Product Compensation Disclosure
H. Beck, Inc. (“HBI”) offers a variety of mutual funds, insurance, investment advisory and alternative investment products to its clients. Pursuant to HBI’s Strategic Partner Program, the firm receives compensation called “revenue sharing” from some of the companies that distribute such products (“product sponsors” and their affiliates). Such revenue sharing compensation is in addition to typical sales-based compensation such as loads, commissions and premiums; 12b-1 fees, and other asset-based fees and expenses – all of which are borne by the investor. By contrast, revenue sharing payments are paid directly to HBI by the product sponsor or its affiliates.
In addition to revenue sharing compensation which is typically paid in the form of a percentage of initial sales of products and/or a percentage of annual assets held, HBI receives compensation in the form of flat fees for providing sponsors access to conferences and meetings (together, revenue sharing and conference fees are referred to herein as “product compensation”).
In exchange for product compensation, which may vary by sponsor, HBI provides access to the firm’s financial advisors for educational, training, and marketing support with respect to products distributed by the Strategic Partners. HBI believes that the Strategic Partner Program helps to make its financial advisors more knowledgeable about the products and therefore better able to service the needs of its clients.
From time to time, HBI also receives payments from Strategic Partners that are used to reimburse HBI’s financial advisors for expenses incurred in connection with client-related activities, including but not limited to, client seminars, client appreciation events, meet and greet events and charitable events. HBI may also receive other payments that are used to reimburse its financial advisors for expenses incurred by them, including expenses for travel, accommodations and meals while attending educational or training events. Financial advisors also may receive occasional non-cash benefits from Strategic Partners including, but not limited to, meals, entertainment and tickets to sporting events. HBI has policies that limit the type and amount of financial reimbursement and non-cash benefits that its financial advisors may receive.
HBI’s financial advisors do not receive any part of the revenue sharing payments. Nor are they compensated any more for recommending products that are part of the Strategic Partner Program. Accordingly, HBI does not believe the revenue sharing creates any incentive for its financial advisors to recommend one product over another based on the amount of compensation received by the financial advisor. Nonetheless, the educational, training and marketing activities provided by the Strategic Partners create greater visibility for their products and therefore could lead financial advisors to focus more on products from sponsors who make revenue sharing payments to HBI when recommending investments to clients – as opposed to products from sponsors that do not make such payments.
HBI does not allow the absorption of ticket charges by product sponsors and does not accept directed brokerage transactions.
Below is information about payments received during 2015 from Strategic Partners that participated in the HBI Strategic Partner Program. HBI expects to receive similar amounts from its Strategic Partners in 2016. The amounts shown below do not include reimbursement of financial advisor expenses or other noncash benefits received by HBI and/or financial advisors from Strategic Partners.
The following mutual fund families provided HBI with product compensation in the form of conference fees of up to $70,000 and an additional $10,000 of revenue sharing in 2015.
- American Funds
The following insurance companies provided HBI with product compensation in the form of conference fees of up to $70,000 and revenue sharing of up to 20 bps on sales in 2015. Revenue sharing payments of up to $70,000 may be applied to conference expenses.
- Jackson National
- Great-West Life Assurance
- Nationwide Life
- Prudential Financial
Investment Advisory Products
The following 3rd party money managers provided HBI with product compensation in the form of revenue sharing of up to 7 bps on sales and up to 4 bps on AUM in 2015. Revenue sharing payments of up to $70,000 may be applied to conference expenses.
Alternative Investment Products
The following alternative investment product sponsors provided HBI with product compensation in the form of revenue sharing of up to 50 bps on sales in 2015. Revenue sharing payments of up to $70,000 may be applied to conference expenses.
- Franklin Square
- Northstar Realty
Among the insurance products HBI distributes are variable and fixed annuity products from Minnesota Life Insurance Company and its affiliate, Securian Life Insurance Company (together “Minnesota Life”), both of which are affiliates of HBI’s parent company, Securian Financial Group, Inc. (“Securian”) HBI receives quarterly payments equal to 0.25% of the amount of purchase payments received by Minnesota Life for the sale of its annuity products through HBI.
Minnesota Life also paid $70,000 for conference expenses in 2015.
In addition to the revenue sharing described above, HBI also received product compensation from mutual fund and insurance companies, sponsors of investment advisory programs and alternative investment product sponsors in the form of flat fees for access to and participation at HBI conferences and meetings. The following firms provided HBI with such fees in amounts up to $70,000 in 2015:
Investment Advisory Products
- Brinker Capital
- CLS Investments
Alternative Investment Products
- ICON Investments
- KBS Capital Markets
For more information about the Strategic Partner Program, you may contact the HBI Compliance Department by calling our toll-free number: 1-800-333-6884.
 Sales-based compensation is disclosed in the sponsoring company’s prospectus for the specific investment.