2021 Premiere Select Retirement Accounts: Annual Maintenance Fee Cycle

September 14, 2021

Summary

National Financial Services will be charging Premiere Select Retirement accounts the annual $40.00 retirement maintenance fee on November 22^nd, 2021.

How can I avoid the $25.00 Service Fee for home office covering the fee?

Representatives may review their population of impacted accounts with insufficient funds to cover the maintenance fee by running a report through Wealthscape, beginning September 17th, 2021. (Menuà Reports à Client and Account Informationà Retirement Account Annual Fees w. Core Cash Balance).

To assist, ESI Operations will automatically deliver this report to all eligible Wealthscape users through the automated reporting alerts system. The automated report will be delivered during the 4^th Quarter of 2021, on/around the first of each month.

Proactively running the report will allow you 3 months to contact clients and get a trade placed or cover with one of the methods detailed below. It is more efficient to raise multiple years of cash with a single trade, alleviating the need to repeat the process each year and saving on trading costs.

If home office must place a trade to raise cash for the fee, the representative of record will be charged the $25.00 service fee, per trade. Uncollected fees of less than $25 will be reversed against the registered representative’s compensation.

How Customers Can Cover the Fee
Customers have the following payment methods to cover the IRA annual maintenance fee:

Deduction from qualified account money-market position (default)
NEW Deposit a $40.00 check using the Wealthscape Investor Mobile App and code as Retirement Maintenance Fee (only available through mobile deposit)
Journal from their nonretirement brokerage account
1st party Electronic Funds Transfer (EFT) from their bank account
1st party Intra-Bank Payment (IBP) from their bank account, available to NFS approved, bank affiliated firms

To elect one of these payment methods on an ongoing basis, the Premiere Select IRA Annual Maintenance Fee Payment Instructions Form must be completed. Clients can also elect payment methods on the Premiere Select IRA Application when establishing a new account.

Clients no longer receive a Retirement Fee Invoice, but the following message will be applied to September account statements for impacted account holders:

The 2021 retirement account annual maintenance fee is due on 10/29/2021. This fee covers the costs associated with the recordkeeping of your account and reporting required by the IRS. If you would like to pay the fee from your bank account or your nonretirement brokerage account, contact your broker/dealer. If you do not provide payment instructions, the fee will be deducted from your retirement account on 11/22/21. If funds are not available to cover the fee, your account may receive an unpaid fee posting. Your broker/dealer may sell any or all of your retirement assets to satisfy the fee and any associated expenses

such as brokerage commissions and/or liquidation charges. For information about the annual fee, refer to

the Retirement Account Customer Agreement or contact your broker/dealer.

Ineligible Accounts and Automatic Waivers
Accounts that are not billing eligible:

New accounts opened between September 17, 2021 and December 31, 2021 are excluded from the 2021 billing cycle
Accounts with current year TOA or Full Distribution status
Closed accounts with less than $35 in market value as of September 17, 2021
Abandoned accounts (with H1 or H5 restrictions)
MAD Funding accounts

Accounts with Automatic Waivers

IRA accounts for the benefit of employees of ESI, National Life and affiliates, including registered representatives, branch office employees and spouses of said employees that are coded as employee accounts
IRA accounts with total assets of $250,000 or more
ESI Illuminations accounts that meet program minimums on Valuation Day (September 17th, 2021)

Accounts that are ineligible or qualify for a waiver will not receive the annual retirement maintenance fee notice on their September account statement, nor will they be included in the November fee collection process. A representative can request a waiver of the annual maintenance fee and have it charged against compensation by submitting the Annual Maintenance Fee Waiver Request Form by November 15^th.

Summary of Important Dates

September 17, 2021 – Valuation Day – Account market values and core account balances are recorded in preparation for billing and application of subsidy programs.

September 30, 2021 – Customer Notification – Accounts meeting the billing criteria will receive the annual retirement maintenance fee notice on the September account statement.

November 1^st– 19^h, 2021 – Collection Period – Accounts that have instructions on file to pay the annual maintenance fee via journal, EFT or IBP may have the fee deducted.

November 15, 2021 – Maintenance Fee Waiver Request Deadline – Representatives must submit the Maintenance Fee Waiver Request Form by November 15^th to absorb fees for their clients.

