Compensation

Voya Financial Advisors, Inc. (“VFA” or “we”), through your registered representative, makes a wide variety of securities products, investment advisory products and services, and insurance products, including mutual funds and variable and indexed annuity contracts, available to you. For non-investment advisory products, you will pay either a commission, a sales charge when you purchase your investments (such as for Class A shares of a mutual fund), or a sales charge may be built into the expenses of the product and/ or charged to you when you sell (such as for Class B or C shares of a mutual fund). For investment advisory products and services, an investment advisory fee, in addition to other fees and expenses, is deducted from your account either monthly or quarterly. VFA is paid by the product custodian, issuer, or affiliates thereof, and part of that payment goes to your registered representative.

Your sales charges, fees and expenses, and the sales commissions paid to us and our representatives, differ among classes of investment, and may depend on the amount of money you invest. Sales charges, and information about expenses, are explained in the product’s prospectus. Other firms may offer you a larger selection of securities products, or investment advisory products and services. Further, other firms may offer the same or similar products and services as those offered through VFA, but for a lower cost.

Product Partners Program

VFA participates in Voya Financial, Inc.'s Product Partner Program. This program enables participating investment product providers ("Product Partners") to receive services and value from VFA through transaction reporting, marketing/sponsorship/engagement opportunities with VFA and its registered representatives, enhanced communication, education, access to key contacts at VFA, and relationship management. Participation in the Product Partners Program is contingent upon the products offered by the potential Product Partner meeting VFA's product standards and the payment of fees to VFA, as discussed below.

Affiliates of VFA may be Product Partners. Product Partners may also participate in Pershing's FundVest program. The FundVest mutual fund program (the "FundVest Program") was established and is maintained by Pershing LLC, VFA's clearing firm ("Pershing"). FundVest Program transaction charges are waived for purchases of mutual funds that would normally carry a transaction charge, which provides VFA advisors with an incentive to recommend a FundVest mutual fund. Pershing, in its sole discretion, may add or remove mutual funds from the FundVest Program without prior notice.

Product Partners attend or sponsor education and training meetings for VFA registered representatives and make payments to compensate VFA for the opportunities offered through the Product Partner Program, which are conditioned on participating in the Product Partner Program at a particular Product Partner fee level.

Product Partners pay a fee to VFA to participate in the Product Partners Program. The fee is based on a number of factors, including but not limited to the amount of VFA customer assets held in the Product Partner’s products, and is calculated for each Product Partner. The additional compensation VFA receives in connection with the sale of Product Partner products poses a conflict of interest for VFA to promote such products over other products as to which VFA does not receive such additional compensation. You do not pay VFA or its affiliates extra compensation, nor do you pay more to purchase Product Partner products through VFA.

VFA from time-to-time adds or removes specific sponsors from its Product Partners Program. Certain products offered by the Product Partners listed are not offered through the Firm's investment advisory program. Below is the current list of Product Partners:

Mutual Fund Product Partners:

  • Alliance Bernstein Funds
  • Amana Mutual Funds
  • Amundi Pioneer Funds
  • Buffalo Funds
  • Davis Funds
  • Doubleline Funds
  • Pioneer Funds
  • Sierra Mutual Funds
  • Thornburg Investment Trust
  • Transamerica Fund Services
  • Virtus Mutual Funds

Insurance product Partners:

  • AXA Equitable Life Insurance Company
  • Forethought Life Insurance Company
  • Great American Insurance Company
  • Protective Life Insurance Company

Third Party Platform Partners:

  • AssetMark, Inc.
  • Loring Ward Financial, Inc.
  • SEI Investments Co.
  • WBI Investments, Inc.

Mutual Fund Platforms:

  • FundVest® Mutual Funds

Alternative Investment Marketing Reallowance

In addition to the Product Partners described above, certain distributors of units in SEC-registered public and non-SEC registered non-public non-traded Real Estate Investment Trusts and Direct Participation Programs, shares of non-traded common stock, corporations, and shares of Regulation D offerings may pay additional amounts to VFA to compensate VFA for enhanced marketing and training opportunities. The payment of this additional compensation to VFA by these distributors poses a conflict of interest by creating a financial incentive for VFA to promote these products over other products.

The additional amounts distributors pay VFA vary from one to another and from one product to another. For example, a significant portion of these payments can be calculated as a fixed amount or as a percentage of product sales (up to a maximum of 1.5%, which is $150 on a $10,000 investment). Please read the prospectus, statement of additional information and your offering memorandum for each product to learn more about these payments. While your registered representative receives a commission for selling one of these products, he or she does not receive additional compensation based on the payment of marketing reallowance. Your registered representative may attend a training and education meeting to learn more about these products, the investment features they contain, and general industry or market trends.

