Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 1 of 153
CHALLENGE AND OPPORTUNITY
THE IMPACT OF THE RDR ON THE UK’S MARKET FOR FINANCIAL ADVICE
FOURTH DRAFT: JUNE 2013 ANDREW CLARE, STEVE THOMAS, OMAL WALGAMA, & CHRISTINA MAKRIS
AR064563 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 2 of 153
CONTENTS
Executive Summary 5 Introduction 6 7KHLPSDFWRI5'5RQWKHPDUNHWIRU½QDQFLDODGYLFH $UHEHQFKPDUNV½WIRUSXUSRVH" 1.2 The impact on adviser numbers 11 7KHUHHPHUJHQFHRIGLUHFWVDOHVIRUFHV 3ODWIRUPVLQDQ5'5ZRUOG 7KHUROHRIWKH,)$LQD5'5ZRUOG &RQFOXVLRQV 7KHLPSDFWRI5'5RQDGYLVRUEXVLQHVVPRGHOV ,QGHSHQGHQWY5HVWULFWHG 2.2 Fee Structure 20 &OLHQW6HJPHQWDWLRQ %XVLQHVV0RGHO5HDGLQHVV 2.5 Outsourcing 24 &RQFOXVLRQV 7KHLPSDFWRI5'5RQWKHYDOXHRIDGYLVRU\EXVLQHVVHV )LQGLQJYDOXHLQDQDGYLVRU\EXVLQHVV 9DOXDWLRQSULRUWR5'5 9DOXDWLRQLQD5'5ZRUOG 7KH5ROHRIFRQVROLGDWRUV 1HWZRUNV &RQFOXVLRQV $SSHQGL[ 7KHRQOLQHVXUYH\
2 AR064564 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 3 of 153
The unintended consequences of the RDR initiative, accompanied by rapid change LQWHFKQRORJ\DQGVRFLDOPHGLDLVOLNHO\WRIXUWKHUH[WHQGWKH²DGYLFHJDS³OHDYLQJ DVLGHWKRVHZKRKDYHWRRIHZDVVHWVWRPHULWDWWHQWLRQIURPSURIHVVLRQDODGYLVHUV WKRXJKWKH\PD\ZHOOEHLQQHHGRI½QDQFLDODGYLFH7KLVFDQQRWEHDGHVLUDEOH RXWFRPH$QGVXUHO\ZDVQRWWKHLQWHQGHGOHJDF\RI5'5"%XWWKHJRRGQHZVLVWKDW WKHPDVVLYHVKDNHRXWLQWKHLQGXVWU\ZLOOFUHDWHRSSRUWXQLWLHVIRUWKHPRUHZHOO TXDOL½HGDQGVRSKLVWLFDWHGDGYLVHUVZKRFDQJHQXLQHO\DGGYDOXHZLWKWKHLUFOLHQW SURSRVLWLRQV°DQGWKH\ZLOOEHDLGHGE\WKHKXJHLQFUHDVHLQWUDQVSDUHQF\DIIRUGHG E\WKHHQGWRSODWIRUPUHEDWHVDQGWUDLOFRPPLVVLRQ7KH½WWHVWZLOOVXUYLYHDQGWKDW PXVWEHJRRGIRUVRPHWKLQJDVLPSRUWDQWDVORQJWHUPZHDOWKDFFXPXODWLRQ
i. $GYLVRUQXPEHUVIHOOIURPDWWKHHQGRIWRE\WKHVWDUW RI ZH½QGWKDWWKHUHPDLQLQJ)LQDQFLDO$GYLVHUVDUHXQGXO\RSWLPLVWLF DERXWWKHLURZQEXVLQHVVSURVSHFWVLQWKH5'5ZRUOG+RZHYHUZHEHOLHYHWKDW FKDQJHVLQWKHLQGXVWU\KDYHDVPXFKWRGRZLWKXQIROGLQJWHFKQRORJLFDODQG FRPSHWLWLYHIRUFHVDVZLWK5'5LWVHOI LQGHHG5'5LVRQO\SDUWRIWKHVWRU\RI change.
ii. :HEHOLHYHWKDWDGYLVHUVVXEVWDQWLDOO\XQGHUHVWLPDWHWKHWKUHDWIURP'& offerings, and are overoptimistic about future revenues from unchanging or VORZO\FKDQJLQJEXVLQHVVPRGHOVDQGOR\DOFXVWRPHUV
iii. iv. :H½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½JXUHVDUHIDUORZHUWKDQ the ‘required’ numbers indicated in our survey. This excessive optimism on future UHYHQXHVVXJJHVWVWKDWPDQ\PRUHDGYLVHUVZLOOKDYHWROHDYHWKHLQGXVWU\RU accept far reduced incomes. v. 2IFRXUVHWKHDERYHQXPEHUVGRQRWDFFRXQWHLWKHUIRUUHJLRQDOYDULDWLRQVLQ ZHDOWKRUIRUWKHIDFWWKDWWKHKHDGOLQH½JXUHRI GRHVQRWDOORZIRUWKH DWWUDFWLRQWR,)$VRIWKHJURZWKSRVVLELOLWLHVRIVPDOOHUSRWVRIZHDOWKRYHUWKH OLIHF\FOHRIWKHFOLHQW7KHFRQFHQWUDWLRQRILQYHVWLEOHDVVHWVLQ/RQGRQDQGWKH 6RXWK(DVWWRJHWKHUZLWKXQGRXEWHGSRFNHWVRIDI¾XHQFHQDWLRQDOO\WKHUHIRUH PDNHVJHQHUDOLVDWLRQVIUDXJKWZLWKGLI½FXOW\ AR0645653 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 4 of 153 vi. $GYLVHUVSRLQWWR5'5µVUDLVLQJRIPLQLPXPHGXFDWLRQOHYHOVWR4&)DVD major reason for the timing of the recent reduction in adviser numbers. Those UHPDLQLQJDUHQHDUO\DOOQRZDSSURSULDWHO\TXDOL½HGDQGKHQFHIXUWKHUUHGXFWLRQV IRUWKLVUHDVRQDORQHFDQQRWEHH[SHFWHGXQOHVVFRPSHWHQFHVWDQGDUGVDUH UDLVHG\HWDJDLQ:H½QGWKDW½QDQFLDOSODQQLQJDQGLWVDVVRFLDWHGSURIHVVLRQDO TXDOL½FDWLRQDUHOLNHO\WREHFRPHPRUHLPSRUWDQWDVSDUWRIWKHDGYLVRU\ industry’s proposition. vii. Apart from an increase in the minimum education standards required to remain DVDQDGYLVHUXQGHU5'5DGYLVHUVDOVRVDZLQFUHDVHGUHJXODWRU\DQGFRPSOLDQFH FRVWVDORQJZLWKGLI½FXOWLHVLQDGDSWLQJEXVLQHVVPRGHOVDVWKHRWKHUPDMRU UHDVRQVIRUWKHUHFHQWGHFOLQHLQDGYLVHUQXPEHUV7KHPLQLPXPFDSLWDO UHTXLUHPHQWRI IURPHQGZLOOVWUDLQWKHUHVRXUFHVRIPDQ\VPDOOHU ,)$V7KHVKDUSGHFOLQHLQWKHXQGRXEWHGFURVVVXEVLG\IURPODUJHUFOLHQWV WRVPDOOHURQHVZLOOEHYHU\FKDOOHQJLQJIRUPDQ\DGYLVRUV LIWKHFOLHQWZLWK DVVHWVRI PQSUHYLRXVO\SDLGSDEXWQRZLQWKHPRUHWUDQVSDUHQWZRUOG ZLOOEHSD\LQJRQO\RUEDVLVSRLQWVWKHQWKHSRWHQWLDOIRUFURVVVXEVLG\LV PDVVLYHO\UHGXFHG viii. 7KHPDMRULW\RIDGYLVHUV XVHDWOHDVWRQHSODWIRUPZLWKIXQFWLRQDOLW\ DQGHDVHRIXVHGRPLQDWLQJFRVWDVUHDVRQVIRUWKHLUFKRLFHRISODWIRUP &RQVROLGDWLRQLQWKHSODWIRUPZRUOGLVVHWWRDFFHOHUDWHZLWKWKH)&$´SODWIRUP SROLF\SDSHUµRI$SULO ZLWKWKHEDQQLQJRIFDVKUHEDWHVWRFOLHQWVDQGWKH DGYHQWRIWUDQVSDUHQWFKDUJLQJODUJHUSODWIRUPVZLWKHFRQRPLHVRIVFDOHDUHVHW to increase their market share. ix. ,)$VVHH½QDQFLDOSODQQLQJDVEHLQJWKHPDMRUDFWLYLW\RIWKHDGYLVRU\FRPPXQLW\ JRLQJIRUZDUG7KLVZDVDOVRUH¾HFWHGLQLQWHUYLHZVZKHUHWKH´ZLQQHUVµSRVW 5'5ZHUHRIWHQFKDUDFWHULVHGDVEHLQJPRUHWHFKQLFDOO\VNLOOHGDQGSRVVHVVLQJ RIDVXSHULRUFOLHQWSURSRVLWLRQ x. RIDGYLVHUVVHHYDOXHLQUHPDLQLQJ´LQGHSHQGHQWµWKRXJKH[SHFWWRVHH PRUHXVHPDGHRIWKHUHVWULFWHGDGYLFHPRGHO xi. 1HDUO\DOODGYLVHUV H[SHFWWRFKDUJHFOLHQWVDWOHDVWSDUWLDOO\RQDVVHWV XQGHUDGYLFHUDWKHUWKDQVROHO\RQWKHEDVLVRID½[HGRUKRXUO\IHH xii. ,QYDOXLQJDGYLVRU\EXVLQHVVHVWKHNH\IHDWXUHVPHQWLRQHGE\PRVWUHVSRQGHQWV ZHUHUHFXUULQJWUDLORUIHHLQFRPH6LQFHWKH$SULODQQRXQFHPHQWE\WKH )&$RIWKH²VXQVHW³FODXVHZKLFKIRUELGVWUDLOLQFRPHIURPHYHQSUH5'5VROG IXQGVIURP$SULOWKZHFDQH[SHFWIXUWKHUGRZQZDUGSUHVVXUHRQDGYLVHU UHYHQXHVDQGEXVLQHVVYDOXDWLRQV,QDGGLWLRQLWLVDOVRSRVVLEOHWKDWDFTXLUHUV of advisory businesses prior to this announcement may have overpaid for these businesses. xiii. :LWKSUHVVXUHRQUHYHQXHVWRJHWKHUZLWKLQFUHDVHGFRVWVZHH[SHFWWRVHH DGYLVHUQXPEHUVUHVXPHWKHLUGRZQZDUGWUHQGRQFHWKHHFRQRPLFUHDOLWLHV RIWKHQHZUHJLPH GULYHQSDUWO\E\FRPSHWLWLYHFKDQJHDQGSDUWO\E\5'5DQG VXEVHTXHQWUHJXODWRU\DGMXVWPHQWV EHFRPHPRUHYLVLEOHWRDOOFRQFHUQHG7KLV ZLOOOHDGWRIXUWKHUFRQVROLGDWLRQDQGDEVRUSWLRQRIIXUWKHUERRNVRIEXVLQHVVDW GLPLQLVKLQJSULFHV)RUWKH½QDQFLDODGYLVHUVZLOOLQJWRULVHWRWKHVHFKDOOHQJHV WKHNH\ZLOOEHWRSURYLGHDKLJKO\TXDOL½HGDQGGLIIHUHQWLDWHGSURGXFWSURSRVLWLRQ DERYHDQGEH\RQGWKHEDVLFDGYLFHWKDWKDVEHHQVXI½FLHQWLQWKHSDVWEXWZKLFK LVQRZRXWPRGHG 4 AR064566 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 5 of 153 EXECUTIVE SUMMARY The media attention greeting the introduction of RDR on 1st January, 2013 suggested WKDWDNH\DQGIDLOLQJLQJUHGLHQWLQWKH8.µV½QDQFLDOIDEULFZDV½QDOO\EHLQJNLFNHG LQWRWRXFK:LWKWKHLPSRVLWLRQRI5'5DZKROHVRPHWUDQVSDUHQWFKHDSHUIDLUHU VRSKLVWLFDWHG TXDOL½HGWR4&) QHZZRUOGRI½QDQFLDODGYLFHZRXOGWDNHFHQWUHVWDJH DQGWUDQVIRUPWKHORQJWHUPVDYLQJVµSRVVLELOLWLHVIRUODUJHQXPEHUVRIFRQVXPHUV$V SDUWRIWKLVVWXG\RXUHDUO\FRQYHUVDWLRQVZLWKVHDVRQHGLQGXVWU\SURIHVVLRQDOVVRRQ VXJJHVWHGWKDWVXFKDQHOHFWULI\LQJSURVSHFWZRXOGEHXQOLNHO\LQUHDOLW\:LWKWKH EHQH½WRIPDQ\DQGYDULHGVXFKGLVFXVVLRQVWRJHWKHUZLWKDZLGHUDQJLQJLQGXVWU\ VXUYH\ZHKDYHWRDGPLWVRPHZKDWUHOXFWDQWO\WKDWZKLOHWKHPRUDOO\FRPSHOOLQJFDVH 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Independent advisers IDFHWKHFKDOOHQJHRISURYLGLQJDGYLFHZKLFKLVERWKZKROHRIPDUNHWZLWK UHJDUGWRFKRLFHRISURGXFWSURYLGHUDQGHQFRPSDVVHVDOORIWKHSRWHQWLDOUHWDLO SURGXFWVRSWLRQVDYDLODEOHWR8.LQYHVWRUV5HVWULFWHGDGYLFHPD\HLWKHUEH UHVWULFWHGWRWKHSURGXFWVRIRQHSURYLGHURUUHPDLQ´ZKROHRIPDUNHWµEXWOLPLW WKHLUDGYLFHWRDUHVWULFWHGUDQJHRIUHWDLOSURGXFWV – )LQDOO\ZLWKWKH5'5WKH)&$KRSHVWRLPSURYHWKHTXDOLW\RI½QDQFLDODGYLFHE\ LQFUHDVLQJWKHTXDOL½FDWLRQVQHFHVVDU\WRSUDFWLVHDVD½QDQFLDODGYLVHU $OWKRXJK5'5RQO\FDPHLQWRHIIHFWIURP-DQXDU\VWWKLVSDSHUUH¾HFWV on the impact of the RDR on the adviser market in the UK based on in depth LQWHUYLHZVZLWKVHQLRULQGXVWU\½JXUHVZKLFKZHKDYHDXJPHQWHGZLWKDQ RQOLQHVXUYH\RI½QDQFLDODGYLVHUV7KLVSDSHULVRQHRIWKH½UVWWRH[DPLQHWKH FRQVHTXHQFHVRIWKLVUHJXODWLRQRQWKHDGYLVHUFRPPXQLW\ 6 AR064568 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 7 of 153 ,QRUGHUWRH[DPLQHWKHLPSDFWRIWKH5'5RQWKH½QDQFLDODGYLVHU FRPPXQLW\ZHFRQGXFWHGDVHULHVRILQGHSWKIDFHWRIDFHLQWHUYLHZVZLWK VHQLRULQGXVWU\½JXUHV7KHVHLQWHUYLHZVZHUHSUHGRPLQDQWO\FRPSOHWHG DURXQGWKHWXUQRIDQGLQWRHDUO\)HEUXDU\DQGDVVXFKSUH GDWHGWKHLPSRUWDQW)&$DQQRXQFHPHQWLQ$SULORIWKHEDQQLQJRISUH 5'5WUDLOFRPPLVVLRQIURPDORQJZLWKWKHSODWIRUPSROLF\VWDWHPHQW 7KHLQIRUPDWLRQJOHDQHGLQWKHVHLQWHUYLHZVZDVFUXFLDOLQKHOSLQJXV LGHQWLI\WKHNH\5'5UHODWHGLVVXHVDQGFRQFHUQV°IURPWKHSHUVSHFWLYH RILQGXVWU\H[SHUWV°HQDEOLQJXVWRGHVLJQDQRQOLQHVXUYH\RI½QDQFLDO DGYLVHUV7KLVRQOLQHVXUYH\ZDVVHQWRXWLQHDUO\0DUFKWRMXVWRYHU 8.EDVHG½QDQFLDODGYLVHUV17KHUHVXOWVRIWKHVXUYH\SUHVHQWHGLQWKLV SDSHUDUHEDVHGXSRQWKHUHVSRQVHVWKDWZHKDGUHFHLYHGE\0DUFKWK 7KURXJKRXWWKHSDSHUZHGUDZRQERWKWKHLQGHSWKLQWHUYLHZVDQG WKHVXUYH\WRLGHQWLI\LVVXHVDURXQGWKUHHNH\WKHPHV7KHVHUHODWHWRWKH LPSDFWWKDW5'5KDVKDGRULVOLNHO\WRKDYHRQ – WKHPDUNHWIRU½QDQFLDODGYLFH – DGYLVHUEXVLQHVVPRGHOV DQG – WKHYDOXDWLRQRIDGYLVHUEXVLQHVVHV )URPUHFHQW&DVV%XVLQHVV6FKRROUHVHDUFKZHDOUHDG\NQRZWKDWPDQ\ LQGLYLGXDOVZKRPLJKWKDYHVRXJKWDGYLFHLQWKHSDVWZKHUHWKDWDGYLFHZDV SDLGIRUYLDFRPPLVVLRQDUUDQJHPHQWVZLOOQRWEHZLOOLQJWRSD\IHHVIRULWLQ the future2,WZRXOGVHHPUHDVRQDEOHWRDVVXPHWKHQWKDWWKHFKDQJHIURP DSUHGRPLQDQWO\FRPPLVVLRQEDVHGPRGHOWRDIHHEDVHGRQHZLOOKDYH IXQGDPHQWDOO\FKDQJHGWKH8.µVPDUNHWIRU½QDQFLDODGYLFH%XWDTXHVWLRQ ZKLFKLVW\SLFDOO\QRWDVNHGLV ZRXOGVXFKFKDQJHVKDYHEHHQRFFXUULQJ DQ\ZD\WKURXJKWKHQDWXUDOHYROXWLRQRIFRPSHWLWLYHIRUFHV",Q6HFWLRQRI WKLVUHSRUWZHIRFXVRQWKHDGYLVHUVµYLHZVRIWKHLPSDFWRIWKHVHFKDQJHV RQWKHLUPDUNHW,IWKHUHLVOLNHO\WRKDYHEHHQDIXQGDPHQWDOFKDQJHLQWKH PDUNHWIRU½QDQFLDODGYLFHLWZRXOGVHHPHTXDOO\OLNHO\WKDWWKHEXVLQHVV PRGHOVRIDGYLVHUVZLOOKDYHFKDQJHGRUZLOOQHHGWRFKDQJHLQWKHIXWXUHWR DFFRPPRGDWHWKHFKDQJHLQWKHPDUNHWIRUDGYLFH$EXVLQHVVPRGHOWKDW PD\KDYHEHHQ½WIRUSXUSRVHLQWKHSUH5'5ZRUOGPD\QRWEHVRLQDQ 5'5ZRUOG:HDGGUHVVTXHVWLRQVDQGLVVXHVVXUURXQGLQJDGYLVHUµEXVLQHVV PRGHOVLQ6HFWLRQRIRXUUHSRUW)LQDOO\WKHUHDUHDQXPEHURIUHDVRQVZK\ VRPHDGYLVHU½UPVPD\QRWEHZLOOLQJWRFRQWLQXHLQWKH5'5ZRUOG HTXDOO\ WKHUHPD\EHRWKHUDGYLVHU½UPVWKDWVHHWKLVDVDQLGHDORSSRUWXQLW\WR expand their businesses. 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AR064571 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 10 of 153 1 THE IMPACT OF RDR ON THE MARKET FOR FINANCIAL ADVICE 1.1 RDR: GOOD OR BAD OR… ? 7KH5'5KDVEHHQLQYDULDEO\GHVFULEHGLQWKHPHGLDDQGE\VRPHLQGXVWU\ FRPPHQWDWRUVDVEHLQJDVUHYROXWLRQDU\DVLQGXVWU\FKDQJLQJDQGDV UHGH½QLQJWKH½QDQFLDODGYLFHODQGVFDSH%XWKRZGRDGYLVHUVVHHWKH5'5 UHJLPH"7KHUHVSRQVHRIWKHLQWHUYLHZHHVZLWKUHJDUGWRWKHRYHUDOOLPSDFWRI WKH5'5RQWKHLUEXVLQHVVZDVUDWKHUPL[HG6RPHYLHZHGWKHQHZUHJXODWRU\ IUDPHZRUNDVEHLQJLOOWKRXJKWRXWDQGIHOWWKDWLWZRXOGKDYHDQHJDWLYH LPSDFWDFURVVWKHLQGXVWU\+RZHYHURWKHUUHVSRQGHQWVVDLGWKDWWKH\KDG EHHQSUHSDULQJIRUWKH5'5UHYROXWLRQVLQFHLWZDV½UVWPRRWHGLQDQG YLHZHGLWVLPSRVLWLRQDVOLNHO\WREHDSRVLWLYHFDWDO\VWRQHWKDWZRXOG½QDOO\ KHUDOGD´SURSHUµPDUNHWIRU½QDQFLDODGYLFHLQWKH8. 7KHUHZDVOLWWOHHYLGHQFHRIDVSOLWLQRSLQLRQRQWKHOLNHO\LPSDFWRI5'5 on the mass market judging by the responses to our survey. 53% of survey UHVSRQGHQWVVXJJHVWHGWKDWWKHPDVVPDUNHWIRU¼QDQFLDODGYLFHZRXOGEH ‘less attractive’ to advisers in the RDR world, while 25% said that it would make the mass market ‘very unattractive’ )LJXUH $GYLVRUVZKRYLHZWKHPDUNHWDVXQDWWUDFWLYHDUHOLNHO\WRHLWKHUOHDYHWKH LQGXVWU\HQWLUHO\DWWHPSWWRIRFXVRQPHGLXPWRKLJKQHWZRUWKFOLHQWVZKHUH SURYLGLQJVHUYLFHVZLOOEHFRPHPRUHYLDEOHRUXWLOLVHDPRGHORIUHVWULFWHG DGYLFH,QGHHGWKHRYHUZKHOPLQJYLHZRIPRVWRIRXULQWHUYLHZHHVZDVWKDW WKHLPSOHPHQWDWLRQRI5'5ZRXOGOHDGWRDSRODUL]DWLRQDQGIUDJPHQWDWLRQ RIWKHDGYLVRU\PDUNHW7KHFRQVHTXHQFHRIWKLVZLOOEHDUHGXFWLRQLQWKH QXPEHURIPDVVPDUNHW,)$VZKLFKPD\FUHDWHD²JXLGDQFHJDS4³ZKHUH PDQ\FRQVXPHUVPD\½QGWKHPVHOYHVZLWKRXWLQGHSHQGHQW½QDQFLDODGYLFH GHVSLWHVWLOOKDYLQJDGHPDQGIRULW$OWKRXJKVKULQNLQJQXPEHUVRI,)$VPD\ ZHOOEHRQHRIWKHFRQVHTXHQFHVRIWKHIXOOLPSDFWRIWKLVQHZUHJXODWLRQRQ WKHLQGXVWU\WKDWIXOOLPSDFWPD\QRWEHIHOWLPPHGLDWHO\Although 50% of those surveyed suggested that the major impact of the RDR would be felt in 2013, 44% suggested that 2014 would be the year when the major impact is felt )LJXUH Figure 1.1: What impact will the RDR have on the way advisers view the mass market? 