November 22, 2021 – Collection Day – Unpaid fees are posted to customer accounts. Accounts with insufficient cash will result in a cash debit balance.January 5^th, 2021 through January 31^st, 2021 – Liquidation/Write Offs – Accounts with eligible securities will be liquidated to cover uncollected fees or written off and charged to the advisor on record (if less than $25).

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ESI Illuminations Platform Enhancements

September 14, 2021

ESI Illuminations is ESI’s largest advisory platform and has grown in total assets under management to a record $1.6B[1]. To help continue this growth, ESI strives to make the Illuminations platform easy to use with tools to build efficiencies and help you grow your business. As part of this effort, ESI is implementing some system enhancements designed to make doing business on the platform even easier:

Investment policy violation e-mail notifications to the Advisor; and
Model Building within Concentration limits.

These enhancements will be effective Monday, September 13, 2021.

INVESTMENT POLICY VIOLATION E-MAIL NOTIFICATIONS

ESI’s Advisor as Portfolio Manager (APM) programs, branded “Flagship Select” and “ESI Directions”, implement six Investment Policies which help advisors stay within the prescribed guidelines of the APM programs, adhere to Firm policies, and manage accounts according to the client’s investment mandate. The Investment Policies address:

Position Count Limit
Risk Variance
Single Security Concentration
Sustained Cash
Trade Count Limit
Unauthorized Positions

Investment Policies are like the guard rails that keep you on the road. They are there to help Advisors, acting as the portfolio manager, manage their accounts in accordance with the client’s instructions, as determined by the Statement of Investment Selection.

Currently, advisors can see Investment Policy violation notifications when they log into the Illuminations website. To better assist Advisors with proactively monitoring their accounts, ESI is implementing Envestnet’s automated e-mail notification system. Effective September 13, 2021, Advisors who have accounts that have triggered a Policy violation will receive notification via e-mail directly from the Illuminations platform and will be able to review the status of the account(s) by clicking a link in the notification. Going forward, the system will send notifications on a monthly basis.

Monthly notifications will list the account(s) and the consecutive number of days since the account(s) triggered a violation. This notification will make it even easier for Advisors to be aware of any such accounts so they can take action to correct violations BEFORE the home office becomes involved. Please note that all advisors with accounts in Flagship Select or ESI Directions will automatically receive the monthly notification e-mail. If no accounts are listed, no further action is needed. Of course, if the notification reflects any accounts in violation of a policy, the Advisor is responsible for addressing the violation.

MODEL BUILDING WITHIN CONCENTRATION LIMITS

ESI’s APM programs implement technology which helps Advisors who act as Portfolio Manager build models on the platform. To assist with building models, ESI’s investment policies limit models to no more than 40% of the invested assets in a single security. However, experience has shown that some advisors, whose initial allocations are at or near the maximum level, have had accounts almost immediately trigger a violation of the concentration policy simply as a result of fluctuating market conditions. As such, ESI is lowering the maximum holding allocation for model building from 40% to 30% in an effort to allow for subsequent drift in the allocation. By lowering the maximum allocation to 30% while building the model, the account could actually experience up to +10% drift without triggering a policy violation for concentration limits. This change should alleviate the challenges posed by account allocations that experience drift from the original target as a result of market movement.

QUESTIONS

Questions on any of these enhancements can be directed to Sandy Colvin at 800-344-7437 x3016 or SColvin@nationallife.com.

[1] Total AUM as of July 1^st, 2021.

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ESI Introduces Portfolio Quick Check Tool through Wealthscape

September 14, 2021

Available 24/7, Fidelity Portfolio Quick Check instantly gives you tailored, actionable portfolio analysis and insights—simply and seamlessly. This online, self-serve tool offers you a clearer picture of what your clients own and where new opportunities may lie. Available at no additional cost, Fidelity Portfolio Quick Check allows for portfolio analysis of held or outside accounts. The data in the analysis can help to:

Think holistically across the client’s portfolio
Consider the role different asset classes will play going forward
Discuss the suitable balance of risk and opportunity

Please click on any of the links below for more information.

Sample Output
User Guide – please note that you do not need to request access to Portfolio Quick Check. Your access has already been granted and turned on.

Support Services

Please Note: You must include your securities disclosure by attaching an approved business card or other approved material when providing output to a customer. No other personalization (agency name, contact information) of the output is allowed.

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