| Revenue Sharing from Mutual Fund Families | |
PFS Investments Inc. (“PFSI”) expects to receive a mutual fund support fee, or what has come to be called a revenue sharing payment, from each of the fund families in our Select Group and from Fidelity Investments. Revenue sharing payments are paid out of the investment adviser’s or other fund affiliate’s assets and not from the fund’s assets. The assets of the investment adviser or other fund affiliate, however, may be in part derived from services provided to the fund and paid for out of the fund's assets. It is important to note that neither our representatives, nor their supervisors, receive any additional compensation as a result of these payments. Expected 2011 Revenue Sharing. Generally, for 2011 we expect the revenue sharing arrangements resulting in the largest payments to PFSI to consist of: (i) a one-time payment of up to .25 percent (25 basis points) of an investor’s purchase amount, and (ii) a quarterly payment of up to .0175 percent (1.75 basis points) for as long as the fund family retains the investor’s assets. On an investment of $10,000 (none of which is invested in the money market fund discussed below), the maximum revenue sharing payment PFSI would receive would be a one-time payment of $25, and $1.25 for each quarter that the fund retains the assets. These revenue sharing arrangements vary and some fund-family affiliates will pay less. Separately, PFSI may receive additional revenue sharing on investments in the following Legg Mason funds: Western Asset Money Market, Western Asset Municipals Money Market, Western Asset Liquid Reserves and Western Asset Tax-Free Reserves. Though the revenue sharing arrangements with these funds vary, the maximum revenue sharing payment PFSI could receive is .0435 percent (4.35 basis points) per quarter. Accordingly on an investment of $10,000, PFSI could receive a maximum payment of $4.35 for each quarter that the fund retains the assets. PFSI may receive less depending on which fund holds the assets and other factors determined by the investment advisor to the fund. All revenue sharing arrangements are subject to change at any time. For more information, please refer to a fund’s description of its revenue sharing practices, usually included in its prospectus or Statement of Additional Information. Revenue Sharing from Variable Annuities Important Information for Our Variable Annuity ClientsHow PFS Investments Inc. and Your Representative are Compensated When You Invest in the PrimElite IV Variable Annuity PFS Investments Inc. (“PFSI”) is the broker-dealer through which you purchased your variable annuity. The variable annuities sold by PFSI do not charge an upfront sales charge, but PFSI and your representative receive compensation when you invest. The amount of the compensation depends upon the amount invested and the age of the owner (or annuitant) at the time of an investment. In addition, PFSI and your representative receive annuity contract servicing payments (sometimes called “trail commissions”) beginning in the second year of the contract and continuing for as long as you retain your variable annuity. Both the upfront and trail commission payments are paid by the issuer, MetLife Investors USA Insurance Company (“MetLife”), to PFSI, which in turn pays your representative. Both the upfront and trail commission payments are paid out of the issuer’s assets, but may be derived from the product fees and expenses described in the prospectus. PFSI representatives participate in award and incentive programs in which they may receive trips or additional non-cash compensation based on their securities sales. PFSI exclusively offers variable annuities issued by MetLife and its affiliates and is eligible for a bonus payment if aggregate premium payments into individual variable annuity products in any calendar year exceed a designated amount. PFSI may be reimbursed by MetLife or its affiliates for expenses incurred for various meetings, seminars, and conferences held in the normal course of business. Please see the prospectus for further details about the compensation paid to PFSI and the fees and expenses of your product.Marketing and Administrative Services Payments Received by PFSI from Sales of the PrimElite IV Variable Annuity PFSI receives additional compensation from MetLife for providing marketing and administrative services in support of the PrimElite IV Variable Annuity. Generally, this additional compensation consists of the following: (i) a one-time payment of up to 1.01 percent (101 basis points) of an investor’s premium payment, and (ii) a monthly payment of up to, on an annual basis, .125 percent (12.5 basis points) of the daily average of assets in the separate accounts that MetLife uses to support PrimElite IV. For example, on a premium payment of $10,000 into the PrimElite IV Variable Annuity, the additional compensation MetLife would pay to PFSI would be (i) a one-time payment of up to $101 and (ii) up to $1.04 for each month that MetLife retains the assets (assuming no change in the market value of the assets).* This compensation is payable to, and retained by, PFSI. Neither your representative, nor his or her supervisor receives any additional compensation as a result of these payments. The additional compensation may be used by PFSI to pay for training and educational meetings or materials, sales meetings, various administrative costs and general marketing support, or applied to the earnings of the company. 07PFS39-2 Important Information for Our Variable Annuity Clients
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Important Mutual Fund Information |