60 53% 50 40 30 25% 20 % of respondents 13% 10 9% 0% 0 Much more More Less Very No change attractive attractive attractive unattractive in view 10 AR064572 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 11 of 153 Figure 1.2: In what year do you think that the major Figure 1.3: What proportion of clients do you think impact of the RDR will be felt by the adviser industry? you will retain in the RDR environment? 60 80 50 50% 70 69% 44% 60 40 50 30 40 20 30 % of respondents % of respondents 20 17% 10 11% 10 3% 3% 2%0% 2% 0 0 20122013 2014 2015 Not 24% - 49% - 74% - 99% - 100% sure 0% 25% 50% 75% Indeed, despite the concerns raised by some or our 1RWZLWKVWDQGLQJWKHSUHFHGLQJFRPPHQWVWKHUH LQWHUYLHZHHVDERXWWKHXQDWWUDFWLYHQDWXUHRIWKH DUHDQXPEHURISRVVLEOH5'5UHODWHGIDFWRUVWKDW PDUNHWIRU½QDQFLDODGYLFHLQDQ5'5ZRUOG FRXOGGULYHDGHFOLQHLQDGYLVHUQXPEHUV:HDVNHG of the advisers in our survey suggested that they RXUVXUYH\SDUWLFLSDQWVWRLGHQWLI\WKHVHSRVVLEOH ZRXOGEHUHWDLQLQJWR RIWKHLUFOLHQWV IDFWRUV WKHUHVXOWVDUHGHWDLOHGLQ)LJXUH7KH ZKLOHVWDWHGWKDWWKH\ZRXOGUHWDLQRI ½JXUHVKRZVWKDW47% of survey participants said WKHLUFOLHQWV )LJXUH 7KLVLQWXUQVXJJHVWVWKDW that an inability to meet the minimum standard WKHPDUNHWZLOOJRWKURXJKDQ²HYROXWLRQDU\³UDWKHU IRUSURIHVVLRQDOLVPWKH4&)/HYHOTXDOL¼FDWLRQ WKDQD²UHYROXWLRQDU\³SURFHVVRIFKDQJHVRPHRI would be the main reason why advisers might ZKLFKPD\DOUHDG\KDYHEHHQXQGHUZD\ choose to leave the industry'LVFXVVLRQVZLWKRXU LQWHUYLHZHHVFRUURERUDWHWKLVYLHZ,WVHHPVWKDW VRPHDGYLVHUVKDGIRXQGLWGLI½FXOWWRFRPSOHWH 1.2 THE IMPACT ON WKHH[DPVZKLOHVLPXOWDQHRXVO\UXQQLQJWKHLU ADVISER NUMBERS EXVLQHVV+RZHYHUZHQRWHGWKDWDWWKHRWKHUHQG ,QWHUYLHZHHVVXJJHVWHGWKDWRQHFRQVHTXHQFH RIWKHVFDOHVRPHDGYLVHUVKDYHEHHQDEOHWRJR RIWKH5'5ZRXOGEHDIDOOLQDGYLVHUQXPEHUV,W beyond the minimum requirements, achieving a LVFOHDUWKDWPDQ\DGYLVRUVZLOO½QGLWGLI½FXOWWR /HYHOTXDOL½FDWLRQDQGWKHVWDWXVRI&KDUWHUHG make a smooth transition from a commission- )LQDQFLDO3ODQQHU7KHVHDGYLVHUVKDYHXQGHUWDNHQ EDVHGPRGHOWRRQHEDVHGRQIHHVZKLFKPD\OHDG WKLVDGGLWLRQDOTXDOL½FDWLRQLQRUGHUWRGLIIHUHQWLDWH WKHPWROHDYHWKHLQGXVWU\+RZHYHULQDQLPSRUWDQW WKHPVHOYHVLQWKHPDUNHW$OWKRXJKWKHUHKDYH ZD\WKLVLVSRVVLEO\PLVVLQJWKHEXVLQHVVUHDOLW\RI EHHQVRPHGLVFXVVLRQVZLWKLQWKHLQGXVWU\ WKHDGYLVRU\LQGXVWU\ZKLFKLVWKHH[WHQWWRZKLFK UHJDUGLQJWKHSRVVLELOLW\WKDWWKH´&KDUWHUHGµ DGYLVRUVDUHJRLQJWRUHO\VROHO\RQIHHEDVHG OHYHOZRXOGEHWKHQHZLQGXVWU\VWDQGDUGZH UHYHQXHJRLQJIRUZDUG"&HUWDLQO\PDQ\DGYLVRUV EHOLHYHWKDWWKHPDMRULW\RIDGYLVHUVZLOOIRFXV KDYHDOZD\VFKDUJHGIHHVDQGZLOOFRQWLQXHWRGR RQPDLQWDLQLQJWKHLU/HYHOVWDWXVE\FRPSO\LQJ VR RWKHUVZLOOFRQWLQXHWRFKDUJHDSHUFHQWDJH ZLWKWKHUHODWHG&3'UHTXLUHPHQWVLQWKHVKRUWWR RQDGYLVHGDVVHWVZLWKOLWWOHFKDQJLQJH[FHSWWKH PHGLXPWHUPXQOHVVRWKHUZLVHPDQGDWHGE\WKH ZD\WKHFDVK¾RZVWRWKHPZKLFKRIFRXUVHLV )&$LQWKHIXWXUH:KLOHWKHPDMRULW\RIDGYLVHUV important for transparency. In November 2012, KDYHXQGHUVWRRGWKHQHHGWRFRPSO\ZLWKWKH WKH)6$HVWLPDWHGWKDWWKHUHFRXOGEHDUHGXFWLRQ 5'5UHODWHGTXDOL½FDWLRQUHTXLUHPHQWVVRPH RIWKHDGYLVHUSRSXODWLRQRIDURXQG+RZHYHU LQWHUYLHZHHVVXJJHVWHGWRXVWKDWVRPHDGYLVHUV LQGXVWU\HVWLPDWHVRIWKHSRWHQWLDOGHFOLQHLQ PLJKWFRQWLQXHWRDGYLVHFOLHQWVZLWKRXWWKH QXPEHUVUDQJHIURPDURXQG5WRFORVHWR6. UHTXLVLWHTXDOL½FDWLRQV WKHVHKDYHEHHQODEHOOHG 7KHDGYHQWRIWKH´VXQVHWµFODXVHUHJDUGLQJWUDLO ´JKRVWDGYLVHUVµE\WKHSUHVV+RZHYHURQHZRXOG FRPPLVVLRQDQQRXQFHGE\WKH)&$LQ$SULO LPDJLQHWKDWWKH\FRXOGRQO\GRVRIRUDUHODWLYHO\ ZLOOXQGRXEWHGO\SXWIXUWKHUSUHVVXUHRQLQGXVWU\ short period of time, before it came to the attention numbers. RIWKHUHJXODWRU 7KH*XLGDQFHJDSUHSRUW $QLQYHVWLJDWLRQRIWKH8.µVSRVW5'5VDYLQJVDQGLQYHVWPHQWODQGVFDSH$&ODUH-DQXDU\ 5. Aviva Investors 2012 6. Ernst & Young 2012 AR06457311 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 12 of 153 +RZHYHULQDELOLW\RUXQZLOOLQJQHVVRIDGYLVHUVWR DIWHUEHLQJGHOD\HGE\WZR\HDUVWRSURYLGHDGHTXDWH DFKLHYHWKHSURIHVVLRQDOTXDOL½FDWLRQVQHFHVVDU\ WLPHIRUDGYLVHUVWRFKDQJHWKHLUEXVLQHVVPRGHOV to continue to operate in the industry is by no 7KHUHTXLUHPHQWVVWLSXODWHWKDW½UPVVKRXOGKROG PHDQVWKHRQO\OLNHO\GULYHURIDGYLVHUH[LWV)LJXUH DPLQLPXPRI RUSRVVLEO\WKUHHPRQWKµV DOVRVKRZVWKDWDVLJQL½FDQWSURSRUWLRQRIRXU H[SHQGLWXUH WKLVLVQRWDQLQVLJQL½FDQWVXPIRUD VXUYH\SDUWLFLSDQWVIHOWWKDWDQLQDELOLW\WRDGDSW VPDOOEXVLQHVVSDUWLFXODUO\LIUHYHQXHVDUHDOUHDG\ DGYLVHUEXVLQHVVPRGHOV WKHLQFUHDVHG XQGHUWKUHDWIURPRWKHUZLGHULQGXVWU\DQG5'5 UHJXODWRU\FRVWVDVVRFLDWHGZLWK5'5 DQG UHODWHGFKDQJHV)XUWKHUDGGLWLRQDOUHJXODWLRQV RWKHUUHJXODWRU\UHTXLUHPHQWV ZRXOGDOVR DUHSODQQHGDOWKRXJKWKH)&$KDYHGHOD\HGWKH EHVLJQL½FDQWIDFWRUVLQDQDGYLVHUµVWROHDYHRUWR LPSOHPHQWDWLRQIURP'HFHPEHUWR'HFHPEHU remain in the industry. ,IWKHVHQHZFDSLWDOUXOHVDUHVWULQJHQWWKLV PD\SUHFLSLWDWHDIXUWKHUZDYHRIOHDYHUV 6RZKDWKDVEHHQWKHLPSDFWRQDGYLVHUQXPEHUV VRIDU"7KHIDFWRUVDGGUHVVHGLQ)LJXUHVHHPWR 2QHDOWHUQDWLYHWROHDYLQJWKHLQGXVWU\PLJKWEHWR KDYHFRPELQHGWRFUHDWHDQLQLWLDO´ZDYHµRILQGXVWU\ MRLQDQHWZRUNZKLFKFRXOGKHOSDOOHYLDWHVRPHRI H[LWV%\WKH½UVWGD\RI5'5WKHQXPEHURI,)$V WKHUHJXODWRU\EXUGHQV,WZDVVXJJHVWHGWRXVWKDW DQGWLHGDGYLVHUVRSHUDWLQJZDVDURXQG ½QDQFLDODGYLVHUVPD\EHDEOHWRMRLQDQHWZRUN GRZQFRPSDUHGZLWKWKHRSHUDWLQJLQ WRRIIVHWFDSLWDOUHTXLUHPHQWV KRZHYHU RI 'HFHPEHU )6$½JXUHV0DUFKWK WKHUHVSRQGHQWVWRRXUVXUYH\ZHUHQRWSDUWRID 7KH½UVWZDYHPD\ZHOOEHH[LWVUHODWHGWRWKHQHZ QHWZRUN,QMRLQLQJDQHWZRUNWKHDGYLVHUXVXDOO\ TXDOL½FDWLRQUHTXLUHPHQWV+RZHYHUJLYHQWKDW DOVRREWDLQVSURIHVVLRQDOLQGHPQLW\LQVXUDQFH 3,, WKHRYHUZKHOPLQJPDMRULW\RIWKRVHUHPDLQLQJDUH DVSDUWRIWKHSDFNDJH7KH)&$KDVVWLSXODWHGWKDW QRZTXDOL½HGZLWKRQO\DYHU\VPDOOQXPEHUFORVH LQGHSHQGHQW½UPVQHHGWRKROGLQVXUDQFHZKLFK WRFRPSOHWLRQRUJLYHQWKHPRQWKJUDFHSHULRG FRYHUVWKHPIRUWKHIXOOUDQJHRIUHWDLOLQYHVWPHQW DOORZHGE\WKH)&$ZHZRXOGQRWH[SHFWWKLVWREH SURGXFWVDQGDOVRKROGDGGLWLRQDOFDSLWDODV the main factor in any further shrinkage. LQVXUDQFHLIDQ\SURGXFWVDUHH[FOXGHGIURPWKH LQVXUDQFHSROLF\+RZHYHUWKHLQFUHDVLQJFRVWRI3,, )XUWKHUH[LWVPD\RFFXUDVWKH½QDQFLDO ZLOOLQFUHDVHWKHFRVWRIMRLQLQJVXFKQHWZRUNV requirements of running an advisory business in the future become more apparent. Our research %XWZRXOGWKHUHKDYHEHHQDGULIWGRZQZDUGVLQ LQGLFDWHVWKDWWKHQH[W´ZDYHµRIOHDYHUVPD\EH DGYLVHUQXPEHUVUHJDUGOHVVRI5'5"2IFRXUVHLW WULJJHUHGE\WKHGLI½FXOWLHVWKDWPD\DULVHIURP LVLPSRVVLEOHWRWHOOFRQFOXVLYHO\EXWWKHIRUFHV PHHWLQJWKHFDSLWDODGHTXDF\UHTXLUHPHQWVZKLFK PHQWLRQHGLQWKHLQWURGXFWLRQFHUWDLQO\VXJJHVW DUHGXHWREHLPSOHPHQWHGRQ'HFHPEHU WKDWWKLVLVSRVVLEOH Figure 1.4: Which of the following reasons would be most likely to cause advisers to leave the industry? Increased costs due to other 12% regulatory requirements Increased costs due to RDR 11% Increased capital adequacy requirements 6% Fee/margin pressure 5% Cash flow challenges 11% Elimination of trail commission 5% Deciding that consumers will be unwilling to pay for advice 11% Not meeting the minimum standards 16% for professionalism Inability to adopt the business model 12% Difficulty in creating a proposition that 11% people are willing to... 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% % of respondents 12 AR064574 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 13 of 153 1.3 THE RE-EMERGENCE OF DIRECT SALES FORCES The imposition of the RDR has brought about a clear shift in the distribution landscape. The disappearance of the commission-based model has created a clear distinction between advice on the one hand and product providers on the other. %HFDXVHRIWKLVDVVHWPDQDJHUVOLIHFRPSDQLHV DQGRWKHUSURYLGHUVKDYHVRXJKWWRGHYHORSQHZZD\VWRJHW WKHLUSURGXFWVWRPDUNHWDQGWRUHJDLQVRPHFRQWURORYHU GLVWULEXWLRQ,QWHUYLHZHHVVXJJHVWHGWKDWWKHSURVSHFWRID GHFUHDVHLQDGYLVHUQXPEHUVWRJHWKHUZLWKDQLQFUHDVHLQ ´RUSKDQHGµDQGORZYDOXHFOLHQWVPD\HQFRXUDJHELJSURYLGHUV WRODXQFKWKHVRUWRIGLUHFWVDOHVIRUFHVWKDWZHUHFRPPRQLQ WKH VDQG V,WZDVDUJXHGWKDWWKHVHODUJHSURGXFW SURYLGHUV°ZKRPD\KDYHKXQGUHGVRIWKRXVDQGVRIVPDOO ORZYDOXHSROLF\KROGHUVRIWKHLULQYHVWPHQWSURGXFWV°ZRXOG HIIHFWLYHO\XWLOLVHVDOHVWHDPVWRWDUJHWORZYDOXHRURUSKDQHG FOLHQWVE\RIIHULQJDUHVWULFWHGVHUYLFHZLWKDOLPLWHGUDQJHRI SURGXFWVZKLOHFKDUJLQJD5'5FRPSOLDQWIHH,QGHHG VDZWKHUHODXQFKRIGLUHFWVDOHVIRUFHWHDPVIURPSURYLGHUV VXFKDV3UXGHQWLDO+RZHYHUGHVSLWHWKHUHSRUWHGSURVSHFWV RIDUHVXUJHQFHLQWKLVDUHDRIRXUVXUYH\UHVSRQGHQWV VXJJHVWHGWKDWWKHUHZRXOGQRWEHVXEVWDQWLDOJURZWKLQGLUHFW VDOHVIRUFHV )LJXUH DOWKRXJKVDLGWKDWWKHUHZRXOG EHZKLOHLQGLFDWHGWKDWWKH\ZHUHQRWVXUH:KLOHLQLWLDOO\ SX]]OLQJJLYHQWKHKLJKSUR½OHDQQRXQFHPHQWUHJDUGLQJWKHVH LQLWLDWLYHVLWLVHQWLUHO\FRQVLVWHQWZLWKDGYLVHUVEHOLHYLQJ WKDWWKH\ZLOOKDQJRQWRWKHLUH[LVWLQJFOLHQWV VHH)LJXUH DERYH $OWKRXJKWKHUHHPHUJHQFHRIGLUHFWVDOHVDFURVV WKHZLGHULQGXVWU\LVVWLOODWDQHDUO\VWDJHZHEHOLHYHWKDW the economics of launching (or re-launching) a direct sales force for large providers is potentially so compelling that ¼QDQFLDODGYLVHUVPD\ZHOOKDYHXQGHUHVWLPDWHGWKHSRWHQWLDO threat that such growth could pose for their businesses. )XUWKHUPRUHDQGSHUKDSVRIPRUHLPSRUWDQFHDVLJQL¼FDQW growth in direct sales forces would seem to be counter to everything the FCA have been trying to achieve with RDR. Figure 1.5: Do you think that there will be a substantial growth in Direct Sales Forces? Don’t know 5% Yes 25% Not sure 28% No 42% AR06457513 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 14 of 153 1.4 PLATFORMS IN AN RDR WORLD *LYHQWKDWSODWIRUPVDSSHDUWRFRQVWLWXWHVXFKDQ 7KHJURZWKRIDGYLVHGSODWIRUPVZKHUHWKH LPSRUWDQWSDUWRIWKH½QDQFLDODGYLFHODQGVFDSH DGYLVHULQWHUDFWVZLWKWKHSODWIRUPRQEHKDOI ZHZHUHNHHQWRXQGHUVWDQGZKDWSODWIRUPIHDWXUHV RIWKHFOLHQWKDVEHHQSKHQRPHQDOLQUHFHQW DUHYDOXHGPRVWE\DGYLVHUVIn considering the \HDUV,Q4RIWKHWRWDODPRXQWRIDGYLVHG choice of a platform, 46% of advisers were focusing DVVHWVRQSODWIRUPVZDV ELOOLRQWKLV½JXUH on the functionality available, indicating that ease UHSUHVHQWHGJURZWKRI RYHUWKHSUHYLRXV of use ranks relatively highly for advisers )LJXUH quarter. As at December 2012, the assets under ,QWHUHVWLQJO\RQO\RIRXUUHVSRQGHQWVUDQNHGFRVW DGYLFHRQSODWIRUPVKDGUHDFKHG EQ. Our DVWKHPRVWLPSRUWDQWIDFWRULQFKRRVLQJDSODWIRUP VXUYH\ZDVFRQGXFWHGEHIRUHWKHORQJDZDLWHG )&$µV´SODWIRUPSROLF\VWDWHPHQWµRI$SULO +RZFRXOGWKHUHFHQW)&$SODWIRUPSROLF\SDSHU EXWVWLOOUHYHDOVVRPHUHOHYDQWDQGLQWHUHVWLQJ LPSDFWWKHVHLVVXHV"8QGHUWKHVHUXOHVSURGXFW features. We asked our survey respondents about providers are banned from providing cash rebates WKHLPSRUWDQFHRISODWIRUPVIRUWKHLUEXVLQHVVHV WRSODWIRUPVIURP$SULODQGIURP$SULO RIUHVSRQGHQWVFRQ¼UPHGWKDWWKH\ZLOO SODWIRUPVZLOOKDYHWRHQVXUHWKDWWKH\DSSO\D use multiple advised platforms in their business ²SODWIRUPFKDUJH³WRFXVWRPHUVIRUERWKQHZDQG while 27% said that they would have one primary OHJDF\EXVLQHVV SODWIRUPVPXVWPDNHWKHFRVW platform )LJXUH 2QO\RIUHVSRQGHQWVVDLG RIWKHLUVHUYLFHVFOHDUWRLQYHVWRUVZLWKDIXOO\ WKDWWKH\ZRXOGQRWXVHDSODWIRUP7KHVHUHVXOWV GLVFORVHGDQGWUDQVSDUHQWFKDUJH7KLVDOVRDSSOLHV XQGHUOLQHZKDWDQLPSRUWDQWFRPSRQHQWRIWKH WRQRQDGYLVHGSODWIRUPV7KHVHUXOHVDUHLQWHQGHG ½QDQFLDODGYLFHODQGVFDSHSODWIRUPVKDYHEHFRPH to improve transparency for investors and restrict $GYLVHUV½QGSODWIRUPVWREHRIEHQH½WEHFDXVH WKHLQ¾XHQFHRISURGXFWSURYLGHUVDQGSODWIRUPV WKH\SURYLGHDQDJJUHJDWHGYLHZRIFOLHQWµDVVHWV on the promotion of one fund over another and and the performance of these assets across the DUHLQOLQHZLWK5'5LQHQVXULQJWKDWFDVKUHEDWHV DGYLVHUµVFOLHQWEDVH3ODWIRUPVDOVRKHOSWRUHGXFH cannot be used to offset charges for advice. This WKHSDSHUZRUNDQGDGPLQLVWUDWLRQRIDQDGYLVHUµV ZLOOLQHYLWDEO\DFFHOHUDWHWKHPRYHWRFOHDQVKDUH EXVLQHVV Figure 1.6: What is your view of the importance of Figure 1.7: Which one of the following factors is platforms for your business in the future? most important to you when selecting a platform? 