The Role of M&T Securities, Inc. With the vast number of financial instruments available in the marketplace today, it can be a challenge for investors to find the right investment vehicles to meet their needs. M&T Securities, Inc. (“MTS”) and its registered representatives are committed to assisting you make decisions that will help you meet your investment goals. To serve you, MTS has entered into selling agreements with a broad selection of mutual fund families and with insurance companies who issue annuities and insurance products.1
As an independent insurance agency, MTS may have access to more than one insurance company to place insurance coverage for you. When acting as an independent insurance agent, MTS has certain obligations to you as the purchaser and certain obligations to the insurance company as determined by law. MTS may also have the authority to obligate the insurance company on your behalf and as a result MTS may be required to act within the scope of its contractual agreement with the company. MTS’s ethical requirement is to always act honestly, to place your needs as purchaser above any of its own interests and to fulfill the obligations it has to both you and the insurance company.
M&T Securities, Inc. Approved Providers. MTS has selected “approved providers” from among the many companies with which it has selling agreements. We believe the selection of financial products offered by these approved providers can help meet a wide variety of investment objectives and enable customers to diversify their portfolios, both at the time of initial purchase and as their investment needs change.
Approved provider funds families and insurance companies receive greater access to our registered representatives to provide training, marketing support and educational presentations. We believe that focusing our training and product support efforts on approved products, allows our registered representatives to gain a more comprehensive understanding of the investment objectives and features of these products, which, in turn, enables them to better serve our customers. MTS registered representatives are not obligated to recommend approved products; they do not receive additional compensation if they do; and you do not pay any additional or special charges. However, the greater access given approved providers may lead our registered representatives to focus on approved provider products when making recommendations to our customers, instead of on the products of other companies that are not given the same access.
Compensation for M&T Securities and It’s Registered Representatives
Compensation to MTS. MTS is compensated when you buy a mutual fund, annuity, or insurance policy through MTS. Payments from mutual funds to MTS may include sales charges or selling fees or concessions (depending on the share class in which you invest), and fees for distribution (Rule 12b-1 fees) and shareholder services. Payments from insurance companies whose annuities and insurance products we sell may include commissions, residuals or trails, and in the case of a variable annuity or variable insurance policy, fees for distribution.
The compensation paid to MTS may vary depending on a number of factors, including the annuity, insurance contract, or mutual fund and the insurer, issuer or distributor that you select, the volume of business MTS provides to the insurer, issuer, or distributor, or the profitability of the annuity, insurance policy or mutual fund that MTS provides to the insurance company, issuer or distributor.
Compensation to MTS Registered Representatives. Generally, MTS Financial Consultants receive a portion of the sales charge, selling fee or concession, and the distribution fees, paid to MTS2. The distribution fees and shareholder service fees are paid out of the assets, and are part of the expenses, of the mutual funds or the insurance separate account of the variable annuity or variable insurance policy. Fees and expenses associated with mutual funds, variable annuities, and variable insurance sub-accounts are disclosed in the prospectus for the specific investment product.
In addition to the compensation arrangements described above, MTS seeks to collect supplemental payments from approved providers which are used primarily to help pay the significant costs we incur to educate our registered representatives about approved investment and insurance products, and to service our clients who purchase these products, to offer customer seminars, to support marketing efforts, and to help pay the firm’s general operating expenses. The supplemental payments MTS receives for these activities are calculated in different ways by the different approved providers, and vary by provider. These payments may take the form of asset-based fees, sales-based fees, expense reimbursement, administrative or record keeping fees. For instance, sales-based fees are calculated as a percentage of the fund family or insurance company’s gross sales through MTS and currently range as high as 0.25% (one-quarter of 1%) of fund sales or insurance contract sales (or $25 for each $10,000 in sales) or as high as 0.50% (one-half of 1%) of annuity sales (or $50 for each $10,000 in sales). Asset-based fees are calculated as a percentage of assets managed by the approved provider for MTS customers and currently range up to 0.05% (one-twentieth of 1%) of mutual fund assets under management (or $5,000 for each $1,000,000 under management) or up to 0.03% (one thirty-third of 1%) of annuities assets under management (or $3,000 for each $1,000,000 under management).