Below is the current list of companies that issue alternative investments that compensate the Firm for enhanced marketing and training opportunities:

  • Advisors Asset Management, Inc.
  • Altegris
  • BlackStone Asset Management
  • Carter Validus
  • CION Investments
  • CNL Corporate Capital Trust
  • Cole Capital
  • Griffin Capital
  • Inland Real Estate
  • KBS Capital Markets
  • NorthStar Capital
  • Pomona Investments
  • SQN Securities, Inc.
  • Steben & Company
  • Stira Capital Markets

VFA Strategic Partner Program

Prior to January 1, 2018, VFA maintained the Strategic Partner program. While the Strategic Partner Program terminated on December 31, 2017, VFA is still subject to certain Strategic Partner agreements and will continue to receive earned but not yet accrued payments from product sponsors participating in the Strategic Partner Program over the course of calendar year 2018. VFA expects to accrue payments during 2018 from the following product sponsors under the Strategic Partner program:

Mutual Fund Sponsors

  • Allianz Global Investors
  • American Funds
  • Blackrock Investment Management
  • Columbia Threadneedle Investments
  • Deutsche Asset and Global Management
  • Fidelity Asset Management
  • Franklin Templeton Investments
  • Hartford Funds
  • Invesco
  • John Hancock Funds
  • JP Morgan Funds
  • MFS Funds
  • Oppenheimer Funds
  • Pacific Life Funds
  • PIMCO
  • Prudential funds
  • Putnam Funds
  • Voya Funds

Variable Annuity Sponsors

  • AIG SunAmerica
  • Brighthouse (MetLife)
  • Forethought Life Insurance Company
  • Hartford life Insurance
  • Jackson National Life Insurance
  • Nationwide Insurance
  • Pacific Life Insurance
  • Prudential
  • Transamerica
  • Voya Insurance and Annuity Company

Other Compensation and Reimbursements

Both Product Partners and other companies may reimburse up to 100% of the cost of training and education meetings for our representatives, as permitted by industry rules. You may be invited to attend seminars or training and educational meetings. If you attend a training or educational meeting with your registered representative and a product sponsor is present, you should assume that the product sponsor has paid for all or a portion of the cost of the training or meeting.

Sales of any products by VFA registered representative may qualify representatives for additional cash and non-cash compensation that may include support for their business activities, bonuses, attendance at seminars, conferences, and entertainment. Further, some of VFA’s home office management and certain other employees may receive a portion of their employment compensation based on sales of products of Product Partners, including Voya affiliates. Certain classes of investments, whether issued by a Product Partner or not, pay higher rates of compensation than other classes of investments.

Companies that are not Product Partners may at times send VFA payments in recognition of VFA's efforts in educating its registered representatives regarding such companies' products, which payments pose a conflict of interest by incentivizing VFA to promote such products over other products. VFA and its registered representatives are eligible to receive incentive awards (including prizes such as trips or bonuses) for recommending certain types of insurance products. All incentive awards are preapproved by VFA and are based on total production for all products and services. The possibility of receiving incentive awards creates a conflict of interest, and may affect recommendations made to you.

The Firm holds competitions throughout the course of the calendar year that award tuition rebates and prizes to the top five investment adviser representatives based on assets under management. Tuition rebates and prizes provided to the top five investment adviser representatives are worth between $400-$500 and $500, respectively for each investment adviser representative. The existence of such contest(s) create a conflict of interest for your investment adviser representative, as he or she is incentivized to increase his or her assets under management to qualify for the prizes associated with the contest(s).

Pursuant to an agreement with Pershing, Pershing reimburses the Firm for transition fees incurred in moving new customer assets to the Pershing platform. Additionally, pursuant to its agreement with Pershing, the Firm is credited $5.00 of each annual maintenance fee as revenue sharing for Individual Retirement Accounts ("IRA") held on the Pershing platform. This reimbursement and credit creates a conflict of interest, as it incentivizes the Firm to custody assets, including IRA accounts, on the Pershing platform as opposed to another custodian that neither reimburses the Firm for transition fees nor credits the Firm a portion of the annual IRA maintenance fee.

Through an agreement with Pershing, VFA is paid a percentage fee by Pershing on all assets (mutual funds, exchange traded funds, equities, bonds and other assets) above a certain threshold custodied at Pershing by VFA customers. VFA receives this percentage fee payment from Pershing in addition to any payments it may receive on such assets from the Product Partner Program. In addition, Pershing pays VFA a per account fee for each customer account of VFA held at Pershing. These payments create a conflict of interest between VFA and its customers, as these payments provide VFA with an incentive to recommend investing through Pershing as opposed to another investment platform that does not provide VFA with such fees.

VFA's registered representatives receive 100% of the commission payout from the sale of variable universal life insurance (“VUL”) issued by VFA's affiliated insurers (“Proprietary VUL”).  Proprietary VUL business commissions are paid directly from the respective Voya insurer to the registered representative. This payment method differs from commission payments of non-proprietary VUL business, from which VFA receives a percentage of the commission and pays the remaining commission to the registered representative. The receipt by the registered representative of 100% of the Proprietary VUL commissions creates a conflict of interest, as it incentivizes registered representatives to sell Proprietary VUL business instead of non-proprietary VUL business.

VFA provides forgivable promissory notes to certain registered representatives in connection with joining the Firm. The promissory notes are offered at VFA's discretion and vary in amount and terms. Principal amounts loaned to registered representatives under a promissory note are forgiven at regular intervals based on a registered representative’s continued affiliation in good standing with the Firm. The registered representative is responsible for paying back any amounts owed if he or she fails to abide by the terms of the promissory note, including but not limited to failure to maintain securities licensure or affiliation with the Firm. The Firm offering forgivable promissory notes to registered representatives creates a conflict of interest as it incentivizes registered representatives to select the Firm to service your account(s) instead of another firm that may not offer promissory notes.

VFA does from time to time add or delete Product Partners. You can view the most up-to-date list of Product Partners by visiting this website, by requesting a list from your registered representative, or by calling 800.356.2906.