80 Variety of products 17% 70 69% Cost 20% 60 50 40 30 27% % of respondents 20 10 3% 2% Robustness 0 0% 17% I will use a I will I will Not Don’t number of have one not use a sure know Functionality different primary platform 46% platforms platform 14 AR064576 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 15 of 153 These results indicate that the likely platform Figure 1.8: What do you see as the primary role of winners in a RDR world will not necessarily be the IFA in the future? the cheapest, but instead the ones that offer the best functionality, functionality that presumably Another role 5% Fund selector 0% continue to improve with ongoing technology advances. However, it seems very likely to us that Financial this would have happened anyway, even without planner 39% RDR. And indeed, the April,2013 paper by the FCA on platform charging will only accelerate consolidation in the sector, with the larger platforms likely to be the winners as transparent costing will favour their lower average costs which go together with scale. Cost is likely to emerge as WKHPRVWVLJQL¼FDQWIDFWRUJRLQJIRUZDUG A combination 1.5 THE ROLE OF THE IFA IN of both 56% A RDR WORLD ,QWKHSDVW½QDQFLDODGYLVHUVPD\KDYHEHHQVHHQ DVEHLQJWKH²IXQGVHOHFWRUV³LQWKHGLVWULEXWLRQ SURFHVV+RZHYHUWKHDUULYDORI5'5DQGWKHUHODWHG IHHEDVHGDGYLVRU\PRGHOKDVQRZHIIHFWLYHO\ VRFLHW\RQHZRXOGH[SHFWDJUHDWHUZLOOLQJQHVV separated the cost of investment products from the E\FOLHQWVDFURVVWKHZHDOWKVSHFWUXPWRE\SDVV cost of their distribution. An interesting question is DGYLVHUVZLWK',<LQYHVWLQJ,QGHHGHDUOLHUUHVHDUFK ZKHWKHUWKLVKDVKDSSHQHGLQSUDFWLFH E\&DVVKDVDOUHDG\LGHQWL½HGWKDWDVLJQL½FDQW SURSRUWLRQRIWKH8.µVSRSXODWLRQZRXOGEHZLOOLQJ &RQVXPHUVDQGWKHLU½QDQFLDODGYLVHUVQRZVLWRQ WRXVHD²½QDQFLDOJXLGDQFHVHUYLFH³LQVWHDGRI WKHVDPHVLGHRIWKHWDEOH7KLVLQWXUQPHDQVWKDW XVLQJD½QDQFLDODGYLVHUWRKHOSWKHPPDNHWKHLU WKHUROHRI½QDQFLDODGYLVHUVPD\DOVREHFKDQJLQJ savings and investment decisions. These non- IURPWKHUROHRI²IXQGVHOHFWRU³LQWKHGLVWULEXWLRQ DGYLVHGRUGLUHFWWRFRQVXPHU '& SODWIRUPV SURFHVVWRRQHRI²½QDQFLDOSODQQHU³,QGHHGRXU FRQVLVWRIHLWKHU,)$EUDQGHGSODWIRUPVIXQG LQWHUYLHZHHVVXJJHVWHGWKDWWKHWUDGLWLRQDO´,)$µ PDQDJHURZQHGSODWIRUPVRUH[HFXWLRQRQO\ ODEHOZRXOGEHFRPHUHGXQGDQWLQWLPHDVWKH VWRFNEURNHUSODWIRUPV7RGD\WKLVQRQDGYLVHG IRFXVRIWKHUROHFKDQJHV:HDVNHGRXUVXUYH\ WHFKQRORJ\LVDFFHVVHGGLUHFWO\E\RYHU SDUWLFLSDQWVIRUWKHLUYLHZVRIWKHIXWXUHUROHRI PLOOLRQSULYDWHLQYHVWRUVLQWKH8.+DUJUHDYHV WKH²,)$³7KHVHUHVXOWVDUHSUHVHQWHGLQ)LJXUH /DQVGRZQHDQG)LGHOLW\DUHWZRRIWKHEHVWNQRZQ 2QO\RIUHVSRQGHQWVVDZWKHUROHDVEHLQJ VXFKRIIHULQJV7KH'&SODWIRUPPDUNHWKDG SUHGRPLQDQWO\WKDWRIDIXQGVHOHFWRUZKLOH ELOOLRQLQDVVHWVXQGHUDGPLQLVWUDWLRQDVDW YLHZHGWKHSULPDU\IXWXUHUROHDVWKDWRID½QDQFLDO 6HSWHPEHU7KHJURZWKRIWKHVHSODWIRUPV SODQQHU+RZHYHUWKHPDMRULW\RIRXUUHVSRQGHQWV FRXOGFRQWLQXHWRUHSUHVHQWDFRQVLGHUDEOHVKLIWLQ VXJJHVWHGWKDWWKHSULPDU\UROHZRXOGEHD WKHVRXUFHRI½QDQFLDODGYLFHVRXJKWE\FRQVXPHUV FRPELQDWLRQRIIXQGVHOHFWRUDQG½QDQFLDOSODQQHU given that the Cass research indicated that just RYHUPLOOLRQ8.DGXOWVZRXOGQRWEHZLOOLQJ +RZHYHUSHUKDSVWKHELJJHVWFKDOOHQJHIDFLQJ,)$V WRSD\IRU½QDQFLDODGYLFHHowever, despite the DVWKH\WU\WRUHGH½QHWKHLUUROHLQD5'5ZRUOGZLOO obvious challenge of these D2C websites our FRPHIURPZHEEDVHGVHUYLFHV2XULQWHUYLHZHHV survey revealed that only 9% of our respondents LQGLFDWHGWKDWWKHVHVHUYLFHVFRXOGUHSUHVHQWD viewed them as a threat to their business. Again we SDUWLFXODUFKDOOHQJHWRWKRVHDGYLVHUVWKDWKDG feel that they may have underestimated at least DODUJHSUH5'5EDVHRI²ORZYDOXH³FOLHQWV%XW the long-term threat of such services to VXFKWHFKQRORJLFDOLQQRYDWLRQVZHUHZHOOLQSODFH their businesses. SUH5'5DQGLQDQLQFUHDVLQJO\FRPSXWHUOLWHUDWH 7KH3ODWIRUXP 7KH3ODWIRUXP AR06457715 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 16 of 153 1.6 CONCLUSIONS 7KHUHVXOWVRIRXUVXUYH\VLQWHUYLHZVDQGRXURZQ DQDO\VLVKDYHOHGXVWRWKHFRQFOXVLRQVWKDW5'5ZLOO WHQGWRIDYRXUVWURQJHUPRUHSURFHVVIRFXVVHG½UPV RI½QDQFLDODGYLVHUV,WVHHPVOLNHO\WRXVWKDWWKHVH ½UPVZLOOQRWRQO\VXUYLYHLQWKH5'5ZRUOGEXWZLOO DOVRSURVSHUIURPWKHQHZUHJXODWRU\HQYLURQPHQW DVRYHUDOODGYLVHUQXPEHUVGHFOLQHDQGDVWKH\IRFXV RQKLJKHUYDOXHFOLHQWVWKDWPD\KDYHEHFRPHDGYLFH RUSKDQVRUWKDWWKDWPD\KDYHEHHQWUDGLWLRQDOO\ VHUYLFHGE\ZHDOWKPDQDJHPHQWFRPSDQLHV7KLV ZRXOGDOVRPHDQRIFRXUVHWKDW½UPVRIVPDOO advisers, the ‘cottage industry’ component of the ½QDQFLDODGYLFHLQGXVWU\ZLOOVKULQN %H\RQGWKLVFKDQJHZH½QGHYLGHQFHWRVXJJHVWWKDW WKHPDUNHWIRU½QDQFLDODGYLFHZLOOSUREDEO\EHFRPH ELIXUFDWHG2QWKHRQHKDQGWKHUHZLOOEHIDFHWRIDFH EHVSRNHDGYLFHIRULQGLYLGXDOFOLHQWV ZKLOHRQWKH RWKHUWKHUHZLOOEHJURZWKLQUHVWULFWHGDGYLFHVHOOLQJ DOLPLWHGVHOHFWLRQRISURGXFWVZLWKDOLJKWWRXFK HQJDJHPHQWZLWKWKHFOLHQW7KHUHVWULFWHGPRGHOPD\ ZHOOWXUQRXWWREHGULYHQSUHGRPLQDQWO\E\WKHUH HPHUJHQFHRIWKHGLUHFWVDOHVIRUFHVRIODUJHSURGXFW SURYLGHUVDVWKH\ORRNWRUHJDLQFRQWURORIWKHLU GLVWULEXWLRQFKDQQHOVWKRXJKZHGRQRWVHHPXFK evidence of this yet. If it does happen in the near to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ur members do QRWOLHDZDNHDW QLJKWZRUU\LQJ DERXWZKHWKHUWKH\ are going to beat the FTSE – they OLHDZDNHDWQLJKW ZRUU\LQJDERXW 16 ORVLQJPRQH\ AR064578 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 17 of 153 %XWDNH\TXHVWLRQZKLFKKDV not been addressed by many, if any, commentators on the impact on the industry for ½QDQFLDODGYLFHLVZKHWKHU many of these changes might KDYHEHHQKDSSHQLQJDQ\ZD\" &HUWDLQO\LWVHHPVOLNHO\WRXV IRUH[DPSOHWKDWWKHSRSXODULW\ RI'&ZHEEDVHGVHUYLFHV VXFKDV+DUJUHDYHVRU)LGHOLW\ ZRXOGKDYHFRQWLQXHGWRJURZ and to threaten the business PRGHOVRIDGYLVHUVIRFXVVLQJ more on the mass market IRUDGYLFHDQ\ZD\$VVXFK DOWKRXJK5'5KDVFOHDUO\GULYHQ WKHSURIHVVLRQDOLVDWLRQRIWKH advice industry through raised TXDOL½FDWLRQUHTXLUHPHQWVWKH WHFKQRORJLFDOGHYHORSPHQWV WKDWZHKDYHVHHQUHFHQWO\ DQGWKHJURZLQJGHPDQG for transparency amongst FRQVXPHUVPD\ZHOOKDYH continued to change the industry LQDZD\WKDWZRXOGKDYHEHHQ FRQVLVWHQWZLWKWKH)&$µVDLPV even in the absence of RDR. AR064579 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 18 of 153 2. THE IMPACT OF RDR ON ADVISOR BUSINESS MODELS 7KHFKDQJHIURPDSUHGRPLQDQWO\FRPPLVVLRQEDVHGWRDIHHEDVHGDGYLVRU\ PRGHOFOHDUO\PHDQVWKDWWKHEXVLQHVVPRGHOVRIPDQ\DGYLVRU\½UPVFRXOG EHTXLWHGLIIHUHQW)RUH[DPSOHZHFDQH[SHFWODUJHFOLHQWVWREHOHVVOLNHO\ WRFURVVVXEVLGLVHDGYLVHUVµVHUYLFHVWRVPDOOHUFOLHQWVLQWKHIXWXUHWKXV WKHUHZLOOEHDJUHDWHUVHJPHQWDWLRQRIFOLHQWV7RVRPHH[WHQWWKHEXVLQHVV PRGHOVZLOOKDYHWRDGDSWWRWKHEHKDYLRXURIFRQVXPHUVRI½QDQFLDODGYLFH 0DQ\PDVVPDUNHWDQGHYHQPDQ\PDVVDI¾XHQWDQGKLJKQHWZRUWK LQGLYLGXDOVPD\EHFRQWHQWWRXWLOLVHQRQDGYLVHGVHOIVHUYLFHSODWIRUPV ZKHUHDVRWKHUVZLOOUHTXLUHWKHVRUWRIDGYLFHW\SLFDOO\SURYLGHGE\D½QDQFLDO DGYLVHU)RUWKRVH½UPVWKDWRSWWRUHPDLQLQGHSHQGHQWLWZLOOEHYLWDOO\ LPSRUWDQWWKDWWKH\KDYHDFOHDUO\VWUXFWXUHGFOLHQWSURSRVLWLRQDQGWKDWWKH\ FDQGHPRQVWUDWHFOHDUO\WKHZD\VLQZKLFKWKH\ZLOODGGYDOXHWRDFOLHQWµV ½QDQFLDOKHDOWKFRPSDUHGZLWKQRQDGYLFHSURYLGHUV,QWKLVVHFWLRQRIWKH SDSHUZHORRNDWWKHOLNHO\FKDQJHVWRDGYLVHUEXVLQHVVPRGHOVDVDUHVXOWRI WKHFKDQJLQJODQGVFDSHEURXJKWDERXWE\WKH5'5 2.1 INDEPENDENT V RESTRICTED $NH\GHFLVLRQIRU½QDQFLDODGYLVHUVLVZKHWKHUWKH\VKRXOGRSHUDWHXQGHU DQLQGHSHQGHQWPRGHORUZKHWKHUWRRIIHUDUHVWULFWHGVHUYLFH,WKDVEHHQ ZLGHO\SUHGLFWHGWKDW5'5ZLOOOHDGWRDQLQFUHDVHLQWKHSURYLVLRQRIUHVWULFWHG ½QDQFLDODGYLFHGXHWRWKHFRQVLGHUDEOHFRPPLWPHQWWKDWZRXOGEHLQYROYHG LQSURYLGLQJWKHDOWHUQDWLYH²ZKROHRIPDUNHW³VHUYLFH'HVSLWHWKLVSRWHQWLDO issue, RIVXUYH\UHVSRQGHQWVVDLGWKDWWKH\ZRXOGSURYLGH¼QDQFLDO advice using an independent business model post-RDR )LJXUH 7KLV UHVXOWLQGLFDWHVWKDWDGYLVHUVFOHDUO\VHHFRQVLGHUDEOHYDOXHLQWKHSURYLVLRQ RILQGHSHQGHQWDGYLFHLQWKHUHWDLOLQYHVWPHQWLQGXVWU\°RUDWOHDVWWKDWWKH\ SHUFHLYHWKDWWKHLUFOLHQWVZLOOYDOXHVXFKDVHUYLFH5HWDLQLQJWKHLQGHSHQGHQW ODEHOZLOOEHDGYDQWDJHRXVEHFDXVHWKHDGYLVHUZLOOEHDEOHWRFDWHUIRUWKH PDMRULW\RIFOLHQWVDQGWKLVPD\HQFRXUDJHUHIHUUDOVWREULQJLQPRUHKLJKQHW ZRUWKLQGLYLGXDOV+RZHYHUWKHVHEHQH½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½QDQFLDODGYLFHPD\ QRWEHDVODUJHDVRULJLQDOO\WKRXJKWEHFDXVHUHVWULFWHGDGYLVHUVZLOODOVRQHHG WRGRFXPHQWZK\DSDUWLFXODUSURGXFWZDVQRWLQFOXGHGLQWKHDQDO\VLVIRUWKH FOLHQW7KLVPHDQVWKDWZKROHRIPDUNHWNQRZOHGJHZLOOEHUHTXLUHGHYHQIRU restricted advisers. AR064580 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 19 of 153 Figure 2.1: What business model will you employ Figure 2.2: Do you think that IFAs will make more in the RDR world? use of a restricted business model in the RDR world? Dual offering (both independent and restricted) 3% Don’t know 2% Restricted 9% Not sure 25% Yes 58% No 15% Independent 88% Figure 2.3: What do you think the main reasons are for using a restricted business model? Reducing the level of professional indemnity (PI) 12% insurance premiums (compared with the...) Enabling efficiency in the advice process 14% Providing better profitability than the independent model 11% Allowing the adviser to provide a more focused 8% service to clients Reducing costs by limiting the products offered 19% (e.g. reduced control and compliance costs) Not having resources to provide unbiased whole of market advice for all products 23% Not having time to provide unbiased whole of market advice for all products 11% 0 5 10 15 20 25 % of respondents AR064581 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 20 of 153 2.2 FEE STRUCTURE QHHGWREHFRQVLGHUHGZLWKWKLVLQPLQG FOLHQW 7KHODUJHVWFKDQJHWREXVLQHVVPRGHOVZLOOEHWKH VHJPHQWDWLRQZLOOLQFUHDVH$OWKRXJKRIRXU SURSDJDWLRQRIDGYLVHUFKDUJLQJDQGWKHHOLPLQDWLRQ UHVSRQGHQWVLQGLFDWHGWKDWWKH\ZLOOEHFKDUJLQJD RIFRPPLVVLRQEDVHGVHOOLQJ,QGHHGWKHODWWHU fee based upon percentage of assets under advice, ZLOOEHEDQQHGFRPSOHWHO\IRUERWKQHZDQGSUH 73% of respondents to our survey stated that 5'5EXVLQHVVIURP WKHVRFDOOHG´VXQVHWµ they would be using a mix of fee types, utilising FODXVH $GYLVHUVZKRKDYHSUHYLRXVO\UHOLHGRQ an annual charge as a percentage of assets, a SURYLGHUFRPPLVVLRQVZLOOQHHGWREHDEOHWRDGMXVW ¼[HGIHHDQGRUDIHHEDVHGXSRQDQKRXUO\UDWH WRWKHFRQFHSWRIUHPXQHUDWLRQYLDWKHFOLHQW )LJXUH 0DQ\DGYLVHUVKDYHEHHQFKDUJLQJIHHV 7KLVZLOOHIIHFWLYHO\HOLPLQDWHWKHRSSRUWXQLW\WR IRUDQXPEHURI\HDUVSULRUWR5'5 KRZHYHU,)$V FURVVVXEVLGLVHIURPELJJHUFOLHQWVWRVXSSRUW ZKRZHUHSUHYLRXVO\FRPPLVVLRQEDVHGZLOOQHHG VPDOOHUFOLHQWVDQGWKHRIIHULQJWRHDFKFOLHQWZLOO WRDGMXVWWRDVHWWLQJZKHUHWKHLUIHHZLOOQRZKDYH WREHDJUHHGZLWKWKHFOLHQWEHIRUHDQ\DGYLFHRU EHIRUHDQ\VDOHFDQWDNHSODFH Figure 2.4: What fee structure will you be using &RVWZLOOEHFRPHDNH\IDFWRULQWKHUHODWLRQVKLS in the RDR world? EHWZHHQWKHDGYLVHUDQGWKHFOLHQW$GYLVHUVLQRXU VDPSOHKDGDEURDGO\SRVLWLYHYLHZUHJDUGLQJWKH None 2% Annual charge as a percentage of FKDQJHWRUHPXQHUDWLRQYLDDQH[SOLFLWIHHRI assets 25% RXUUHVSRQGHQWVWROGXVWKDWRIWKHLUFOLHQWV ZRXOGEHZLOOLQJWRSD\DIHHEDVHGFKDUJHZKLOH DOPRVWKDOIRIWKHUHVSRQGHQWV VXJJHVWHG WKDWDWOHDVW RIFOLHQWVZRXOGEHZLOOLQJ A fixed WRSD\ )LJXUH ,QDGGLWLRQRIDGYLVHUV fee 0% LQRXUVXUYH\UHPDLQFRQ½GHQWWKDWWKHIHHEDVHG A fee FKDUJLQJZLOOEHFRPHPRUHDFFHSWHGE\FOLHQWVRYHU based upon an WLPH )LJXUH :HTXHVWLRQZKHWKHUWKLVUHDOO\LV hourly OLNHO\HVSHFLDOO\JLYHQWKHDGGLWLRQDOWUDQVSDUHQF\ rate 0% issue and perceived increase in the cost of using A mix 73% SODWIRUPVZKLFKZLOOEHVRRQEHLQWURGXFHG Figure 2.5: What proportion of your clients do you Figure 2.6: Do you anticipate greater acceptance think will be willing to pay the fee-based charging by clients of the fee-based remuneration structure required by the RDR? over time? 50 48% Don’t know 2% Not sure 9% 40 No 9% 30 31% 20 16% % of respondents 10 2% 2% 2% 0 Not 24% - 49% - 74% - 99% - 100% sure 0% 25% 50% 75% Yes 80% 20 AR064582 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 21 of 153 2.3 CLIENT SEGMENTATION assets under management or advice. 