smith & Company portfolio with a qualified outside brokerage, or custodian. The majority of our clients use Charles Schwab and Company, but we also work with a variety of other custodians.

This choice is client-directed.

CARE WITH EXISTING ASSETS We review the assets you transfer to us in detail, and share our recommendations with you. Any sales will be carefully timed and will take into consideration your level of tax sensitivity.7

REGULAR COMMUNICATION As a client with Prentiss Smith & Company, you’ll receive quarterly statements that include detailed information regarding your portfolio and its performance. These statements will be accompanied by a quarterly Strategy Update, featuring a reflection on current market conditions and how we as investment managers are responding to them. In addition, you’ll receive trade confirmations and monthly statements from your custodian, and have the option of subscribing to our monthly newsletter on ESG issues.

Prentiss Smith & Co. | Brattleboro, VT | Philadelphia, PA | 800.223.7851 | 802.254.2913 | ​info@prentiss-smith.com

1. Based on full-time, salaried employees. Excludes those hired since 2019.

2. Based on all proxy votes cast by our firm from November 2019 through October 2020, with each vote for or against an individual board member tallied separately.

3. The group of clients that make up our Balanced Growth Composite are all eligible accounts that conform to a particular investment style, namely, clients who expressed some degree of risk tolerance and growth orientation that led to targeted stock exposure of at least 55% of the account. The performance figures are dollar weighted, which gives more impact to larger accounts in the composite. An eligible account must have been under our management for two full quarters, pay fees directly from their account, and not have substantial restrictions or directives that impact our management style.

Performance results are net-of-fees and reflect the reinvestment of dividends and capital gains. Actual fees may vary based on, among other factors, account size and custodial relationship. No current or prospective client should assume future performance of any specific investment strategy will be profitable or equal to past performance levels. Changes in investment strategies, contributions or withdrawals may cause the performance results of a client’s investment portfolio to differ materially from the reported composite performance. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.

Prentiss Smith and Company, Inc. is an SEC-registered Investment Adviser located in Brattleboro, VT. SEC registration does not denote SEC endorsement, nor does it indicate the attainment of a particular level of skill or ability.

Additional information about the firm can be found on its Form ADV, available by request and/or at www.adviserinfo.sec.gov. This is neither a solicitation nor an offer to sell any securities.

4. ​How Does European Sustainable Funds’ Performance Measure Up?​is a 2020 report by Morningstar that “measure[d] the performance of sustainable openend and exchange-traded funds versus traditional peers in seven popular Morningstar Categories.” The report looked at “nearly 4,900 funds domiciled in Europe, including 745 sustainable open-end and exchange-traded funds” and “compare[d] average returns among the sustainable and traditional fund cohorts over the past one, three, five, and 10 years through December 2019.”

See: https://www.morningstar.com/content/dam/marketing/emea/shared/ guides/ESG_Fund_Performance_202 0.pdf 5. ​Sustainable Reality: Analyzing Risks and Returns of Sustainable Funds​is a 2019 white paper by the Morgan Stanley Institute for Sustainable Investing that ​compared “the performance of sustainable funds to traditional funds from 2004 to 2018 using Morningstar data on exchange-traded and open-ended mutual funds active in any given year of this period. A total of 10,723 funds were analyzed.” The institute “compared their performance on total returns, a measure of performance-net-of-fees, and downside deviation, a measure of risk.” See: https://www.morganstanley.com/pub/content/dam/msdotcom/ ideas/sustainable-investing-offers-financial-performance-lowered-risk/ Sustainable_Reality_Analyzing_Risk_and_Returns_of_Sustainable_Funds.pdf 6. ​From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance​is a 2015 meta-study by the University of Oxford and Arabesque Partners that used more than 200 academic studies and sources on sustainability to assess the business case for corporate sustainability, for incorporating sustainability into investment decisions, and for implementing active ownership in stock portfolios. See: https://www.smithschool.ox.ac.uk/ publications/reports/SSEE_Arabesque_Paper_16Sept14.pdf 7. ​Prentiss Smith & Co. does not provide tax advice, so we encourage you to consult with your professional tax advisor(s) such as your CPA or tax attorney, in conjunction with our financial advice.

Photos courtesy of Kevin Armstrong / Images of Vermont.

“

I learned this, at least, by my experiment; that if one advances confidently in the direction of [ your] endeavors to live the life [ you have] imagined, [ you] will meet with a success unexpected in common hours.”

-HENRY DAVID THOREAU