Strategic Partners Program
Securian Financial Services, Inc. ("Securian") sells variable, fixed, and equity-indexed life and annuity products for a number of different insurance companies. These insurance companies include Securian's affiliate, Minnesota Life Insurance Company ("Minnesota Life") and Minnesota Life's subsidiary, Securian Life Insurance Company ("Securian Life"). For Minnesota Life, Securian sells variable and equity-indexed life and variable annuity products. For Securian Life, Securian sells fixed life and fixed annuity products. Securian also sells mutual funds for various mutual fund companies.
Through our Strategic Partner Program ("Program"), Securian seeks to establish additional relationships with various participating insurance and mutual fund companies ("Strategic Partners")*. In addition to customary sales commissions, Securian receives marketing support payments from such Strategic Partners whose life insurance, annuities and mutual funds Securian sells. Marketing support payments may also be called "revenue sharing." These payments may be used by Securian as general financial support to offset the costs of product management support and compliance. The actual amount received by Securian is negotiated in each case and varies by Strategic Partner. In return for marketing support payments, Strategic Partners receive visibility on Securian's internal website for representatives and assistance with coordinating access to and educational opportunities for Securian representatives. In addition, Securian and the Strategic Partners agree to provide each other periodic reports. Securian's receipt of marketing support payments creates a potential conflict of interest in the form of an additional financial benefit to Securian in connection with the sale of products from these Strategic Partners.
Marketing support payments are not made directly by you whether for mutual funds, annuities or other insurance products. Marketing support payments are paid by the Strategic Partner or by an affiliate of the Strategic Partner.
Marketing support payments are not passed on to Securian's representatives as commissions or other cash compensation. Since Securian's representatives will not directly receive a portion of any of these marketing support payments, Securian believes these financial arrangements do not create any incentives that will influence the advice your representative offers you.
*The term "partner" may mean many things, but in this context it only includes the arrangement for various participating insurance and fund companies to provide marketing support payments in exchange for certain services provided by Securian. No legal partnership or joint venture exists between Securian and Strategic Partners.
Annuity Strategic Partnerships*
In the case of variable and equity-index annuities issued by unaffiliated insurance companies, marketing support payments based on sales can range as high as 0.25 percent of your total purchase amount. If, for example, you invested $10,000 in an annuity contract through Securian, Securian could be paid up to $25 for marketing support. In addition, for invested assets that continue to be held in your annuity a year later, Securian can receive an additional payment of up to 0.10 percent annually of the dollar value. For example, on a $10,000 holding, that would be an additional $10 per year.
Securian Life, an affiliate of Securian, also provides marketing support to Securian in conjunction with the sale of Securian Life's fixed annuity products.
The current annuity issuers who are Strategic Partners and the amount of marketing support payments paid to Securian by that Strategic Partner during the previous calendar year are listed in the table at the bottom of this page.
Life Insurance Strategic Partnerships*
Marketing support payments on sales of life insurance policies are calculated as a percentage of the premium, and the percentage varies depending upon the type of product purchased and how long the policy has been in force.
Securian Life, an affiliate of Securian, also provides marketing support to Securian in conjunction with the sale of Securian Life's fixed life insurance products.
The current life insurers who are Strategic Partners and the amount of marketing support payments paid to Securian by that Strategic Partner are listed in the table appearing at the bottom of this page.
Securian's financial relationships with Minnesota Life*
Minnesota Life does not make any payments to Securian under the Program, nor does Securian receive any direct compensation from Minnesota Life when Securian sells a Minnesota Life product. Securian is reimbursed by Minnesota Life, however, for that portion of Securian's compliance-related costs attributable to Securian's sale of Minnesota Life products. In addition, Minnesota Life pays commissions in connection with such sales directly to Securian's representatives as agent for Securian. In addition to commission payments to Securian's representatives, Minnesota Life and Securian also jointly sponsor a field recognition program that provides other non-cash benefits to Securian's qualifying representatives based on sales of variable insurance products issued by both Minnesota Life and other unaffiliated life insurance companies, including paid travel and accommodations at training conferences and recognition conventions. In accordance with rules of the Financial Industry Regulatory Authority (FINRA), non-cash benefits under the program are based on the total production of each representative with respect to all variable insurance products sold through Securian, and the credit received by a representative for each variable insurance product sold is equally weighted, regardless of the issuing life insurance company. In addition, Minnesota Life provides retirement, medical and other employee benefits to qualifying Securian representatives. All of these programs are designed to encourage Securian's representatives to sell products through Securian, including Minnesota Life's products.
Mutual Fund Strategic Partnerships*
Strategic Partners pay marketing support payments to Securian for sales of mutual funds by Securian and its affiliate, CRI Securities, LLC ("CRI"). Marketing support payments are in addition to the sales charges, 12b-1 fees, and other fees and expenses charged by the mutual fund. A mutual fund's sales charges and 12b-1 fees are disclosed in the fund's prospectus fee table, as are all other charges and expenses borne by the fund and its shareholders. For additional information about these charges and expenses you should refer to the mutual fund's prospectus or statement of additional information, each of which is available on request from the mutual fund company or your representative.