86% of our 7KHDGYHQWRI5'5ZLOOIXUWKHULQFUHDVHWKHQXPEHU respondents said that they had segmented their RIDGYLVHUVDFWLYHO\VHJPHQWLQJWKHLUFOLHQWEDVHV clients on the basis of assets under management $Q\VHJPHQWDWLRQZLOOFOHDUO\EHGHWHUPLQHGE\ or advice )LJXUH 7KLVLVEHFDXVHWKLVPHWULF WKHOHYHORIVHUYLFHWKDWFOLHQWVZLOOEHRIIHUHG LVIUHTXHQWO\XVHGWRFDOFXODWHWKHUHYHQXHWKDW ZKLFKLQWXUQZLOOEHLQ¾XHQFHGE\WKHSRWHQWLDO FDQEHHDUQHGIURPDFOLHQW+RZHYHUDVLJQL½FDQW SUR½WDELOLW\RIHDFKFOLHQW:HDVNHGDGYLVHUVWR SURSRUWLRQ VDLGWKDWWKH\KDGVHJPHQWHG FRQ½UPKRZWKH\DQDO\VHGWKHLUFOLHQWEDVHDVD WKHLUFOLHQWVEDVHGRQWKHFRPSOH[LW\RIDWKHLU IXQFWLRQRIWKHIROORZLQJDWWULEXWHV WKHFRPSOH[LW\ FOLHQWVµFLUFXPVWDQFHV DOWKRXJKLWPD\EHWKDW RIWKHFOLHQWµVFLUFXPVWDQFHV WKHZLOOLQJQHVVRU ZHDOWKLHUFOLHQWVWHQGWRKDYHPRUHFRPSOH[ DELOLW\WRSD\IHHV WKHFOLHQWµVRZQNQRZOHGJHRU ½QDQFLDOFLUFXPVWDQFHVVRWKDWWKLVWRRFRXOG VRSKLVWLFDWLRQRISURGXFWV DQGWKHTXDQWLW\RI be a proxy for asset under management. Figure 2.7: Have you segmented your clients since the advent of the RDR? No 14% Yes 22% Yes, but before the advent of the RDR 64% Figure 2.8: How have you segmented your clients? Another factor 9% Assets under management or advice 86% The client’s own knowledge or sophistication of the products 7% Complexity of the client’s 33% circumstances Willingness to pay fees 11% 020406080100 % of respondents AR06458321 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 22 of 153 2.4 BUSINESS MODEL READINESS )URPRXUVXUYH\UHVXOWVZHHVWLPDWHWKDWDGYLVHUV 6RKRZSUHSDUHGZHUH½QDQFLDODGYLFHEXVLQHVVHV EHOLHYHWKDWWKHDYHUDJHUHYHQXHWKDWWKH\QHHG IRUWKH5'5UHYROXWLRQ"When we asked when their WRJHQHUDWHSHUFOLHQWWRPDNHWKHLUEXVLQHVVHV business model would be ready for RDR, 86% of our YLDEOHLVDURXQG :H½QGWKDWWKHDYHUDJH survey respondents indicated that it already was DGYLVHUH[SHFWVWRJDUQHUDURXQG IURPHDFK ready )LJXUH VDLGWKDWLWZRXOGEHUHDG\ RIURXJKO\FOLHQWVWRVXVWDLQWKH ZLWKLQPRQWKVZKLOHRQO\VDLGWKDWLWZRXOG SDRIJURVVUHYHQXHWKDWWKH\WHOOXVWKH\UHTXLUH EHUHDG\ZLWKLQPRQWKV7KHIDFWWKDWVXFKD to function as a business. With fees averaging KLJKSURSRUWLRQRIEXVLQHVVHVDUHDOUHDG\SUHSDUHG DSSUR[LPDWHO\RIDVVHWVXQGHUDGYLVRU\WKLV RUDUHQHDUO\UHDG\IRU5'5VKRXOGQRWFRPHDVD PHDQVWKDWWKHDYHUDJH,)$FOLHQWZLOOQHHGWRKDYH great surprise given the gestation period of this set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´PRUHWKDQµFOLHQWV ZKLOHRIUHVSRQGHQWV HDFKWKHQWKLVLPSOLHVFOLHQWVRQDYHUDJHIRUHDFK VXJJHVWHGWKDWWKH\FRXOGSURSHUO\VHUYLFHEHWZHHQ RIWKHUHPDLQLQJ,)$V(LWKHUZD\WKHVH½JXUHV DQGFOLHQWV )LJXUH 2XUVXUYH\UHVXOWV DUHIDUORZHUWKDQWKH´UHTXLUHGµ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igure 2.9: When will your business model be in the Figure 2.10: How many clients do you think an correct state for the RDR world? adviser will be able to service properly in the RDR world? Within 24 months 2% Within 12 40 months 12% 34% 31% 30 20 19% % of respondents 10 9% 3% 3% 0 Already is 86% Not More 101 to 76 to 51 to 26 to sure than 125 125 100 75 50 22 AR064584 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 23 of 153 LQDVVHWVPD\EHVHHQDVDJRRGORQJUXQSRWHQWLDO 2IFRXUVHLIVRPHFOLHQWVDUHFRPPHUFLDOO\YLDEOH FOLHQWDVZHDOWKLVH[SHFWHGWRJURZ%XWWKLV WKRVHZLWKTXLWHVLJQL½FDQWLQYHVWLEOHDVVHWV WKHQ excessive optimism on future revenues suggests WKHUHZLOOEHRWKHUVWKDWZLOOQRWEH:KHQDVNHG WKDWPDQ\PRUHDGYLVHUVZLOOKDYHWROHDYHWKH ZKDWWKH\SURSRVHGWRGRZLWKFOLHQWVWKDWZRXOG industry or accept far reduced incomes. QRWEHFRPPHUFLDOO\YLDEOHLQD5'5HQYLURQPHQW RIDGYLVHUVVXJJHVWHGWKDWWKHVHFOLHQWVZRXOG 7KHVHUHVXOWVLQGLFDWHLQGLUHFWO\WKDWDGYLVHUVZLOO be maintained on the books in order to maintain WDUJHWWKHPDVVDI¾XHQWWRKLJKQHWZRUWKLQGLYLGXDOV WUDLO ZKLFKZHQRZNQRZRIFRXUVHZLOOHQGIURP in order to generate enough revenue to support EXWWKDWWKH\ZRXOGQRWUHFHLYHWKHIXOO DVXVWDLQDEOHEXVLQHVVLQWKH5'5ZRUOGDQGLQ VHUYLFH )LJXUH ,QVWHDGWKHVHFOLHQWVZRXOG DGGLWLRQWKDWWKH\ZLOODGDSWWKHLUFOLHQWSURSRVLWLRQV UHFHLYHFRUUHVSRQGHQFHRUQHZVOHWWHUVHUYLFHYLD to provide a broader and more sophisticated range of HPDLO FOHDUO\WKLVLVDQHJDWLYHRXWFRPHIRUWKH products to support this approach. FOLHQW,QWHUHVWLQJO\RIUHVSRQGHQWVVXJJHVWHG WKDWWKH\ZRXOGRXWVRXUFHWKHVHFOLHQWVWRDQRWKHU DGYLVHU+RZHYHULWLVQRWHQWLUHO\REYLRXVZK\ Figure 2.11: Approximately what average annual DFOLHQWZRXOGEHHFRQRPLFDOO\XQYLDEOHIRURQH revenue do you think you will need to earn from a DGYLVHUEXWYLDEOHIRUDQRWKHU+RZHYHUZLWKWKH client to make your business commercially viable? GHPLVHRIDOOWUDLOFRPPLVVLRQIURPWKHVH FRPPHQWVPD\DOUHDG\EHERWKRYHURSWLPLVWLFDQG 50 out-of-date. 40 41% Overall, our results indicate that one of the 36% unintended consequences of the RDR – perhaps 30 the most important unintended consequence – will EHWKDWWKHPDVVPDUNHWIRU¼QDQFLDODGYLFHLV even less likely to be provided for in a RDR world 20 19% than they were before its implementation. % of respondents 10 3% 2% 0 Less than £501 to £1001 More than Don’t £500 £1000 to £2000 £2000 know Figure 2.12: How will you manage clients that are no longer commercially viable to receive your full service? Prefer not to say 9% Outsource client to 16% another adviser Offer research support and 6% guide clients to a D2C service Retain on books and stay in contact via, say, newsletters, 69% while retaining trail commission as long as appropriate 01020304050607080 % of respondents AR06458523 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 24 of 153 2.5 OUTSOURCING )LQDOO\DQXPEHURILQGXVWU\FRPPHQWDWRUVDQG The DFM services can be divided into either VRPHRIRXULQWHUYLHZHHVKDYHVXJJHVWHGWKDW EHVSRNHPDQDJHGSRUWIROLRVRULQWRXQLWLVHGIXQGV RXWVRXUFLQJDUUDQJHPHQWVZLOOLQFUHDVHLQWKH ZKLFKVHUYLFHLVPRVWVXLWDEOHIRUDFOLHQWLVWKH 5'5ZRUOGDVDGYLVHUVORRNWRUHGXFHWKHFRVWRI UHVSRQVLELOLW\RIWKHDGYLVHUIRUWKHXQLWLVHGIXQGV FRPSOLDQFH'HVSLWHWKLV91% of the respondents DQGLVVKDUHGEHWZHHQWKHDGYLVHUDQG')0IRU to our survey said that they have not increased the former options. DFMs are competing for assets their use of outsourcing arrangements as a result DQGWKHUHIRUHVXEMHFWWRSULFLQJSUHVVXUHUHVXOWLQJ of RDR. +RZHYHUWKHVHDUHVWLOOHDUO\GD\VDQGWKLV LQORZHUFRVWVIRUWKHVHVHUYLFHV7KHUHIRUHZKHQ ½JXUHPD\FKDQJHDVWKHIXOOFRQVHTXHQFHVDQG FRQVLGHULQJRXWVRXUFLQJDGYLVHUVDUHLQFUHDVLQJO\ HIIHFWVRI5'5DUHIHOW)RUWKRVHWKDWGRRXWVRXUFH ORRNLQJWRGHOHJDWHWKHLULQYHVWPHQWPDQDJHPHQW VHUYLFHVGLVFUHWLRQDU\IXQGPDQDJHPHQW ')0 LV process via the use of DFMs. E\IDUWKHPDLQRXWVRXUFHGVHUYLFH )LJXUH Figure 2.13: Which services do you currently outsource? Discretionary fund management 9% 23% Modelling 2% Report writing 2% Training 7% 6% Marketing 3% Paraplanning 2% Management of back 15% office systems Fund search 14% Asset allocation 12% Risk profiling 15% Investment administration 4% Investment advice 3% Product advice 0% 0% 5% 10% 15% 20% 25% % of respondents 24 AR064586 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 25 of 153 2.6 CONCLUSIONS 7KHFKDQJHIURPDSUHGRPLQDQWO\FRPPLVVLRQEDVHGWRD IHHEDVHGDGYLVRU\PRGHOFOHDUO\PHDQVWKDWWKHEXVLQHVV PRGHOVRIPDQ\DGYLVRU\½UPVFRXOGEHTXLWHGLIIHUHQW6R ZKDWZLOODW\SLFDODGYLVRU\EXVLQHVVORRNOLNHLQWKH5'5 ZRUOG"7KHPDMRULW\LQWHQGWRRIIHUDQLQGHSHQGHQWEXVLQHVV PRGHOSRVW5'5ZKHUHIHHVZLOOJHQHUDOO\EHEDVHGXSRQD PL[RIDQDQQXDOFKDUJHDVDSHUFHQWDJHRIDVVHWVSOXVD½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½JXUHVDUHIDU ORZHUWKDQWKH´UHTXLUHGµQXPEHUVLQGLFDWHGLQRXUVXUYH\ZLWK DGYLVHUVWKLQNLQJWKDWWKH\ZLOOQHHGFOLHQWVHDFKZLWK DVVHWVRIDERXW This excessive optimism on future revenues suggests that many more advisers will have to leave the industry or accept far reduced incomes. Taking all this together, including the segmentation of client bases and the revenue targets, our results indicate that one of the unintended consequences of the RDR – perhaps the most important unintended FRQVHTXHQFH¯ZLOOEHWKDWWKHPDVVPDUNHWIRU¼QDQFLDO advice is even less likely to be provided for in a RDR world than they was the case before its implementation. AR06458725 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 26 of 153 3. THE IMPACT OF RDR ON THE VALUE OF ADVISORY BUSINESS 2XULQWHUYLHZHHVDQGRWKHUUHVHDUFKKDVUHYHDOHGWKDWWKHUHLVDVWURQJ EHOLHILQWKHLQGXVWU\WKDWDGYLVRUQXPEHUVZLOOVKULQN7KRVHWKDWIHHOIRU ZKDWHYHUUHDVRQWKDWWKH\GRQRWZLVKWRZRUNDVD½QDQFLDODGYLVHULQ WKH5'5ZRUOGZLOOWKHUHIRUHQDWXUDOO\VHHNWRFDSLWDOLVHWKHYDOXHRIWKHLU EXVLQHVVYLDDQLQGXVWU\VDOHLIWKH\FDQ'XULQJWKHLQWHUYLHZVWKDWZH FRQGXFWHGDQGYLDWKHRQOLQHVXUYH\ ZKLFKERWKSUHGDWHGWKH)&$SDSHUV DQQRXQFLQJWKHFRPSOHWHHQGWRWUDLOFRPPLVVLRQIURPDQGWKHSODWIRUP SROLF\VWDWHPHQW ZHLQYHVWLJDWHGWKHLVVXHVDURXQGWKHYDOXHRIDGYLVRU\ EXVLQHVVHVDQGWKHSRVVLEOHLPSDFWWKDW5'5PLJKWKDYHRQWKHVHYDOXHV $QHFGRWDOHYLGHQFHDQGIHHGEDFNIURPLQWHUYLHZHHVVXJJHVWVWKDWLQWKHUXQ XSWRWKHLPSOHPHQWDWLRQRI5'5there were greater levels of distressed sales of mainly smaller IFA businesses. 7KHVHVPDOOHU½UPVKDYHGHFLGHGWROHDYH the industry. 3.1 FINDING VALUE IN AN ADVISORY BUSINESS 7KHYDOXHRIDQDGYLVRU\EXVLQHVVZLOOGHSHQGRQDQXPEHURILQWHUUHODWHG WDQJLEOHDQGLQWDQJLEOHIDFWRUVZKLFKPDNHWKHFKDOOHQJHRIDUULYLQJDWDQ DSSURSULDWHYDOXHGLI½FXOW)RUH[DPSOHLWPLJKWEHUHDVRQDEOHWRDVVXPH WKDWWKHYDOXHPLJKWEHLQ¾XHQFHGE\WKHOHYHORIUHFXUULQJLQFRPH WKH QXPEHUDQGH[SHULHQFHRIWKHEXVLQHVVµVDGYLVHUV WKHTXDOLW\RIWKHFOLHQW EDQN WKHV\VWHPVDQG,7 DQGEUDQGSUHVHQFHHowever, of all of these factors our interviewees suggested that the quality of the client bank would be the most important consideration when purchasing a business. In addition, they suggested that the IT infrastructure and systems of the business might not be VRLPSRUWDQWDVORQJDVDVVHWVFRXOGEHWUDQVIHUUHGHDVLO\WRWKHSODWIRUPRI the purchaser. )RUUHVHDUFKHUVWU\LQJWRXQGHUVWDQGWKHYDOXHRIDQDGYLVRU\EXVLQHVVWKH LVVXHLVFRPSOLFDWHGE\WKHZLGHUDQJHRIYDOXDWLRQPHWULFVLQXVHDFURVVWKH LQGXVWU\&XUUHQWPHWULFVLQFOXGHYDULDQWVRIPXOWLSOHVRILQFRPHSUR½WDELOLW\ DQGWXUQRYHUDVZHOODVDFRQVLGHUDWLRQRIDVVHWVXQGHUDGYLFHRUPDQDJHPHQW 2XULQWHUYLHZHHVFRQFHGHGWKDWLQUHDOLW\QRRQHPHWULFZRXOGEHOLNHO\WR HQFDSVXODWHWKHFRPSOHWHSLFWXUHRIYDOXHDQGWKHUHIRUHWKDWDFTXLUHUVDQG VHOOHUVZHUHOLNHO\WRQHJRWLDWHDSULFHSRVVLEO\DVDIXQFWLRQRIDFRPELQDWLRQ RIPHDVXUHV7KLVYLHZLVDOVRERUQHRXWE\WKHUHVSRQGHQWVWRRXURQOLQH VXUYH\:HDVNHGUHVSRQGHQWVWRLGHQWLI\IRUXVWKHPDLQYDOXDWLRQPHWULF RIWKHUHVSRQVHVFRQ¼UPHGWKDWWKHPDLQPHWULFVXWLOLVHGDUHEDVHG on multiple of recurring trail income or the multiple of recurring fee income )LJXUH +RZHYHULWVHHPVOLNHO\WRXVWKDWWKHXVHRIWKHIRUPHUPHWULFZLOO GHFOLQHDVWUDLOFRPPLVVLRQJUDGXDOO\FRPHVWRDQHQGDQGLQGHHGZLOOUHGXFH HYHQPRUHTXLFNO\QRZWKDWWKH´VXQVHWµFODXVHKDVEHHQDQQRXQFHG7KHVXUYH\ UHVSRQGHQWVDOVRLQGLFDWHGWKDWWZRRWKHUPHWULFVZHUHFRPPRQ SUR½WDELOLW\ H[SUHVVHGDVDPXOWLSOHRI(%,7'$ DQGEDVHGXSRQDVVHWVH[SUHVVHGDVD percentage of assets under management or advice. 