Voya Financial Advisors Compensation and Strategic Partners
Voya Financial Advisors, through your registered representative, makes a wide variety of mutual funds and variable insurance products, including annuities, available to you. You pay either a sales charge when you purchase your investments (such as for Class A shares of a mutual fund), or the 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). Voya Financial Advisors is paid by the product issuer or its affiliates, and part of that payment goes to your registered representative.
Your sales charges and expenses, and the sales commissions paid to us and our representatives, differ from investment to investment, and may depend on the amount of money you invest. Some product issuers or their affiliates occasionally also offer "commission specials," which increase the sales commissions paid to us and our representatives. Sales charges, and information about expenses, are explained in the product's prospectus. Generally speaking, investors buying the same product for the same kind of investment account with the same investment amount pay the same sales charge. This is true regardless of the broker-dealer and registered representative through which the investment is purchased.
Your representative may receive extra compensation for or may concentrate efforts on the sales of Voya products. Voya Financial Advisors may share with registered representatives and/or manage a greater percentage of the compensation it receives on Voya products. Additionally, Voya Financial Advisors may also pay registered representatives who are life insurance agents bonuses and/or benefits based on sales of Voya variable life and annuity products. 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.
Our Strategic Partners
Although we make a large number of products available to you, we concentrate our marketing and training efforts on investments offered by a number of select companies ("Strategic Partners"). Strategic Partners are selected, in part, based on whether they offer competitive products, their technology, their customer service and their training capabilities. Some of our Strategic Partners are members of the Voya family of companies.
Our Strategic Partners have more opportunities than other companies to provide our customers and our representatives with education on investments, the products they offer, industry trends, new investment ideas and other issues.
They may attend or sponsor education and training meetings for our representatives. Our Strategic Partners also have the opportunity to receive input from our representatives on features of their products. As discussed below, our Strategic Partners pay additional amounts to Voya Financial Advisors to compensate us for these enhanced marketing and training opportunities.
What Strategic Partners pay to Voya Financial Advisors
t is important to know that alt ough Strategic Partners pay extra compensation to Voya Financial Advisors or its affiliates; you do not pay more to purchase Strategic Partner products through Voya Financial Advisors than you would pay to purchase those products through another broker-dealer. Nevertheless, the payment of this additional compensation to Voya Financial Advisors by our Strategic Partners may pose a financial incentive for us to promote those products over other products.
The additional amounts Strategic Partners pay Voya Financial Advisors vary from one Partner to another and from one product to another. For example, a significant portion of these payments can be calculated as a fixed amount, as a percentage of product sales (up to a maximum of 1/4 of 1%—which would be $25 on a $10,000 investment), as a percentage of our customers' assets invested in the products (up to a maximum of 1/10 of 1%—which would be $10 on a $10,000 investment), or as some combination of these. The prospectus and statement of additional information for each mutual fund or variable insurance product should have additional information about these payments.
Benefits to Voya Financial Advisors’ representatives
Your representative does not receive additional commissions for selling a Strategic Partner product, except when from time to time Voya Financial Advisors allows its representatives to participate in "commission specials" offered by Strategic Partners. To find out whether a product you are considering is part of a commission special, ask your representative or visit the product issuer's Web site.
Voya Financial Advisors' representatives do receive some additional benefits from our Strategic Partner program. In some cases the transaction clearing costs that would normally be paid by you or your representative may be reduced or eliminated on Strategic Partner products. Also, your representative indirectly benefits from Strategic Partner payments to Voya Financial Advisors when this money is used to support costs relating to product review, marketing or training.
Other compensation and reimbursements
Companies that are not Strategic Partners may at times send Voya Financial Advisors payments in recognition of our sales and marketing efforts, and may have additional opportunities to provide marketing services to our representatives. Also, both Strategic Partners and other companies may pay marketing allowances to Voya Financial Advisors in connection with the sale of insurance products. Both Strategic Partners and other companies may also reimburse up to 100% of the cost of training and education meetings for our representatives, as permitted by industry rules. Sales of any products by Voya Financial Advisors representatives may qualify representatives for additional cash and non-cash compensation that may include support for their business activities, attendance at seminars, conferences and entertainment. Additionally, some investments, whether they are issued by a Strategic Partner or not, may pay higher rates of compensation than others. Further, some of Voya Financial Advisors' home office management and certain other employees may receive a portion of their employment compensation based on sales of products of Strategic Partners, including Voya affiliates.
Pursuant to an agreement with Pershing, LLC ("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 RA 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 its strategic partner firms described below. 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 program that does not provide VFA with such fees.
Voya Financial Advisors does from time-to-time add or remove specific firms from its Strategic Partners Program. Below is the current list of Mutual Fund and Insurance Strategic Partners:
Mutual Fund Strategic Partners:
- Allianz Global Investors
- American Funds
- Blackrock Investment Management
- Columbia Threadneedle Investments
- Deutsche Asset & Wealth Management
- Fidelity Institutional Asset Management
- Franklin Templeton Investments
- Hartford Funds
- Horizon Funds
- John Hancock Funds
- JP Morgan
- MFS Funds
- Navigator Funds
- Oppenheimer Funds, Inc.
- Pacific Life Funds
- Pioneer Funds
- Prudential Mutual Funds
- Putnam Investments
- T. Rowe Price
- Voya Funds
- Voya Select Advantage (PW: Advantage)
Insurance Strategic Partners:
- Allianz VA
- AXA Equitable Life
- Global Atlantic Financial Company
- Jackson National Life
- Met Life Investors
- Pacific Life
- Voya Annuity & Asset Sales
- Voya Insurance and Annuity Company
Third Party Platform Partners:
- Horizons Investments
- Loring Ward
- SEI Investments
- WBI Investments, Inc.
Mutual Fund Platforms:
- FundVest® Mutual Funds
Alternative Investment Companies
In addition to the Strategic 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 Voya Financial Advisors to compensate the firm for enhanced marketing and training opportunities.
It is important to know that although certain distributors pay extra compensation to Voya Financial Advisors or its affiliates, you do not pay more to purchase these products through Voya Financial Advisors than you would pay to purchase those products through another broker-dealer. Nevertheless, the payment of this additional compensation to Voya Financial Advisors by these distributors may pose a conflict of interest and/or a financial incentive for the firm to promote those products over other products.
The additional amounts distributors pay Voya Financial Advisors 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 would be $150 on a $10,000 investment). Please read the prospectus and statement of additional information for each product to learn more about these payments.
Your representative does not receive additional commissions for selling one of these products. Your 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:
- Blue Rock
- Carter Valdis, (SC Distributors)
- CION Securities
- ICON Securities
- Cole Capital
- Dividend Capital
- Franklin Square Capital (FS2 Capital)
- Griffin Capital
- Highland Capital Management
- Hines Real Estate Investments
- Inland Securities
- KBS Capital Markets
- MDS Energy Development
- Northstar Realty Finance
- Resource Real Estate
- SQN Securities
- Steadfast Real Estate
- W.P. Carey