At PlanMember Securities Corporation (PSEC), we strive to provide to you a wide array of suitable investment products and objective investment advice to assist you in retiring well. There are inherent in any recommendations, however, the potential for conflicts of interest. This conflict can come from the compensation our registered representatives may receive on specific investments or advisory services that they recommend to you, or it may come from payments that PSEC may receive from third party providers as a result of your purchase of products, advisory or retirement plan services. These payments are negotiated and may be based on such factors as the number or value of shares that PSEC sells or may sell; the value of client assets invested; or the type and nature of services or support furnished by PSEC and its affiliates. These payments may be in addition to payments made by the product sponsors to PSEC or its affiliates under the Rule 12b-1 Plan and/or Service Fees arrangement.
It is important for you to be aware of and understand these potential conflicts of interest so that you may make an informed decision to permit PSEC to serve your investment needs. We will describe for you here some of the compensation factors that may affect your registered representative’s recommendations or PSEC’s decision as to the products and services that we offer. Should you have any questions about this information, please contact your PSEC registered representative.
Product and Pricing Choice. PSEC’s product sponsors have been chosen based on their ability to offer products that meet the financial needs of our clients. With the ever expanding array of products and services available to clients, and the complexity associated with many of today’s product choices, it is important for clients to work with a registered representative. PSEC registered representatives are dedicated to assisting you in finding the right investment product. PSEC has limited the product choices and product sponsors available to you and our registered representatives so that we can better prepare our registered representatives with product knowledge and information to better serve you.
Products and Services Compensation. As a registered broker dealer, PSEC receives compensation in the form of commissions or concessions as described in a prospectus for the sale of securities, such as mutual funds or variable annuities. As a registered investment adviser, PSEC retains a portion of the advisory fees paid by the advisory client for PSEC’s advisory services and may also shares in the advisory fee (a solicitor fee) paid by the advisory client to outside advisory services. Overall, compensation to PSEC as a result of your investments with PSEC may be in the form of commissions, concessions, advisory fees, distribution fees (also referred to as servicing or 12b-1 fees) and persistency fees.
Additionally, PSEC and its affiliate PlanMember Services Corporation, a registered transfer agent, may receive marketing and administrative fees with respect to funds utilized in the Optifund Investment Selections, to compensate PlanMember for providing marketing, administrative and sub-accounting services. In some cases (i.e., 12b-1 fees), the fees will be paid by the fund; in other cases, the fees will be paid by the fund’s investment adviser or its affiliates from their own profits and other resources, not by the fund.
Compensating Sponsors. PSEC and PSC receive compensation from certain product sponsors over and above published commission schedules, advisory fees and concessions as described in a prospectus. This compensation may be paid for services we provide to the product sponsor or they may be paid to PSEC in order to provide sales and marketing support. This additional compensation may be received as a flat dollar amount or an amount based on sales or total dollar amount of investors’ assets, is called “Additional Compensation.” Product sponsors who pay PSEC Additional Compensation are considered PSEC’s “compensating sponsors.” PSEC does not receive Additional Compensation payments from any other product sponsor not listed below as a compensating sponsor:
Security Benefit Life
Source of Compensation. Most additional compensation payments are paid to PSEC out of the revenues of the sponsoring fund or insurance company and are NOT paid out of fund assets. Certain insurance companies or entities through which PSEC places insurance business pay compensation that is based in part on factors such as total deposits, assets or premium volume and persistency or profitability of the business sold by PSEC’s registered representatives. Because additional compensation received by PSEC may benefit PSEC or its registered representatives financially, it may be deemed a potential financial conflict of interest when working with our investors.
Types and Amounts of Additional Compensation
• Administrative fees for such services as record-keeping or networking arrangements;
• Sponsorship Fees paid by product sponsors and Investment Advisors for PSEC sponsored sales events, paid in the form of cash or expense reimbursement, for sales meetings, seminars and conferences;
• Additional Marketing and Sales Support Compensation received either in the form of a flat dollar amount, total sales transacted, or total assets held on behalf of PSEC investors;
• Reimbursement of approved expenses incurred by registered representatives or PSEC employees for attendance at educational meetings held by the compensating sponsor at pre-approved locations, or reimbursement of general mailings, client or prospective client appreciation meetings or seminars where the compensating sponsor has agreed to contribute toward the expense;
• Advisory Program Fees and/or Solicitor Fees received from outside investment advisors whose products PSEC offers to clients.
Differential Compensation. With respect to commissions and advisory fees received, PSEC pays each registered representative an assigned payout rate. PSEC does not offer differential commission payouts based upon the specific product or the sponsor of the product.
With respect to distribution and servicing fees, the fees received by PSEC generally range from 0.10 % to 1.00 % annually of the net asset value of the client’s assets. This fee is typically an ongoing fee that is paid to PSEC by the product sponsor in addition to the commission and/or advisory fee received. However, PSEC does not offer differential servicing fee payouts based on specific product or the sponsor of the product.
Sales Contests. PSEC also offers sales contests to its registered representatives that provide additional incentives. PSEC may offer contests throughout the year that will be limited to those accounts on PSEC’s custodial retirement plan platform and PSEC’s consolidated statement service for non-retirement accounts. In offering a contest only on sales on these platforms, PSEC may offer sales contests that may provide the registered representative with an incentive to offer the products or services of only those product sponsors that are approved for sale through these platforms.
PSEC includes in the contest all approved products on the platform and does not restrict these contests to compensating sponsors only. Top PSEC registered representative achievers in these contests may receive PSEC sponsored trips, cash prizes, bonus commissions, loan forgiveness, product fee waivers, differential compensation or other nominal non-cash prizes. All contests are across the entire product line available on the platform. NO contest is offered which will award the registered representative based upon the specific product being sold to one product sponsor over another. PSEC will not accept any business that is not deemed suitable for the investor.
Retirement Plan Custodial Services. PlanMember Services Corporation, PSEC affiliate and agent, also receives compensation as administrative agent for the custodian of PSEC sponsored custodial retirement programs (403(b) plans, 457 plans, and IRAs). Consequently, may have an incentive to encourage PSEC’s registered representatives to utilize its retirement plan custodial service over another retirement plan custodial service.
PlanMember Securities Corporation
6187 Carpinteria Ave.
Carpinteria, California 93013
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