26 AR064588 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 27 of 153 Figure 3.1: From your experience, what is the main valuation metric used in the sale of advisory businesses? Other 3% Price per adviser 0% Discounted cash flow 1% (DCF) forecasting As a percentage of Assets under 15% Multiple of company turnover 3% Multiple of EBIT 0% Multiple of EBITDA 6% Multiple of recurring fee income 34% Multiple of recurring trail income 34% 0% 5% 10% 15% 20% 25% 30% 35% 40% % of respondents 3.2 VALUATION PRIOR TO RDR ,QLQWHUYLHZHHVDQGLQGXVWU\VRXUFHVVXJJHVWHGWKDWYDOXDWLRQVRIDGYLVRU\ EXVLQHVVHVDYHUDJHGEHWZHHQ[WR[UHFXUULQJLQFRPH+LJKHUPXOWLSOHVRI [WR[ZHUHDFKLHYHGIRUVPDOOHU,)$VDOHVGHSHQGLQJRQWKHFRQVWLWXHQWV RIWKHEXVLQHVV2XULQWHUYLHZHHVH[SODLQHGWRXVWKDWWKHPXOWLSOHYDOXDWLRQLV XVXDOO\GULYHQE\SUR½WLQWKHEXVLQHVVDWGHDOFRPSOHWLRQDQGWKHRSSRUWXQLW\ IRULQFUHDVHGSUR½WSRVWGHDOFRPSOHWLRQ:KHQDFTXLUHUVORRNWREX\ EXVLQHVVHVWKH\DUHJHQHUDOO\LQWHUHVWHGLQ½UPVZKHUHWKHUHLVWKHSRWHQWLDOWR LQFUHDVHDGYLVRU\IHHVDQGZKHUHWKHUHLVDSURVSHFWRIUHGXFLQJWKHSD\PHQWV WRDQ\GLVFUHWLRQDU\IXQGPDQDJHURUSODWIRUPWKDWWKH½UPPLJKWXVHVRWKDWWKH WRWDOH[SHQVHUDWLRFDQEHLPSURYHG,IWKHDFTXLUHUDFWLYHO\PDQDJHVIXQGVWKH\ PD\LQFUHDVHFKDUJHVIRUDVVHWDOORFDWLRQDQGXQGHUO\LQJIXQGPDQDJHPHQWLQ DGGLWLRQWRDGYLFHWKHUHE\IXUWKHUHQKDQFLQJWKHSRVWGHDOYDOXH AR064589 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 28 of 153 3.3 VALUATION IN A RDR WORLD RZQHUVRIWKHEXVLQHVV,QWKLV²SDUWQHUVKLSPRGHO³ :HDVNHGDGYLVHUVDERXWWKHOLNHO\WUHQGVLQ DQHZ½UPPD\SURYLGHVHUYLFHVLQH[FKDQJHIRU YDOXDWLRQVWKDWPLJKWDULVHLQD5'5ZRUOG DFTXLVLWLRQRIWKHFOLHQWOLVWRIDQRWKHU½UPEXWWKH $OWKRXJKDQXPEHURILQWHUYLHZHHVVXJJHVWHGWKDW WUDLOZRXOGKDYHUHPDLQHGZLWKWKHRULJLQDO½UP WKHUHZRXOGEHHLWKHUQRFKDQJHRUWKDWLWZDV Thus the maintenance of the trail commissions ´WRRHDUO\WRWHOOµ44% of advisers in our survey would have increased the value of the business suggested that there would be lower valuations with this transaction model quite dramatically, in the next couple of years )LJXUH ,IWKLV compared to one which could cause the trail to YLHZZDVFRPPRQLQLWSHUKDSVH[SODLQVWKH decline sharply after the sale. Of course, this will ZDYHRIVDOHVLQWKDW\HDU7KLVPD\EHEHFDXVH change now with the publication of the ‘sunset WUDQVDFWLRQVLQYROYHODUJHO\EX\LQJWKHFOLHQWEDQN clause’ regarding trail. DQGDFKLHYLQJUHYHQXHYLDWKHUHFXUULQJWUDLO%XW ZHQRZNQRZWKDWWUDLOZLOOQRWFRQWLQXHEH\RQG )LQDOO\UHVSRQGHQWVWRRXURQOLQHVXUYH\DOVR $SULO7KHUHIRUHSHDNWUDLOLVOLNHO\WRKDYH VXJJHVWHGWKDWWKHUHZRXOGEHDwide range of RFFXUUHGRQVW-DQXDU\DQGZLOOGHFOLQHIURP approaches to valuation in the sale of advisory WKLVSRLQW9DOXDWLRQVPXVWQRZGHFOLQH businesses.7KHVHUDQJHVZRXOGLQFOXGHWUDLO LQFRPHPXOWLSOHVUDQJLQJEHWZHHQ[DQG[ 7KHJUDGXDOGLPLQXWLRQRIWUDLOFRPPLVVLRQHYHQXS WRRIDVVHWVXQGHUDGYLFHPDQDJHPHQW WRZLOOPHDQWKDWRWKHUIDFWRUVZLOOHYHQWXDOO\ [WR[UHFXUULQJIHHLQFRPH [WR[RI EHFRPHWKHSULQFLSDOGULYHUVRIYDOXDWLRQ)RU WXUQRYHU DQGFRPELQDWLRQVRIWUDLODQG(%,7'$ H[DPSOHLWLVOLNHO\WKDWWKHOHYHORILQFRPHGHULYHG PXOWLSOHV IURPDIHHEDVHGRQJRLQJVHUYLFHZLOOEHFRPHDQ LPSRUWDQWFRQVWLWXHQWRIYDOXDWLRQ,QDGGLWLRQ 2YHUDOOWKHUHVHHPVWREHJUHDWXQFHUWDLQW\ Ernst & Young have suggested that a track record of DERXWKRZD½QDQFLDODGYLVRU\EXVLQHVVZLOO WUDQVSDUHQWDGYLVHUIHHVEHLQJSDLGE\FOLHQWVZLOO RUVKRXOGEHYDOXHGDQGWKDWWKHYDOXHFRXOG EHFRPHLPSRUWDQWDOWKRXJKWKLVPHWULFZLOORQO\EH FKDQJHGUDPDWLFDOO\GHSHQGLQJXSRQWKH YLVLEOHVRPHPRQWKVDIWHUWKHFRPPHQFHPHQWRI WUDQVDFWLRQPRGHOFurthermore, with the recent WKH5'5UHJXODWLRQV announcement by the FCA of the “sunset” clause which forbids trail income from even pre-RDR sold RIUHVSRQGHQWVVXJJHVWHGWKDWWKHUHZLOO funds from April 6th, 2016, we can expect further EHKLJKHUYDOXDWLRQVLQWKHIXWXUH$QXPEHURI downward pressure on adviser revenues and LQWHUYLHZHHVVXJJHVWHGWKDWWKHUHZRXOGDOVREH business valuations going forward. In addition, it is ORQJHUWDLOVIRUSD\RXWV7KLVYLHZPD\KDYHEHHQ also possible that acquirers of advisory businesses GULYHQE\DQDOWHUQDWLYHDSSURDFKWRWUDQVDFWLRQV prior to this announcement may have overpaid for ZKHUHWKHWUDLOZDVPDLQWDLQHGZLWKWKHRULJLQDO these businesses. Figure 3.2: What is your view of trends in valuations of advisory businesses in the next 1-2 years? 50 44% 40 30 20 17% 19% % of respondents 11% 9% 10 9% 0 There will be There will be There will be no Not Don’t know higher valuations lower valuations change in valuations sure AR064590 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 29 of 153 3.4 THE ROLE OF CONSOLIDATORS 3.5 NETWORKS ,QWHUYLHZHHVKDGPL[HGYLHZVDERXWWKHUROHRI 7UDQVDFWLRQDFWLYLW\LQYROYLQJQHWZRUNVKDVEHHQ FRQVROLGDWRUVLQWKHPDUNHWSODFH6RPHVDLG KLVWRULFDOO\ORZEHFDXVHRIWKHLVVXHVUHODWHGWR WKDWFRQVROLGDWRUVZRXOGEHVLPSO\²PRSSLQJXS WKH½QDQFLDOSHUIRUPDQFHRIWKHLUORZPDUJLQ $X0³DQG²¾LSSLQJWKHPVHOYHVLQWRDGYLVHUV³DQG RSHUDWLQJPRGHOV2XULQWHUYLHZHHVJHQHUDOO\IHOW ZHUHWKHUHIRUHOLNHO\WRSURYLGHDSRRUVHUYLFHWR WKDWWKHVHSUREOHPVFRXOGEHH[DFHUEDWHGE\WKH FOLHQWV+RZHYHURWKHUVVXJJHVWHGWKDWWKHODWWHU DUULYDORI5'57KLVLVEHFDXVHQHWZRUNVFRXOG W\SHVRI½UPVZRXOGQRWVXUYLYHLQWKHORQJHUWHUP VWUXJJOHWRDWWUDFWDQGUHWDLQPHPEHUVUHVXOWLQJ DQGWKDWWKHEHWWHUFRQVROLGDWRUVZHUHSURYLGLQJD LQIXUWKHUSUHVVXUHRQLQFRPHZLWKORZHUOHYHOVRI XVHIXOVHUYLFHWRWKHLQGXVWU\SOD\LQJDNH\UROHLQ SUR½WDELOLW\,WVHHPVOLNHO\WRXVWKDW5'5FRXOG VXSSRUWLQJWKHPLJUDWLRQRIFOLHQWVWRQHZVHUYLFHV EHDQDGGLWLRQDOFDWDO\VWRIGLVWUHVVHGQHWZRUN $VZDVVXJJHVWHGLQHDUOLHUUHVHDUFKWKH,)$ VDOHVZKLFKZRXOGEHDFRQWLQXDWLRQRIDUHFHQW EUDQGPD\EHFKDQJLQJEXWDVZHOODVDFKDQJHLQ WUHQGLQVXFKDFWLYLW\DVUHFHQWO\KLJKOLJKWHGE\WKH WKHUROHRIWKHDGYLVHUWKH5'5ZRUOGPD\EHWWHU DFTXLVLWLRQRI7KH:KLWHFKXUFK1HWZRUNE\WKH2Q VXSSRUWVWUXFWXUHGODUJHU,)$EXVLQHVVHVRIIHULQJ OLQH3DUWQHUVKLS*URXSLQ restricted advice, such as those that are set up as FRQVROLGDWRUV 3.6 CONCLUSIONS 7KHLQFUHDVHLQFRQVROLGDWRUDFWLYLW\LQWKHUXQ 2XUUHVHDUFKVXJJHVWVWKDW5'5LVOLNHO\WRKDYH XSWRWKHLPSOHPHQWDWLRQRIWKH5'5KDVEHHQ KDGWKHJUHDWHVWLPSDFWRQVPDOOHU,)$VZKR ZHOOSXEOLFLVHG&RQVROLGDWRUVVRPHRIZKRP ZRXOGQRWKDYHKDGWKHQHFHVVDU\LQIUDVWUXFWXUH DUHEDFNHGE\SULYDWHHTXLW\½UPVVWDWHWKDWWKH\ to support RDR requirements, and may be more IUHTXHQWO\SD\FDVKXSIURQWZKHQDFTXLULQJDQ DIIHFWHGE\WKHFDVK¾RZOLPLWLQJFRQVHTXHQFHVRI DGYLVRU\EXVLQHVVDQGWKDWWKH\DUHORRNLQJIRU WKHHOLPLQDWLRQRIWUDLOLQFRPH7KHLQLWLDOLPSDFWRI TXDOLW\LQWKHWDUJHW½UPµVFOLHQWEDQNDQGLQLWV WKHFKDQJHLVOLNHO\WREHWKHFUHDWLRQRIDJUHDWHU DGYLVHUV°WKRXJKRIFRXUVHWKH\ZRXOGVD\WKDW QXPEHURIDGYLVRU\EXVLQHVVHVUHDG\WRVHOODW ZRXOGQµWWKH\" GLVFRXQWHGUDWHVLQGLVWUHVVHGVDOHV7KHYDOXHRID ERRNRIEXVLQHVVZLOOEHSRWHQWLDOO\PXFKUHGXFHG 2XUGLVFXVVLRQVZLWKFRQVROLGDWRUVKDYHOHGXV ZLWKWKHDEDQGRQPHQWRIDOOWUDLOLQFRPHIURP WRWKHFRQFOXVLRQWKDWWUDQVDFWLRQDODFWLYLW\ZLOO +RZHYHUEHFDXVHWKHVHVDOHVDUHODUJHO\SULYDWH FRQWLQXHDVDGYLVRU\½UPVFRQWLQXHWRGHFLGH LWLVGLI½FXOWWRDVVHVVWKHLULPSDFWDWWKHORZHU ZKHWKHUWKH\ZLVKWRUHPDLQLQWKHLQGXVWU\RU HQGRIWKHPDUNHW,QUHODWLRQWRQRQGLVWUHVVHG QRW5HFHQWKHDGOLQHVIRUH[DPSOHWKDW7RZU\ VDOHVLWLVOLNHO\WKDWLWZLOOWDNHWLPHIRUDGYLVRU\ DUHLQGLVFXVVLRQZLWK½UPVFRQ½UPVWKLV EXVLQHVVHVWREXLOGXSDWUDFNUHFRUGRIWUDQVSDUHQW RQJRLQJDFWLYLW\$VZLWKSURFHVVIRFXVHGDGYLVRU\ FKDUJLQJ,QDGGLWLRQWKHODFNRIDFOHDUDQG EXVLQHVVHVFRQVROLGDWRU½UPVKDYHSUHSDUHGLQ ZLGHO\DJUHHGXSRQYDOXDWLRQPHWULFLQWKLVLQLWLDO advance for RDR and can therefore focus on their SHULRGPD\KDYHDQLPSDFWRQVDOHV,QWHUYLHZHHV DFTXLVLWLYHDFWLYLW\VXEMHFWWRWKHLUDELOLW\WRDFFHVV suggested that mergers and acquisitions activity IXUWKHUFDSLWDO PD\EHFRPHVXEGXHGDIWHUDQLQLWLDOZDYHRI GLVWUHVVHGVDOHVEXWZLOOFRPHWROLIHLQODWH RQFHWKHQHZUHJXODWLRQVDUHHPEHGGHGDQGZKHQ DGYLVHUVKDYHDEHWWHUXQGHUVWDQGLQJRIZKDWLWZLOO WDNHWRUXQDVXFFHVVIXODGYLVRU\EXVLQHVVLQWKLV QHZUHJXODWRU\HQYLURQPHQWHowever, the recent announcement by the FCA of the trail “sunset” clause will no doubt have an impact on this activity in coming months. AR064591 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 30 of 153 APPENDIX: THE ON-LINE SURVEY ,QRUGHUWRUHYLHZWKH5'5UHODWHG issues and concerns raised by our LQWHUYLHZVZLWKVHQLRULQGXVWU\½JXUHV ZHGHVLJQHGDQRQOLQHVXUYH\7KH VXUYH\FRYHUHGTXHVWLRQVUHODWLQJWR the impact of the RDR on the adviser PDUNHWDGYLVHUEXVLQHVVPRGHOVDQG WKHYDOXDWLRQRIDGYLVRU\½UPV,WZDV VHQWWRRYHU8.EDVHG½QDQFLDO DGYLVHUV WKHUHVXOWVSUHVHQWHGLQWKLV report are based on 64 responses received in March 2013. 30 AR064592 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 31 of 153 )LJXUH$VKRZVWKDW RIUHVSRQGHQWVUHSUHVHQWHG½UPVFRPSULVLQJWR DGYLVHUV RIUHVSRQGHQWVZHUH²VROHWUDGHUV³ KDGWRDGYLVHUV RIWKHUHVSRQGHQWV UHSUHVHQWHG½UPVZLWKRYHUDGYLVHUV:HHVWLPDWHWKHDYHUDJHQXPEHURIDGYLVHUV LQRXUVXUYH\HG½UPVWREHDGYLVHUVDQGWKHUHIRUHWKHPDMRULW\RIUHVSRQGHQWVFDQEH FRQVLGHUHGWRUHSUHVHQWWKHVPDOOHU½UP½QDQFLDODGYLVHUFRPPXQLW\ )LJXUH$ 6L]HRI¼UPVUHSUHVHQWHGLQVXUYH\ 70 60 59% 50 40 30 20 20% % of respondents 17% 10 0%3% 0% 0 Not sureMore 26 to 50 10 to 25 2 to 9 1 than 50 7KHQXPEHUVRIFOLHQWVUHSUHVHQWHGE\WKHVXUYH\UHVSRQGHQWVLVVKRZQLQ)LJXUH$ RIUHVSRQGHQWVKDGPRUHWKDQFOLHQWV RIUHVSRQGHQWVVHUYLFHGWR DGYLVHUV ZKLOHWKHSURSRUWLRQRIDGYLVHUVWKDWKDGWRDQGWRFOLHQWVZDV LQERWKFDVHV:HHVWLPDWHWKDWRQDYHUDJHWKHUHDUH FOLHQWVSHUUHVSRQGHQW½UP Figure A2: Number of clients 40 36% 30 27% 20 17% 17% 10 % of respondents 2% 2% 0 Not sureMore 501 to 201 to 51 to Less than 1000 1000 500 200 than 50 AR06459331 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 32 of 153 FOR MORE INFORMATION PLEASE CONTACT XXXXXXX XXXX ON 020 7163 3951 www.bnymellonam.com 21686 06/13 AR064594 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 33 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Part 1 ______ Indexed Annuities Indexed Life 2 Introduction 2 3 Survey Participants 5 7 4th Quarter Sales 17 8 Year-to-Date Sales 18 9 Top Ten Products 19 9 Changes 19 Sales Breakdown 10 By Crediting Method 20 11 By Index 21 12 By Distribution Channel 22 13 By Surrender Period 23 14 By Commission N/A 15 By Other Demographics 24 16 By Bonus N/A 25 Comments 25 26 Sales Trends 28 1 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066930 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 34 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Introduction This survey was conducted in January and February of 2015, in order to determine indexed product sales for the fourth calendar quarter (10/01/14 – 12/31/14) of 2014. Wink’s Sales & Market Report is in its second decade with this, the 70th edition of the report. Fifty-two indexed annuity providers and 50 indexed life insurance companies were contacted and asked to complete a survey requesting data on total indexed sales for the fourth quarter of 2014. Within the survey, participants also provided a breakdown of sales by product, surrender period, distribution channel, as well as other various criteria. Of these 70 indexed life and indexed annuity providers, Stonebridge Life, Transamerica Financial Life, Transamerica Life, Transamerica Premier Life, and Western Reserve Life sales are combined under ‘Aegon.’ American Equity Investment Life and Eagle Life Insurance Company are combined under ‘American Equity Companies.’ American General, American General Life & Accident, and The United States Life Insurance Company in the City of New York are aggregated under ‘American General Life Companies.’ American United Life sales are reported under ‘OneAmerica.’ Ameritas Life and Ameritas Life of New York are combined under ‘Ameritas.’ Athene Annuity & Life Assurance Company and Athene Annuity and Life Company are combined under ‘Athene USA.’ Bankers Life & Casualty sales are combined with Washington National under ‘CNO Companies.’ Farm Bureau Life and Greenfields Life are combined under the name ‘Farm Bureau Life.’ Annuity Investors Life and Great American Life are combined under ‘Great American Insurance Group.’ Fidelity & Guaranty Life and Fidelity & Guaranty Life of New York are listed under ‘Fidelity & Guaranty Life.’ Lincoln Life & Annuity Company of New York and Lincoln National Life Insurance Company are combined under the name ‘Lincoln National Life.’ Nationwide Life Insurance Company and Nationwide Life & Annuity Insurance Company are combined under ‘Nationwide.’ Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey’s sales are reported under ‘Prudential Companies.’ Sales through John Hancock Life and John Hancock Life of New York are reported under ‘John Hancock.’ Life Insurance Company of the Southwest is combined with National Life under ‘National Life Group.’ Minnesota Life and Securian Life are combined under ‘Minnesota Life.’ Phoenix Life Insurance Company and PHL Variable Insurance Company combine their sales under ‘Phoenix Companies.’ Voya Insurance and Annuity Company, ReliaStar Life Insurance Company of New York, and Security Life of Denver’s sales are reported under ‘Voya Financial.’ We were unable to obtain indexed annuity sales data from Guggenheim Life & Annuity, Physicians Life and Principal Life; their sales have been estimated. Symetra’s sales were extracted from public documentation on their quarterly earnings. In all, 94.2% of the active indexed annuity companies are represented, totaling 99.8% of production. On the indexed life side, we were unable to obtain sales data from Principal Life, Zurich American Life Insurance Company and their New York sister company, Zurich American Life Insurance Company of New York; their sales have all been estimated. In all, 94.0% of the active indexed life companies are represented, totaling 95.2% of production. The survey identifies sales by company. Some companies asked that their sales information be kept confidential; these companies are identified by a letter. This report also identifies the participants in the report, their sales and market share, as well as sales by crediting methodology, index, surrender period, distribution channel, and other demographic data. The information obtained is believed accurate but is not warranted. The market research firms of Wink, Inc. and Moore Market Intelligence provide research and consulting services to select insurance companies, financial institutions, and other financial service providers. Neither Wink, Inc. nor Moore Market Intelligence sells or endorses any insurance product. 2 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066931 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 35 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Survey Participants: Indexed Annuity Allianz Life of North America American Equity Investment Life American General Life Insurance Company American National Insurance Company American United Life Insurance Co. (OneAmerica) Americo Financial Life & Annuity Insurance Co. Ameritas Life Insurance Corporation Ameritas Life Insurance Corporation of New York Annuity Investors Life Insurance Company Athene Annuity & Life Assurance Company Athene Annuity and Life Company Bankers Life & Casualty Company (CNO) CUNA Mutual Life Eagle Life Insurance Company EquiTrust Life Insurance Company Farm Bureau Life Insurance Company Fidelity & Guaranty Life Insurance Company Fidelity & Guaranty Life Ins. Company of NY Forethought Life Insurance Company Genworth Life & Annuity Insurance Company Great American Life Insurance Company Greenfields Life Insurance Company Horace Mann Life Insurance Company Integrity Life Insurance Company Jackson National Life Insurance Company The Lafayette Life Insurance Company Lincoln Life & Annuity Company of New York Lincoln National Life Insurance Company Midland National Life Insurance Company National Life Group (NL/LSW) National Western Life Insurance Company Nationwide Life & Annuity Insurance Company Nationwide Life Insurance Company North American Company for Life & Health Oxford Life Insurance Company Pacific Life Insurance Company PHL Variable Insurance Company (Phoenix) Protective Life Insurance Company Reliance Standard Life Insurance Company Sagicor Life Insurance Company Security Benefit Life Insurance Company Sentinel Security Life Insurance Company The Standard Thrivent Financial 3 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066932 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 36 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Survey Participants: Indexed Annuity The United States Life Ins. Co. in the City of NY Voya Insurance and Annuity Company Washington National Insurance Co. (CNO) 4 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066933 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 37 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Survey Participants: Indexed Life Accordia Life Allianz Life of North America American General Life and Accident Ins. Co. American General Life Insurance Company American National Insurance Company Americo Financial Life & Annuity Insurance Co. Ameritas Life Insurance Corporation Ameritas Life Insurance Corporation of New York AXA US Bankers Life & Casualty Company (CNO) Columbus Life Insurance Company EquiTrust Life Insurance Company Fidelity & Guaranty Life Insurance Company Genworth Life & Annuity Insurance Company John Hancock Life Insurance Company John Hancock Life Insurance Company of NY Kansas City Life Insurance Company The Lafayette Life Insurance Company Life Insurance Co. of the Southwest (NL/LSW) Lincoln Life & Annuity Company of New York Lincoln National Life Insurance Company Midland National Life Insurance Company Minnesota Life Insurance Company Monumental Life Insurance Co. (Aegon) National Life (NL/LSW) National Western Life Insurance Company Nationwide Life & Annuity Insurance Company North American Company for Life & Health Pacific Life & Annuity Company Pacific Life Insurance Company Penn Mutual Life Insurance Company PHL Variable Insurance Company (Phoenix) Phoenix Life Insurance Company Protective Life Insurance Company Pruco Life Insurance Company Pruco Life Insurance Company of New Jersey ReliaStar Life Insurance Company of New York RiverSource Life Insurance Company Sagicor Life Insurance Company Securian Life Insurance Co. (Minnesota Life) Security Life of Denver Insurance Company (ING) Stonebridge Life Insurance Company (Aegon) Transamerica Financial Life Ins. Co. (Aegon) Transamerica Life Insurance Co. (Aegon) 5 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066934 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 38 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Survey Participants: Indexed Life The United States Life Ins. Co. in the City of NY Washington National Insurance Co. (CNO) Western Reserve Life Insurance Co. (Aegon) 6 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066935 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 39 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Indexed Annuity Sales 10/01/14 – 12/31/14 Change From Market Previous 4th Qtr Total Sales Rank Company Share Quarter 2013 1 Allianz Life $3,050,690,320 25.52% -0.92% 32.06% 2 American Equity Companies 1,159,989,775 9.70% 7.59% 11.63% 3 Security Benefit Life 889,420,587 7.44% -5.75% -26.30% 4 Great American Insurance Group 853,025,065 7.14% 24.02% -21.28% 5 Athene USA 669,943,694 5.60% 4.09% -0.55% 6 Fidelity & Guaranty Life 647,498,589 5.42% 42.42% 105.30% 7 Midland National Life 466,269,211 3.90% 7.45% -8.40% 8 American General Life Companies 437,589,646 3.66% 27.07% 105.02% 9 EquiTrust 416,147,729 3.48% 3.15% -9.64% 10 Symetra Financial 395,700,000 3.31% -12.53% 1.12% 11 Voya Financial 353,145,313 2.95% 6.59% -5.39% 12 National Life Group (LSW) 242,385,726 2.03% 2.96% 6.80% 13 North American Company 226,796,814 1.90% 8.37% -11.34% 14 Pacific Life Companies 211,217,592 1.77% 48.30% -55.57% 15 Genworth 193,441,183 1.62% 5.91% -43.26% 16 National Western 186,463,182 1.56% -0.25% 11.89% 17 CNO Companies 180,190,945 1.51% 18.51% 17.13% 18 Nationwide 167,100,000 1.40% 20.74% 431.02% 19 Phoenix Companies 163,900,000 1.37% -21.32% 8.29% 20 Jackson National Life 141,925,396 1.19% -13.13% 11.49% 21 Forethought Life 141,884,887 1.19% 13.69% 39.58% 22 Lincoln National Life 132,499,728 1.11% -20.37% -36.23% 23 Americo 82,406,953 0.69% -0.75% 978.90% 24 Protective Life Insurance Company 76,327,405 0.64% -65.02% -62.94% 25 The Standard 56,364,356 0.47% 62.38% 308.75% 26 Integrity Life Insurance Company 51,634,312 0.43% N/A N/A 27 Sagicor Life 50,150,610 0.42% -7.67% 18.39% 28 American National 43,850,974 0.37% -34.90% 2.58% 29 Reliance Standard 43,364,425 0.36% 40.98% 15.39% 30 Ameritas 37,392,100 0.31% -12.38% 33.81% 31 Lafayette Life 35,582,144 0.30% -19.51% -5.11% 32 Horace Mann Life Insurance Company 29,094,339 0.24% -32.32% N/A 33 Thrivent Financial 28,466,849 0.24% 50.04% N/A 34 Farm Bureau Life 24,210,055 0.20% 8.53% 23.81% 35 OneAmerica 22,469,984 0.19% 8.49% -10.48% 36 Principal Life (est) 15,202,972 0.13% 4.10% -6.52% 37 Oxford Life 12,886,735 0.11% -0.43% -43.98% 38 Sentinel Security Life 9,208,791 0.08% -18.53% -42.76% 39 Physicians (est) 4,410,094 0.04% 4.10% 3.43% 40 CUNA Mutual Life 2,061,281 0.02% 69.08% -71.61% 41 Guggenheim Life & Annuity (est) 1,858,353 0.02% 4.10% N/A Total $11,954,168,116 4.05% 3.55% Sales net of 1035’s and rollovers have been made available to participating carriers. 