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Mutual Funds

Important Information about Revenue Sharing Arrangements

U.S. Bancorp Investments ("USBI") routinely receives compensation for the sale of financial products, including mutual funds, unit investment trusts (UITs), variable and fixed annuities, and variable and fixed life insurance. The compensation provided to USBI depends upon the product. In addition to sales loads, 12b-1 fees, networking and processing fees, USBI receives mutual fund support fees, which are sometimes referred to as "revenue sharing" payments, from the advisers or distributors of mutual funds that have access to USBI's investment professionals, as described below. Similarly, in addition to the commissions paid to USBI in connection with the sales of annuities and life insurance, USBI receives support fees from certain insurance companies or distributors. Again, these insurance companies and distributors (if applicable) have access to USBI's investment professionals, as described below.

Shareholder Service Fees

USBI also receives shareholder servicing fees from certain mutual fund companies based on USBI client assets held in their mutual funds. These fees cover costs for delivering client statements, confirmations, tax forms, prospectuses, proxies and other shareholder related back office processes such as recordkeeping, escheatment, and call-center support. The shareholder servicing fees vary by mutual fund company and by fund and are based on the assets held in USBI client accounts. This presents a conflict of interest for USBI, however, our financial advisors do not receive any portion of shareholder service related compensation received by USBI. USBI has a clearing arrangement with Charles Schwab & Co., Inc. ("Schwab") whereby Schwab maintains an omnibus account with certain mutual fund families for USBI on behalf of USBI clients. Under the clearing arrangement, Schwab provides clearing services for nearly all funds. USBI pays Schwab a fee for the clearing service. Under the arrangement Schwab passes through to USBI the compensation that Schwab receives from those funds for recordkeeping, shareholder communication, and other administrative services (collectively "shareholder services") that USBI provides to clients who invest in those funds. The receipt of shareholder servicing fees provides USBI an incentive to favor funds that provide higher compensation. We also have a limited number of agreements direct with mutual fund companies (including First American Funds, an affiliate) to receive shareholder servicing payments. Your account may or may not hold these mutual funds. The fees generally fall within the following ranges:

Load mutual funds:

  • Per position/CUSIP: $5-$30 per position/CUSIP
  • Basis points: 0-30 basis points

Load waived / No-load mutual funds:

  • Basis points: 0-40 basis points

Financial Revenue Sharing from Product Partners to USBI

Many financial products are made available in the marketplace. To assist our clients in choosing the product that is right for them, USBI utilizes a formal due diligence process to evaluate firms who offer a broad array of financial products, selecting only those matching our required criteria. Following this due diligence process, our investment professionals make recommendations from among this wide range of approved products based upon the specific investment objectives, risk tolerances, and time horizons of their clients and subject to broker-dealer suitability requirements.

USBI has entered into agreements through which certain firms (our "Product Partners") provide financial contributions to USBI which are used to support the marketing of their products, training of our investment professionals, and for other purposes. Product Partners may also reimburse USBI for expenses incurred during training and educational conferences and seminars, and for providing client accounting and administrative services for USBI's client accounts holding the products of the Product Partner. In addition, USBI employees, including investment professionals, may receive promotional items, meals or entertainment, or other non-cash compensation from the Product Partners.

In exchange for sharing revenue, these Product Partners are provided enhanced access to USBI's distribution network and greater opportunities to participate in marketing and training functions. Investment professionals do not, however, receive any portion of, or any additional cash compensation as a result of these revenue and cost sharing arrangements. It is important to note that not all product providers approved by USBI make financial contributions to USBI.

All of the above-referenced financial contributions are in addition to any sales charges or commissions that may be disclosed in the fee tables found in the prospectuses and statements of additional information for the mutual fund or in your annuity or insurance contract.

Mutual Funds - Revenue Sharing Payments

Financial contributions from USBI Mutual Fund Product Partners may include revenue-sharing arrangements. The revenue sharing payments made to USBI by a Mutual Fund Product Partner may consist of: (1) an annual, lump-sum payment; (2) a percentage of the total amount of mutual fund sales made by USBI for that fund family ("mutual fund sales-based fee"); and/or (3) a percentage of the total net assets of the mutual fund shares of that fund family held by USBI customers ("mutual fund asset-based fee").

The amount and type of revenue sharing payments received from a Mutual Fund Product Partner may vary and is subject to negotiation. Revenue sharing payments are generally in the following amounts:

Mutual Fund Sales-Based Fee Up to 0.10% (paid quarterly) on sales of mutual fund shares (e.g., $10 per $10,000 purchase).
Mutual Fund Asset-Based Fee Up to 0.05% per year (calculated and paid quarterly) of the net assets of all mutual fund shares of a particular Product Partner held through USBI (e.g., $5 per $10,000 in net assets of shares).