MTS may also seek reimbursement of specific expenses we incur as a result of various registered representative meetings and conferences to which approved providers may be invited. Mutual fund families may also make payments to MTS for administrative and record keeping services of up to $10.00 per year for each fund held in a customer’s account. To the extent that any of these supplemental payments are paid by a third party, such as the sponsor, distributor or investment advisor of the fund or annuity or insurance company, and not out of fund, annuity sub-account, or insurance assets or sales charges, these amounts are not required to be included in the fund or subaccount expense tables of the prospectus.
Revenues for Additional Services to Approved Providers
M&T Bank and its affiliated companies may provide additional services to mutual fund companies and insurance companies.
- M&T Bank’s subsidiary, Wilmington Investment Advisors, Inc. ("WTIA")provides investment advisory services to the Wilmington Funds, and M&T Bank and its affiliates (“M&T”) provide services under 12b-1 plans, shareholder services, and administrative services to the Wilmington Funds, and may in the future be retained to provide additional services. M&T is entitled to receive compensation for services provided to the Wilmington Funds as described in the funds’ prospectuses.
- Wilmington Trust Investment Management, LLC (“WTIM”) (subsidiary of M&T Bank Corporation) provides investment advisory services to the Wilmington Family of Mutual Funds (“Wilmington Funds”). WTIM and M&T Securities, Inc. (“MTS”) provide services under 12b-1 plans, shareholder services, and administrative services to the Wilmington Funds, and may in the future be retained to provide additional services. Rodney Square Management Corporation (RSMC), an affiliate of WTIM and MTS, also provides investment advisory and administrative services to the Wilmington Funds. WTIM, MTS and RSMC are each entitled to receive compensation for services provided to the Wilmington Funds as described in the Funds’ prospectuses.
- Western National Life Insurance Company has retained WTIA to manage a portion of its general account assets. The dollar amount of assets managed is directly related to premium payments received from policyholders who purchase M&T Annuity Advantage annuity contracts through M&T Securities, Inc. WTIA is compensated based on assets under management. Therefore, generally the more premium received from M&T Annuity Advantage annuities sold by M&T Securities, Inc., the greater the assets managed by WTIA, and the more compensation it receives.
It is important to note that, while receipt of supplemental payments is among the factors that determine whether a fund family, annuity sponsor, or insurance carrier is treated as an “approved provider,” such payments are not the only factor. It is also important to note that none of these supplemental payments are directed or allocated to our registered representatives, and that our registered representatives receive absolutely no additional compensation when they sell approved products.
The following is a list of approved providers:3
||American General/US Life|
||First Sun America
||New York Life
||State Life/One America|
||Western & Southern
||Western National Life
You can obtain more information about the compensation expected to be received by MTS based in whole or in part upon your purchase of an annuity, insurance policy or mutual fund, or on any alternative insurance quotes provided to you by MTS, by calling MTS Client Solutions at 1-800-724-7788.
Additional payment and/or compensation information is available in the individual fund or variable annuity/insurance prospectus and Statement of Additional Information, which are available from the fund or insurance company upon request.
Before investing in a mutual fund or purchasing an annuity or insurance policy, you should discuss your financial needs and objectives with your MTS registered representative. If you are considering a mutual fund, variable annuity or variable insurance policy, you should also consider the investment objective, risks, charges, and expenses of the mutual fund, or of the variable annuity or variable insurance sub-accounts. Information about these and other important subjects is in the prospectus for the mutual fund, variable annuity or variable insurance product, which you should read carefully before investing. You should keep the prospectus in a safe place for future reference.
1M&T Securities offers additional insurance products through Specific Solutions, Inc. and Associates of Clifton Park, Inc. These general agencies function as intermediaries between M&T Securities and various insurance providers.
2Although registered representatives generally receive the same percentage rate of compensation for all mutual fund purchases, the same percentage rate of compensation for all annuity purchases, and the same percentage rate of compensation for all insurance policy purchases, sales charges, commissions, shareholder service and distribution fees vary from product to product and from share class to share class, and these differences can significantly affect the amount the registered representative receives. Because compensation structures vary by product type, MTS and its registered representatives receive more compensation for certain types of products, such as annuities and insurance, than others.
3Each of these companies, with the exception of the American Funds, Wilmington Funds and Columbia, makes supplemental payments to MTS. The above list may be modified from time to time, and fund families, and insurance companies who issue annuities and insurance policies, may be added or removed without prior notice to existing investors. MTS also receives payments for recordkeeping and administrative services from fund families not on the current list of approved providers. The fund family generally makes these payments in the form of a flat dollar amount per year for each fund held in a customer’s account.