7 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066936 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 40 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Indexed Annuity Sales 01/01/14 – 12/31/14 Change From Total Sales Market Previous Rank Company 2014 Share Period 1 Allianz Life $12,734,741,820 27.16% 111.81% 2 Security Benefit Life 4,185,055,545 8.92% -7.87% 3 American Equity Companies 4,150,838,252 8.85% 3.30% 4 Great American Insurance Group 3,100,727,116 6.61% 1.41% 5 Athene USA 2,498,868,088 5.33% -8.94% 6 Midland National Life 1,799,490,843 3.84% 0.93% 7 Fidelity & Guaranty Life 1,798,540,900 3.84% 70.07% 8 EquiTrust 1,635,268,590 3.49% -16.47% 9 Symetra Financial 1,583,400,000 3.38% 24.00% 10 Voya Financial 1,538,271,096 3.28% 25.95% 11 American General Life Companies 1,257,722,089 2.68% 207.55% 12 National Life Group (LSW) 974,140,061 2.08% 15.65% 13 Lincoln National Life 970,200,433 2.07% 18.52% 14 North American Company 953,023,761 2.03% -0.92% 15 Genworth 872,799,474 1.86% 22.21% 16 Pacific Life Companies 826,728,840 1.76% -27.37% 17 Phoenix Companies 713,697,000 1.52% 17.28% 18 National Western 704,095,765 1.50% 6.47% 19 Protective Life Insurance Company 665,436,713 1.42% 94.58% 20 CNO Companies 646,540,200 1.38% 13.61% 21 Jackson National Life 608,411,187 1.30% -57.12% 22 Forethought Life 470,544,505 1.00% 14.41% 23 Nationwide 443,917,367 0.95% 456.72% 24 American National 213,349,520 0.45% 26.52% 25 Americo 208,840,430 0.45% 579.09% 26 Sagicor Life 204,728,176 0.44% -33.34% 27 Ameritas 157,289,803 0.34% 43.91% 28 Lafayette Life 149,351,959 0.32% -19.24% 29 Reliance Standard 136,423,951 0.29% -7.13% 30 Horace Mann Life Insurance Company 121,277,416 0.26% N/A 31 The Standard 107,465,189 0.23% 86.98% 32 Farm Bureau Life 87,735,802 0.19% 164.10% 33 OneAmerica 83,819,723 0.18% 21.84% 34 Principal Life (est) 59,631,555 0.13% 9.50% 35 Oxford Life 53,887,110 0.11% -51.07% 36 Integrity Life Insurance Company 51,634,312 0.11% N/A 37 Sentinel Security Life 48,227,592 0.10% -40.46% 38 Thrivent Financial 47,439,519 0.10% N/A 39 Physicians (est) 17,297,983 0.04% 21.16% 40 CUNA Mutual Life 9,893,867 0.02% -73.67% 41 Guggenheim Life & Annuity (est) 5,596,646 0.01% N/A Total $46,896,350,200 21.36% 8 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066937 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 41 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Combined Market Share 4th Quarter Market Share Top 3 Companies 42.66% Top 5 Companies 55.40% Top 10 Companies 74.17% Top 10 Products 1. Allianz Life Allianz 222 Annuity 6. Athene Annuity and Life BalancedChoice Annuity 12 2. Security Benefit Life Secure Income Annuity 7. Great American Assurance Select 7 3. Allianz Life Allianz 360 Annuity 8. Security Benefit Life Total Value Annuity 4. American Equity Bonus Gold 9. American Equity Retirement Gold 5. Allianz Life Allianz Core Income 7 Annuity 10. Allianz Life Allianz 365i Annuity Change From Previous Quarter Sales for the fourth quarter of 2014 were $11,945 million, compared with sales of $11,544 million for the fourth quarter of 2013. Fourth quarter indexed annuity sales were up over 4.00% when compared to the previous quarter, and up nearly 4.00% when compared with the same period last year. This was the sixth consecutive record-setting year for indexed annuity sales, topping last year’s record by 21.36%. Indexed Annuity Sales By Quarter $12,750 $12,000 $11,250 $10,500 $9,750 $9,000 $8,250 $7,500 $6,750 $6,000 $5,250 $4,500 $3,750 $3,000 3Q02 3Q03 3Q04 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 In Millions 9 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066938 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 42 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Indexed Annuity Sales Breakdown Sales by Crediting Method We asked companies to list their indexed annuity sales by crediting method; 83% of those surveyed responded, representing 90% of premium. We have attempted to segment sales by creating four broad subjective categories: Term End Point (TEP), Annual Point-to-Point (A-PTP), Daily/Monthly Averaging (AVG), Monthly Point-to-Point (M-PTP). The Term End Point category includes structures that base crediting on an initial and end point longer than one year. Sales by Crediting Method 45.2% 18.2% 16.0% 9.7% 9.9% 1.0% TEP A-PTP AVG M-PTP Fixed Other 4Q13 Sales by Crediting Method 47.2% 19.9% 10.8% 11.1% 6.3% 4.7% TEP A-PTP AVG M-PTP Fixed Other 4Q14 10 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066939 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 43 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Index Today, 23 indexed annuity carriers offer bond or equity indices beyond the S&P 500. We asked companies to list their sales by index; 83% of those surveyed responded, representing 89% of premium. For those companies offering multiple indices, non-S&P 500 index sales ranged from 1% to 5% of their total sales, with 17 exceptions. In the second quarter, we created a new category for “hybrid” index allocations, which are indices that are derived from one or more other indexes. The S&P 500 index currently represents approximately 55% of indexed annuity sales. Sales by Index 61.8% 14.2% 11.2% 6.5% 1.2% 0.4% 0.1% 0.1% 0.1% 1.8% 0.0% 0.6% 0.3% 1.7% 4Q13 Sales by Index 55.3% 27.8% 10.9% 0.2% 0.8% 0.2% 0.1% 0.1% 0.0% 1.8% 0.0% 0.8% 0.2% 1.1% 0.7% 4Q14 11 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066940 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 44 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Distribution Channel We asked indexed annuity companies to provide sales by distribution channel and 88% of those surveyed responded, representing 95% of sales. Independent insurance agents (Agency) represent 8 out of every 10 indexed annuities sold. Agency and B/D channels increased their market share this quarter at the expense of both Bank and Career channels. Note that Broker Dealer distribution reflects sales through wirehouses only. 4th Quarter - 2013 Agency Bank B/D Career 80.9% 11.5% 2.6% 5.0% 4th Quarter - 2014 Agency Bank B/D Career 81.1% 10.2% 5.3% 3.4% Leaders by Channel Agency Bank Wirehouse Career 1. Allianz Life 1. Great American 1. Voya Financial 1. American General Life Cos. 2. American Equity 2. Allianz Life 2. Allianz Life 2. Nationwide 3. Security Benefit Life 3. Pacific Life Cos. 3. American Equity 3. Thrivent Financial 4. Athene USA 4. American General Life 4. Nationwide 4. Horace Mann Life Insurance Co. 5. Fidelity & Guaranty 5. Protective Life 5. American General Life 5. Farm Bureau Life Index Annuity Sales By Surrender Period 3Q04 3Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 6yr or < 7yr 8-9yr 10yr 11yr+ 12 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066941 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 45 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Surrender Period The indexed annuity product mix continues to be predominately ten-year surrender charges. Today, nearly 60% of all indexed annuity sales are products with a ten-year surrender charge. This quarter, we saw an increase in the share of products with surrender charges of seven to nine years, while all other chassis’ sales declined when compared to last quarter. Sales by Surrender Period 57.3% 12.3% 6.4% 6.7% 8.3% 3.4% 5.3% 0.3% 6 Yr and Less 7 Yr 8-9 Yr 10 Yr 11-13 Yr 14 Yr 15-16 Yr Two-Tier 4Q13 Sales by Surrender Period 58.1% 15.9% 7.5% 3.3% 5.5% 4.5% 5.2% 0.0% 6 Yr and Less 7 Yr 8-9 Yr 10 Yr 11-13 Yr 14 Yr 15-16 Yr Two-Tier 4Q14 13 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066942 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 46 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Commission The indexed annuity commission received by the agent averaged 6.10% of premium for the fourth quarter of 2014; up slightly from last quarter’s average. This is the fourth consecutive increase in the average commission paid to the sales agent, after two years of declines. Average weighted commission paid to the agent ranged from 2.37% to 8.47% of premium. Average Agent Commission 8.3% 8.4% 8.3% 8.2% 8.0% 8.1% 8.1% 8.1% 8.1% 8.0% 8.1% 8.1% 7.9% 7.6% 7.8% 7.7% 7.6% 7.6% 6.8% 6.7% 6.7% 6.8% 6.8% 6.5% 6.7% 6.5% 6.8% 6.6% 6.7% 6.3% 6.3% 5.9% 6.1% 6.1% 6.1% 6.1% 6.0% 6.0% 6.0% 5.7% 5.6% 4Q04 2Q05 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 Indexed Annuity Market Share by Agent Commission Paid 4Q04 3Q06 2Q07 4Q07 2Q08 4Q08 2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14 4Q14 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 6.99% or < 7%-8.99% 9%-10.99% 11%+ 14 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066943 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 47 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales - Qualified versus Non-Qualified We asked indexed annuity companies to provide a breakdown of qualified and non-qualified premium sales; 85% of those surveyed responded, representing 86% of sales. Qualified sales represent 57% of total fourth quarter indexed annuity sales, with individual carrier qualified share ranging from 23% to 83%. Sales - Average Issue Age We asked indexed annuity companies to supply their average issue age for indexed annuities; 77% of those surveyed responded, representing 84% of sales. The average indexed annuity issue age reported was 64 years old; average issue age ranged from 47 to 70 years old. Sales - Average Fixed Premium versus Average Indexed Premium and Policy Count We asked indexed annuity companies to provide their average indexed annuity premium and average traditional fixed annuity premium; 79% of those surveyed responded, representing 84% of sales. The average indexed annuity sales premium reported was $84,812; a trend that was level as compared to the previous quarter. The average indexed annuity premium ranged from $13,432 to $130,172. The average fixed annuity premium was $61,084; a decline of over 10% as compared to the previous quarter. The average fixed annuity premium ranged from $7,380 to $110,783. We also asked if companies would supply their policy count for indexed annuity products sold during the fourth quarter and 85% of those surveyed responded, representing 87% of sales. The policy count overall was 114,998 policies for the quarter, an increase of more than 22% as compared to the previous quarter. The average policy count was 3,382; individual results ranged from 23 to 23,863 policies during the quarter. Average Indexed Annuity Sale Premium $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 4Q04 4Q05 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 15 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066944 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 48 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Bonus Sales of bonus indexed annuities increased more than 1% this quarter, as compared to last quarter. In the fourth quarter, more than 71% of all indexed annuity sales offered a premium bonus. Premium bonuses on the account value of the contract ranged from 0.50% to 12.00% this quarter. Market Share of Bonus Annuities 78.2% 84.3% 75.7% 78.1% 80.9% 77.3% 75.1% 77.4% 77.2% 76.5% 71.2% 74.2% 77.2% 72.2% 76.4% 75.1% 74.5% 69.7% 73.0% 74.5% 70.9% 72.9% 67.4% 71.1% 66.4% 69.7% 70.9% 68.0% 69.5% 66.5% 70.3% 69.1% 66.1% 66.4% 67.3% 64.4% 64.3% 62.0% 61.9% 60.7% 52.8% 4Q04 4Q05 4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 