We are re-issuing this notice to ensure you have the most accurate and up-to-date information. Upon recent review, we identified that the original communication contained some inadvertent inaccuracies in the Security Benefit section.

This updated version reflects the correct information. Please disregard the prior notice and utilize the details provided here going forward.

Several vendors, including Security Benefit, Voya, and Sammons offer a mutual fund platform that incorporates either a custodial, asset based, or recordkeeping fee which allow them to provide various mutual funds from multiple fund families. When utilizing these investment platforms, it is important that all potential fees are disclosed on the Mutual Fund Purchase Disclosure.

Security Benefit-Advisor Mutual Fund Program

There are currently two options when enrolling a client in a Security Benefit Life Advisor Mutual Program: Option 3 and Option 4. The cost structure of Option 4 is similar to A share mutual funds and may generally be suited for clients with longer time horizons. The cost structure of Option 3 is similar to C share mutual funds and may generally be suited for clients with shorter time horizons.

In completing the Mutual Fund Purchase Disclosure form for an Option 4 purchase, Class A shares should be checked on page 2, section Ill with Front End Sales Charge of 5.5% (or corresponding breakpoint). Additionally, the box should be checked next to “Account has asset based custodial fees (Describe in the remarks below)”. In the remarks section IV, the registered representative should disclose a .35% annual Asset Based fee, assessed monthly, along with an additional charge of .45% for Vanguard and Avantis Funds, .25% for Needham Funds, and .10% for American Funds, if applicable.

In completing the Mutual Fund Purchase Disclosure form for an Option 3 purchase, the registered representative should check the box next to “Account has asset based fees (Describe in the remarks below)”. In the remarks section IV, the registered representative should disclose a 1% annual Asset Based fee, assessed daily, a 1% CDSC that drops to 0 in year two, along with an additional charge of .45% for Vanguard or Avantis Funds, .25% for Needham Funds, and .10% for American Funds, if applicable.

Since the costs of Option 3 are similar to C shares, and a FINRA Fund Analyzer is required for purchases of $20k or more, additional disclosure is needed for Option 3 purchases of $20k or more. The FINRA Fund Analyzer cannot be used for funds in this platform, so additional disclosure language should be added to the remarks section IV: “Analysis was done regarding the cost of choosing Option 3 vs. Option 4. The approximate crossover point where the cost of Option 3 shares will surpass those in Option 4 is in                                                      years (fill in the blank). The client understands that if the Option 3 shares are held past this point, they will be paying more in expenses.” A preview of the case is recommended to ensure the fee structure makes sense.

Voya Select Advantage IRA:

Voya’s investment platform is more straightforward with only one investment option, although their fees vary depending on average monthly account value. In completing the Mutual Fund Purchase Disclosure for Voya, the registered representative should check the box next to “Account has asset based custodial fees (Describe in the remarks below)”. In the remarks section IV, the registered representative should disclose the average monthly account value recordkeeping fee as follows:

$0 – <$50k = 0.60%

$50k – <$100k = 0.55%

$100k+ = 0.50%

Additionally, a $50 annual maintenance fee applies for accounts balances of $15,000 or below.

Sammons LiveWell Mutual Fund IRA:

Sammons IRA offers no load funds with no transaction fees. In completing the Mutual Fund Purchase Disclosure for Sammons, the registered representative should check the box next to “Account has asset based custodial fees (Describe in the remarks below)”. In the remarks section IV, the registered representative should disclose the average account value recordkeeping fee as follows:

$100,000+ = .45%

$50,000 -< $100,000 = .55%

$25,000 -< $50,000 = .65%

Less than $25,000 = .80%

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