Insurance/Annuities - Revenue Sharing Payments

Financial contributions from USBI Insurance or Annuity Product Partners may include revenue-sharing arrangements. The revenue sharing payments made to USBI by an Insurance or Annuity Product Partner may consist of: (1) an annual, lump-sum payment; (2) a percentage of the total amount of gross insurance or annuity sales made by USBI for the insurance company ("annuity sales-based fee") and/or (3) a percentage of the aggregate value of insurance or annuity assets invested in contracts for which USBI is designated as the broker or agent of record by the insurance company or annuity provider ("annuity asset-based fee").

The amount and type of revenue sharing payments received from an Insurance or Annuity Product Partner may vary and is subject to negotiation. Revenue sharing payments are generally in the following amounts:
Insurance or Annuity Sales-Based Fee Up to 0.10% (paid quarterly) on sales of insurance or annuities (e.g., $10 per $10,000 purchase).
Insurance or Annuity Asset-Based Fee Up to 0.05% per year (calculated and paid quarterly) of the net assets of all insurance or annuity assets of a particular Product Partner where USBI is the broker or agent of record (e.g., $5 per $10,000 in net assets of shares).

Potential Conflicts of Interest

A potential conflict of interest exists where USBI is paid more from a product partner if you purchase one type of product instead of another. A potential conflict of interest may also exist if one Product Partner provides more in financial payments over another. USBI offers products that USBI or its affiliates may underwrite, or are otherwise financially interested in. USBI also offers products that involve entities that have a relationship with USBI and/or its affiliates. USBI receives compensation or other benefits for selling such products.

USBI is committed to serving our clients' interests first, so we have adopted policies reasonably designed to control and limit these potential conflicts of interest. The policies require investment professionals to recommend products and services based only on their appropriateness in meeting your investment goals. The policies prohibit the payment of any fees directly to investment professionals. In addition, payments must be made by the product provider by wire transfer or check, and policies prohibit the acceptance of these payments in the form of direct or indirect investment portfolio commissions of the product sponsor.

Product Partners

A list of all Product Partners that have made financial contributions to USBI, ranked in order of financial contributions for the prior 12 months as of May 31, 2018, is included below:

Pacific Life
Ohio National
First Trust Portfolios
Global Atlantic Financial Group
Jackson National Life
Lincoln Financial
Russell Investments
Lord, Abbett & Co.
Great American
Principal Financial
Brighthouse Financial
AXA Equitable Life Insurance
Nuveen Investments
JP Morgan
Ivy Funds
CIM Group
Black Creek Group
New York Life/Mainstay Investments
Legg Mason
Hines Securities
ColumbiaThreadneedle Investments
Delaware Funds
Eaton Vance
Allianz Global Investors
CION Securities, LLC
American Funds
and Great West Life & Annuity

For more complete information about mutual fund or variable annuity products or to obtain a prospectus, please ask your USBI investment professional. Investors should consider the investment objectives, risks, and charges and expenses carefully before investing. This and other important information is contained in the prospectuses. You should read and consider the information in the prospectuses carefully before investing.

U.S. Bancorp Asset Management, Inc., formerly known as FAF Advisors, Inc., an affiliate of USBI serves as an advisor to First American Funds. First American Funds are distributed by Quasar Distributors, LLC, an affiliate of USBI.

Variable, Mutual Funds, Fixed Annuities

  • Are not insured by the FDIC or any other federal government agency
  • Are not deposits or other obligations of, and are not underwritten or guaranteed by, U.S. Bank or any of its affiliate
  • May involve investment risk including the possible loss of principal

Securities and Exchange Commission Rule 11Ac1-6

U.S. Bancorp Investments, Inc. has prepared the linked report pursuant to U.S. Securities and Exchange Commission rule 11Ac1-6 requiring quarterly reports of order routing practices. The report provides information on the routing of any order that the customer has not specifically instructed to be routed to a particular venue for execution. For these non-directed orders, U.S. Bancorp Investments, Inc. has selected the execution venue on behalf of its customers. View the U.S. Bancorp Investments, Inc. 11Ac1-6 report.

Investment products and services are available through U.S. Bancorp Investments, Inc., member FINRA and SIPC, an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.

Insurance products are available through U.S. Bancorp Insurance Services, LLC, in Montana U.S. Bancorp Insurance Services of Montana, Inc., and in Wyoming U.S. Bancorp Insurance & Investments, Inc. All are licensed insurance agencies and subsidiaries of U.S. Bancorp and affiliates of U.S. Bank. Policies are underwritten by unaffiliated insurance companies and may not be available in all states. CA Insurance License Number OE24641.
U.S. Bank is not responsible for and does not guarantee the products and services, or the performance of the products or services, offered by its affiliates or by third parties.

* U.S. Bancorp Investments, Inc. and U.S. Bancorp Insurance Services, LLC is not a tax advisor. When it is appropriate, you are encouraged to seek professional tax advice.

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