The following Strategic Partners are currently participating in the Program relating to mutual funds and the table at the end of this page shows the amount of marketing support payments they have paid to Securian during the previous calendar year. The terms of the arrangements effective in 2016 are described in the footnotes to the table. In early 2017, Securian changed the terms of these agreements from sales and asset-based to flat fee arrangements. The following Strategic Partners have agreed to pay annual marketing support payments in the amount of $75,000. These payments are based on a number of factors including the quality of the relationship.
- American Funds Distributors, Inc.
- Ivy Distributors, Inc.
- Lord, Abbett & Co. LLC
Payments from third-party sponsors of investment advisory programs
Securian is also a registered investment adviser. As an investment adviser, Securian provides a variety of investment advisory services, which in some cases also include services from third-party sponsors of investment advisory programs or platforms. (In accordance with SEC regulations, each of these services is described in the applicable Securian program brochure containing the information required to be included by Part 2A of Form ADV, a copy of which may be obtained from your representative or by calling Securian at 1-800-820-4205.) Certain third-party sponsors of investment advisory programs or platforms ("Investment Advisory Sponsors") pay marketing support payments to Securian based on total assets in Securian client accounts and/or gross new contributions to Securian client accounts that are managed by Securian in connection with such Sponsor's program or platform. In exchange for such marketing support payments, Securian provides Investment Advisory Sponsors with such things as visibility on Securian's website for advisors, access to Securian's advisors, and invitations to certain conferences or meetings held by Securian. Securian's representatives do not receive any additional cash compensation as a result of Securian's receipt of these payments.
Set forth below are the third parties that are currently Investment Advisory Sponsors. The amount of marketing support payments received by Securian from such Investment Advisory Sponsors during the preceding calendar year are also listed in the table appearing at the end of this page.
AssetMark, Inc. Securian receives marketing support payments in connection with the sale and retention of assets in accounts with AssetMark, Inc. (previously known as "Genworth Financial Wealth Management"). Each year AssetMark, Inc. pays Securian an amount that varies but does not exceed the sum of 0.05% of gross contributions to investment advisory accounts sold by Securian and 0.03% of assets held by AssetMark, Inc. attributable to Securian.
SEI Investments Management Corporation. Securian receives marketing support payments in connection with the sale and retention of assets in accounts with SEI Investments Management Corporation (“SEI”). Each year SEI pays Securian an amount that varies but does not exceed the sum of 0.05% of gross contributions to investment advisory accounts sold by Securian and CRI and 0.03% of assets held by SEI attributable to Securian and CRI.
LWI Financial, Inc. Securian receives marketing support payments in connection with the sale and retention of assets in accounts with LWI Financial, Inc. ("Loring Ward"). Each quarter Loring Ward pays Securian an amount that varies but does not exceed the sum of 0.05% of gross contributions to investment advisory accounts sold by Securian and 0.03% of assets held by Loring Ward attributable to Securian.
Payments received in connection with FundVest Funds
In addition to serving as an investment adviser, Securian is the introducing broker-dealer of record for brokerage accounts established in connection with the following investment advisory programs: Portfolio Solutions I, Securian Spectrum Advisor, CRI Spectrum Advisor, Securian Spectrum Advisor Plus, Securian One, Securian Select and Select Advantage, Securian Signature, Securian Freedom, and CRI Freedom (the "IA Programs"). Approved trades in these brokerage accounts are introduced by Securian to Pershing, LLC ("Pershing"), Securian's clearing broker. Pershing (member FINRA/SIPC) is a global provider of financial business solutions to institutional and retail financial organizations and independent registered investment advisors. Pershing is a subsidiary of The Bank of New York Mellon Corporation.
Pershing makes certain mutual funds (the "FundVest Funds") available to brokerage accounts established in connection with the IA Programs. The FundVest Funds do not have transaction fees (e.g., front end sales loads or deferred sales charges), provided they are held for at least three months. If FundVest Funds are held for less than three months, Securian bears any transaction fees in those cases. Securian receives 12b-1 fees through Pershing from the FundVest Funds or other mutual funds available through this program which are in addition to the investment advisory fees Securian receives from its clients under the IA Programs. Securian also receives from Pershing 55% of the service fees (defined below) Pershing receives in connection with the sale and retention of certain FundVest Funds. These fees are paid in accordance with an asset based formula. The FundVest program is not a part of Securian's Strategic Partner Program, and Securian will not receive FundVest payments where funds participate in Securian's Strategic Partner Program.
In addition, in association with certain other FundVest Funds, Pershing will pay 15% of the service fees that Pershing receives from such FundVest Funds to Securian. “Service Fees” are fees other than Rule 12b-1 Plan Fees paid directly or indirectly by a Fund pursuant to an agreement between Pershing and the parties that distribute the funds. Service fees are paid to Pershing in exchange for Pershing's administration of the FundVest program.
