Important information regarding PACE

Please be sure to read the PACE Investment Advisory Agreement carefully before investing. PACE is a mutual fund asset allocation program in which the ongoing advice of a Financial Advisor is one of the key components and services provided. In selecting PACE, clients should consider that it is intended for investors who (i) establish a disciplined asset allocation strategy, (ii) seek and value the ongoing advice of a professional financial advisor but retain discretion over the trading activity in their account, (iii) are looking to implement a medium to long term investment plan and avail themselves of program features like periodic rebalancing, automatic distributions and redemptions; and (iv) prefer consistency of costs and aligning of interests with their Financial Advisor. Product mix is another consideration clients should take into account. For example, while mutual funds in PACE are traded at Net Asset Value (NAV) with no sales load charged, if clients would qualify for breakpoint discounts in a commission based account, invest within a single mutual fund firm and do not use any of the automatic services available in PACE, purchasing those funds in a commission based account may be a more cost efficient option. PACE is not appropriate for clients who maintain consistently high levels of cash or money market funds. Note: Clients may buy and hold non-PACE assets in the same account that holds their PACE investment. Neither UBS Financial Services nor its Financial Advisors act as investment advisors with respect to, or exercise investment discretion over, these other assets. We will effect transactions for clients in these non-PACE assets at the clients' direction and in our capacity as a broker-dealer, for our customary fees and commissions. The PACE program fee does not apply to these other assets and transactions. Non-PACE assets are not included in the Quarterly Portfolio Review but will be included in account statements. Mutual funds pay annual operating expenses out of the assets of the funds for management of assets, distribution of services and other expenses ("annual operating expenses"). A portion of these annual operating expenses is paid to UBS Financial Services Inc. in exchange for distribution services. Annual operating expenses vary among mutual funds and are described in detail in the prospectus for each mutual fund. These annual operating expenses are in additional to the PACE program fee. The mutual funds available through PACE include shares of funds that are not affiliated with UBS Financial Services Inc. and shares of the UBS PACE Money Market Fund and certain other funds advised by UBS Financial Services Inc. or its affiliates. Recommendation of proprietary of affiliated funds raises a conflict of interest as purchasing those securities will result in increased compensation to, depending on the circumstances, UBS Financial Services Inc. and/or an affiliated company in the UBS organization.

No assurance can be given that any mutual fund will achieve its investment objective. The value of a mutual fund's portfolio changes every day and can be affected by changes in interest rates, general market conditions and other political, social and economic developments that cannot be predicted. PACE, the Personalized Asset Consulting and Evaluation advisory service program, is managed by UBS Financial Services Inc. The PACE Select Advisors Portfolios are managed by investment advisors chosen by UBS Asset Management (Americas) Inc. UBS Financial Services Inc. and UBS Asset Management (Americas) Inc. are both subsidiaries of UBS AG.

Investor suitability/concerns for ACCESS accounts
ACCESS accounts may be appropriate for investors seeking long-term goals. Equities and fixed income instruments are subject to market risk and will undergo price fluctuations in which downward and upward trends may occur over short or extended periods. The principal value of fixed income instruments may fluctuate due to interest rate changes and other factors. Equity securities, historically, have shown greater growth potential than other types of securities, but they have also shown greater volatility. Small cap portfolios may be highly volatile because the earnings and business prospects typically fluctuate more than larger cap companies. International portfolios involve considerations and potential risks not typically associated with domestic securities, including risks associated with changes in currency values, economic, political and social conditions, loss of market liquidity, the regulatory environment of the countries in which the manager invests, and difficulties in receiving current or accurate information. Please refer to the Disclosure Brochure for the ACCESS program for more information. There are fees associated with investing in Separately Managed Accounts, for more information, please refer to the account program form ADV disclosure brochure or contact your UBS Financial Advisor.

Important information about Strategic Advisor
UBS Strategic Advisor is an advisory program in which the ongoing advice of your Financial Advisor is one of the key components and services provided. In selecting UBS Strategic Advisor, you should consider that it is intended for investors who: (i) establish strategic investment goals; (ii) seek and value the ongoing advice of a professional financial advisor but retain discretion over the trading activity in their account; (iii) are looking to implement a medium- to long-term investment plan; and (iv) prefer consistency of costs and aligning of interests with their Financial Advisor. Product mix is another consideration you should make. For example, mutual funds in UBS Strategic Advisor are purchased at NAV with no sales load charged; however, if you would qualify for breakpoint discounts in a commission-based account, purchasing those funds in a commission-based account may be a more cost-efficient option.

Important information regarding Portfolio Management Program
For a more complete discussion on terms and conditions of the UBS Portfolio Management Program, please see the Portfolio Management Program Account Application and Agreement and Form ADV Disclosure Brochure and contact your Financial Advisor.

It is important that you carefully read the agreements and disclosures that we provide to you about the products or services we offer. While we strive to ensure the nature of our services is clear in the materials we publish, if at any time you seek clarification on the nature of your accounts or the services you receive, please speak with your Financial Advisor or call 201-352-9999.