As a client of Founders Financial Securities (“FFS”), your privacy is of the utmost importance.
Revenue Sharing Practices
Client Disclosure Statement
FFS offers a wide variety of products and programs including securities and fixed income, mutual funds, annuities, life insurance, and investment programs. Collectively, we refer to the companies through which these programs are offered as Approved Product Companies. FFS maintains an approved product list that contains a wide variety of over 200 Approved Product Companies.
FFS has a few unique relationships with a select group of Approved Product Companies that assist FFS in sponsoring conferences or seminars (“Sponsoring Companies”). Sponsoring Companies reflect a variety of performance and investment styles with a broad spectrum of investment choices and services. FFS has chosen to work with these companies because of the array of investment choices and services these companies offer to address the varied needs of our client base and because of their reputations, size, marketing, operational sophistication, and level of wholesaling support. FFS receives additional compensation or payments (also known as “revenue sharing”) as a result of these relationships. The greater access afforded these companies to work with our Registered Representatives provides additional training, educational presentations, and other product support so that each Registered Representative may work more effectively to serve clients better. Of course, FFS’ Registered Representatives are not required to recommend any of these particular products to you; however, this greater level of access could influence a Registered Representative’s product recommendation to you. Our current Sponsoring Company List can be found in the firm’s Form ADV-Part 2A.
FFS does not provide differential compensation (or higher net payouts) to Registered Representatives for investments made in Sponsoring Company products. Some mutual funds and variable insurance products carry a higher sales charge than others (resulting in higher gross compensation to FFS), which could influence a Registered Representative’s product recommendation to you. The fee table located in the product prospectus should be reviewed for a complete discussion of all fees and expenses.
FFS receives revenue sharing fees based on overall sales by Registered Representatives of investment products issued by Sponsoring Companies. FFS receives such revenue sharing fees in a range of 10 to 50 basis points ($10 to $50 per $10,000) of the total value of assets placed by FFS’ Registered Representatives in products offered by Sponsoring Companies. FFS negotiates these payments annually from each Sponsoring Company to defray the ongoing costs of training, education, and product support activities. These revenue sharing payments are in addition to the sales charges, annual service fees, applicable redemption fees and deferred sales charges, and other fees and expenses disclosed in a mutual fund’s or other product’s prospectus fee table. Revenue sharing payments, however, are paid out of the Sponsoring Company’s assets. Moreover, no portions of these payments to FFS are made by means of brokerage commissions generated by the mutual fund or other product and no portion of these payments are directed or allocated to Registered Representatives. You should refer to the Prospectus and/or Statement of Additional Information (available on request from the product issuer) for a complete discussion on how revenue sharing programs with distributors such as FFS are administered.
FFS also receives due diligence and marketing fees when selling real estate investment trust interests (also known as REITs) and limited partnership interests, depending on the amount invested. These fees are paid from client monies and are fully disclosed in the product prospectus. should review the product prospectus for a complete discussion of fees and expenses. Some of these product sponsors are also provided greater access to our Registered Representatives to provide training, educational presentations and other product support.
The revenue sharing arrangements outlined above will not be applicable to ERISA accounts where Founders serves as a fiduciary. There are also some Approved Product Companies that exclude all ERISA accounts from their revenue sharing payments to Founders.
In accordance with regulations, FFS has developed a Business Continuity Plan (“BCP’) to address how we will respond to events that significantly disrupt the operation of our business. Since the timing and impact of disasters and disruptions are unpredictable, FFS will be flexible in responding to actual events as they occur.
For more information about Founders’ BCP, please refer to the Business Continuity Plan section of our Form ADV Part 2-A.
Order Routing Practices
Client Disclosure Statement
FFS is required to make available quarterly reports of our routing practices. These reports identify the significant venues where our customer’s orders were routed for execution during the previous calendar quarter. FFS transmits all equity orders to our clearing firm, Pershing, who may then route customers’ orders to various venues for execution. A written copy of this report is available by contacting your registered representative. You can also access our firm’s quarterly report at: www.orderroutingdisclosure.com (in the “enter broker-dealer’s full name” field, enter: proequities inc).
Click here to access the most recent version of our Customer Relationship Summary.