Effective April 1, 2017, for Portfolio Solutions I, Securian Spectrum Advisor, CRI Spectrum Advisor, and Securian Spectrum Advisor Plus, Securian will credit back to client accounts FundVest program payments Securian receives from Pershing as a result of 12b-1 fees paid to Pershing from the FundVest funds with respect to assets held in a client's account. Securian shall retain payments of Service Fees. The Freedom programs have credited such 12b-1 fees back to client accounts since their inception.
For additional details regarding the FundVest program, please refer to pershing.com/mutual_fund.htm.
Conference sponsorships and expense reimbursements
In addition to the marketing support payments from Strategic Partners described above, from time to time Securian receives financial support or expense subsidies for the cost of conferences, meetings or other events held by Securian ("Conference Sponsorships") from various insurance companies and mutual fund companies, including companies that are Strategic Partners ("Conference Sponsors"). This financial support is usually in the form of a one-time payment applicable to a specific conference or meeting. In exchange for such Conference Sponsorships, the Conference Sponsors are given the opportunity to appear at the applicable conference or meeting, including access to representatives also in attendance. Securian's representatives do not receive any additional cash compensation as a result of Securian's receipt of these payments.
From time to time Securian also receives payments from insurance companies, mutual fund companies, and third party sponsors of investment advisory programs used to reimburse a representative for expenses incurred in connection with sales or client-related activities, including but not limited to, client seminars, client appreciation events, meet and greet events, and donations to charities or charitable events. Securian may also receive other payments from insurance companies, mutual fund companies, and third party sponsors of investment advisory programs used to reimburse representatives for expenses incurred by representatives, including expenses for travel, accommodations and meals, when attending educational or training events sponsored by such companies. Insurance companies, mutual fund companies, and third party sponsors of investment advisory programs also provide occasional non-cash benefits to representatives, including, but not limited to, meals, entertainment, and tickets to sporting events. Securian has policies that limit the type and amount of financial reimbursement and non-cash benefits that representatives may receive from insurance companies and mutual fund companies.
Non-Strategic Partner Conference Sponsors are listed at the bottom of this page.
Payments earned during preceding calendar year
The following are the current Strategic Partners and Investment Advisory Sponsors, together with the amount of marketing support earned by Securian in each case during the preceding calendar year:
|Marketing Support Payments|
Earned During 20161
|Jackson National (Annuity)||$353,893|
|Lincoln National Life (Annuity)2||$0|
|Pacific Life (Annuity & Life)3||$107,515|
|Securian Life (Annuity & Life)||$6,221|
|Mutual Fund Company|
|Investment Advisory Company|
1The amounts earned have been reported on the accrual basis in accordance with GAAP.
2Lincoln National Life became a new Strategic Partner in May 2017.
3Pacific Life includes marketing support payments from both Pacific Life & Annuity Company and Pacific Life Insurance Company.
4Transamerica includes marketing support payments from both Transamerica Life Insurance Company and Transamerica Financial Life Insurance Company.
5Prior to 2017, the amount of marketing support payments Securian received in connection with the sale and retention of American Funds' mutual funds from American Funds Distributors, Inc. (“AFD”), the principal underwriter for the American Funds, was an amount that varied but did not exceed the sum of 0.10% of the previous year's American Funds sales by Securian and 0.02% of American Funds assets attributable to Securian. A number of factors determined the actual amount, including sales by Securian, American Fund assets attributable to Securian, redemption rates, and the quality of relationships brought to AFD by Securian.
6Prior to 2017, the amount of marketing support payments Securian received in connection with the sale and retention of Ivy Funds' mutual funds from Ivy Distributors, Inc. or its affiliates was an annual amount equal to the sum of 0.05% of the average daily value of Ivy Funds mutual fund assets and .10% of the net asset value of all fund shares sold. Securian and/or its affiliated companies were also paid annual incentive compensation of between 0.05% and 0.15% depending on the level of Ivy Funds mutual fund assets held in clients' accounts.
7Prior to 2017, Securian received marketing support payments in connection with the sale and retention of Lord Abbett mutual funds from Lord Abbett Distributor LLC (“Lord Abbett”), the principal underwriter for various investment companies and series thereof that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the “Lord Abbett Funds”). Each quarter Lord Abbett paid Securian an amount that varied but did not exceed the sum of 0.05% of the previous quarter's Lord Abbett Funds sales and 0.02% of Lord Abbett Funds assets.
8Putnam Funds ceased being a Strategic Partner in December of 2016.
The following were non-Strategic Partner Conference Sponsors during the preceding calendar year:
- Minnesota Life Insurance Company
- Homestead Funds
The amounts shown in the table above do not include amounts received by Securian from Conference Sponsors or amounts received by Securian as reimbursement for expenses incurred by representatives in connection with sales or client-related activities or attendance at training or educational meetings.