Annual Indexed Annuity Premium (in millions) $46,896 $38,660 $34,119 $32,387 $32,345 $30,114 $26,488 $26,752 $25,301 $25,192 $22,356 $12,701 $11,666 $6,470 $5,367 $5,104 $4,299 $2,797 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 16 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066945 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 49 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Indexed Life Sales 10/01/14 – 12/31/14 Change From Previous Rank Company Total Sales Market Share Quarter 4th Qtr 2013 1 Pacific Life Companies $72,891,062 14.63% 68.34% 30.90% 2 Aegon 63,342,728 12.71% 50.22% 111.65% 3 National Life Group (NL/LSW) 43,297,191 8.69% 42.20% 18.66% 4 Minnesota Life 36,926,000 7.41% 34.67% 34.11% 5 Accordia1 25,605,194 5.14% 201.64% 129.81% 6 Zurich American Life (est) 23,350,699 4.69% 30.80% 17.08% 7 Lincoln National Life 22,753,620 4.57% 34.16% 29.98% 8 AXA US 19,845,222 3.98% 23.64% 36.17% 9 Allianz Life 18,635,431 3.74% 5.06% 0.60% 10 Penn Mutual 17,300,712 3.47% 68.35% 68.00% 11 Nationwide 16,420,580 3.30% 7.07% 22.96% 12 American General Life Companies 14,348,546 2.88% 28.20% -16.00% 13 John Hancock 13,652,818 2.74% 1.53% -2.06% 14 Midland National Life 12,782,300 2.57% -1.31% 1.92% 15 Voya Financial 11,473,190 2.30% -15.87% 45.24% 16 Prudential Companies 10,956,266 2.20% 35.79% -54.35% 17 CNO Companies 10,846,499 2.18% 0.35% 60.03% 18 North American Company 10,298,905 2.07% -9.05% -14.13% 19 Ameritas 9,550,965 1.92% 83.82% 12.84% 20 RiverSource Life 9,130,832 1.83% 6.46% -5.82% 21 National Western 8,445,682 1.70% 40.55% 18.44% 22 Fidelity & Guaranty Life 7,446,310 1.49% 12.14% 43.03% 23 EquiTrust 5,945,828 1.19% 3.57% 26.31% 24 American National 3,784,134 0.76% -3.23% -9.01% 25 Genworth Life 2,623,055 0.53% -13.84% 118.64% 26 Protective Life Insurance Company 2,439,129 0.49% 5.27% N/A 27 Columbus Life 1,685,211 0.34% -16.24% -14.13% 28 Kansas City Life 768,566 0.15% 118.90% 133.18% 29 Sagicor Life 759,688 0.15% -8.65% 86.82% 30 Americo 412,351 0.08% 31.88% 87.09% 31 Phoenix Companies 262,371 0.05% 15.43% 149.88% 32 Lafayette Life 122,777 0.02% -16.42% 0.55% 33 Principal Life (est) 70,530 0.01% 30.80% N/A Total $498,174,392 33.62% 23.68% 1Sales for this carrier have been restated Sales net of 1035’s and rollovers have been made available to participating carriers. 17 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066946 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 50 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Indexed Life Sales 01/01/14 – 12/31/14 Change From Total Sales Previous Rank Company 2014 Market Share Period 1 Pacific Life Companies $202,181,439 12.96% 8.38% 2 Aegon 170,208,012 10.91% 62.33% 3 National Life Group (NL/LSW) 135,004,842 8.65% 21.60% 4 Minnesota Life 112,982,000 7.24% 36.70% 5 Zurich Life (est) 74,177,967 4.75% 13.43% 6 Lincoln National Life 70,622,531 4.53% 35.24% 7 Allianz Life 70,172,012 4.50% 15.68% 8 AXA US 63,531,542 4.07% -12.85% 9 Nationwide 62,584,685 4.01% 39.84% 10 Accordia1 61,453,178 3.94% 16.01% 11 American General Life Companies 52,856,743 3.39% -10.09% 12 John Hancock 52,645,514 3.37% 18.61% 13 Midland National Life 49,509,700 3.17% 8.14% 14 Penn Mutual 45,812,240 2.94% 0.74% 15 Voya Financial 43,900,884 2.81% 76.15% 16 North American Company 42,517,911 2.72% 10.26% 17 CNO Companies 40,556,253 2.60% 71.94% 18 RiverSource Life 33,448,005 2.14% 179.32% 19 Prudential Companies 30,851,884 1.98% -54.28% 20 Fidelity & Guaranty Life 26,004,887 1.67% 40.41% 21 Ameritas 24,204,302 1.55% 12.63% 22 National Western 24,097,703 1.54% -51.06% 23 EquiTrust 22,637,546 1.45% 45.86% 24 American National 15,522,965 0.99% 12.16% 25 Genworth Life 10,499,152 0.67% 753.98% 26 Columbus Life 8,259,886 0.53% 22.18% 27 Protective Life Insurance Company 6,530,296 0.42% N/A 28 Sagicor Life 2,512,407 0.16% 39.78% 29 Kansas City Life 2,022,700 0.13% 127.84% 30 Americo 1,474,280 0.09% 99.27% 31 Phoenix Companies 817,354 0.05% 20.20% 32 Lafayette Life 653,369 0.04% -15.32% 33 Principal Life (est) 224,052 0.01% N/A Total $1,560,478,241 15.06% 1Sales for this carrier have been restated 18 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066947 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 51 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Combined Market Share 4th Quarter Market Share Top 3 Companies 36.04% Top 5 Companies 48.59% Top 10 Companies 69.04% Top 10 Products* 1. Western Reserve WRL Financial Foundation 6. Minnesota Life Eclipse 2. Pacific Life Pacific Indexed Performer LT 7. Allianz Life Allianz Life Pro+ 3. Life Insurance Co. of the SW FlexLife IUL 8. Nationwide Life & Ann. Nationwide YourLife Indexed UL 4. Pacific Life Pacific Indexed Accumulator 4 9. Pacific Life Indexed Pacific Estate Preserver 5. Accordia Life Lifetime Builder 10. Lincoln National LifeReserve Indexed UL Accumulator * Sales based on target premiums only Change From Previous Quarter Sales for the fourth quarter of 2014 were $498 million, compared with sales of $402 million for the fourth quarter of 2013. Fourth quarter indexed life sales were up nearly 34% when compared with the previous quarter, and up nearly 24% as compared to the same period last year. This was a record-setting quarter for indexed life insurance sales, topping the prior 4Q2012 record by 12.89%. Indexed Life Sales by Quarter $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 3Q04 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 In Thousands 19 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066948 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 52 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Indexed Life Sales Breakdown Sales by Crediting Method We asked indexed life companies to list their sales by crediting method; 72% of those surveyed responded, representing 60% of indexed life premium. We have attempted to segment sales by creating four broad subjective categories: Term End Point (TEP), Annual Point-to-Point (A-PTP), Daily/Monthly Averaging (AVG), Monthly Point-to-Point (M-PTP). The Term End Point category includes structures that base crediting on an initial and end point longer than one year. Sales by Crediting Method 82.6% 4.2% 4.9% 4.0% 1.5% 2.8% TEP A-PTP AVG M-PTP Fixed Other 4Q13 Sales by Crediting Method 79.7% 8.9% 4.0% 4.8% 1.5% 1.1% TEP A-PTP AVG M-PTP Fixed Other 4Q14 20 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066949 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 53 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Index Today, 25 indexed life carriers offer bond or equity indices beyond the S&P 500. We asked companies to list their sales by index; 80% of those surveyed responded, representing 65% of premium. For those companies offering multiple indices, non-S&P 500 index sales ranged from 1% to 5% of their total sales, with 21 exceptions. In the second quarter, we created a new category for “hybrid” index allocations, which are indices that are derived from one or more other indexes. The S&P 500 index currently represents nearly 60% of indexed life sales. Sales by Index 71.5% 21.5% 3.6% 0.0% 0.5% 0.7% 0.0% 0.0% 0.4% 0.2% 0.4% 1.2% 4Q13 Sales by Index 59.2% 26.1% 8.1% 3.9% 0.0% 0.4% 0.7% 0.0% 0.0% 0.2% 0.5% 0.3% 0.6% 4Q14 21 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066950 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 54 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Distribution Channel We asked indexed life companies to provide sales by distribution channel and 88% of those surveyed responded, representing 84% of sales. Independent insurance agents (Agency) represent just over 6 out of every 10 indexed life salespeople today. Note that Broker Dealer distribution reflects sales through wirehouses only. Bank and B/D distribution channels increased their market share this quarter at the expense of Agency and Career sales. 4th Quarter - 2013 Agency Bank B/D Career 65.9% 1.6% 10.9% 21.6% 4th Quarter - 2014 Agency Bank B/D Career 64.7% 1.4% 17.7% 16.3% Leaders by Channel Agency Bank B/D Career 1. Pacific Life Cos. 1. Pacific Life Cos. 1. Aegon 1. AXA US 2. Minnesota Life 2. Nationwide Financial 2. Nationwide 2. National Life Group 3. National Life Group 3. Lincoln National Life 3. Pacific Life Cos. 3. RiverSource Life 4. Lincoln National Life 4. American National 4. Minnesota Life 4. Prudential Companies 5. Allianz Life 5. N/A 5. Protective Life 5. Minnesota Life 22 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066951 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 55 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales by Surrender Period We asked indexed life companies to provide sales by product, and 94% of those surveyed responded, representing 91% of sales. We were able to provide data to illustrate sales by surrender period, based on their responses. This quarter we saw a decline in sales of 9 to 10-year surrender charge durations as well as 12 to 14- year durations to the benefit of all other contracts, as compared to the previous quarter. Sales by Surrender Period 48.7% 30.6% 14.0% 5.6% 1.1% 0 - 8 Yr 9 - 10 Yr 12 - 14 Yr 15 Yr 19 - 20 Yr Sales by Surrender Period 49.8% 37.0% 10.3% 1.4% 1.5% 0 - 8 Yr 9 - 10 Yr 12 - 14 Yr 15 Yr 19 - 20 Yr 4Q14 23 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066952 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 56 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales - Average Issue Age We asked indexed life companies to provide their average issue age for indexed life policies; 64% of those surveyed responded, representing 57% of sales. The average indexed life issue age reported was 41 years old. Average issue age ranged from 30 to 51 years old. Sales - Face Amount and Policy Count We asked indexed life companies to supply their total face amount and policy count for indexed life products sold during the fourth quarter; 86% of those surveyed responded, representing 79% of sales. By using this data, we were able to calculate the average policy face amount per participating carrier. The average face amount increased slightly over last quarter at $469,077. Individual carrier results ranged from $89,398 to $1,206,196. The policy count overall was 72,626 policies for the quarter; a decline of just over 7% as compared to the prior quarter. The average policy count was 2,201 policies; individual results ranged from 11 to 22,748 policies over the quarter. Sales - Average Fixed Premium versus Average Indexed Premium We asked indexed life companies to provide their average target premium on indexed UL and traditional fixed UL; 74% of those surveyed responded, representing 61% of sales. The average indexed UL target premium reported for the quarter was $7,749, an increase of nearly 9% from the prior quarter. The average indexed UL target premium ranged from $983 to $32,172. The average fixed UL target premium was $8,980, an increase of over 38% as compared to last quarter. The average fixed UL target premium ranged from $894 to $64,355. Average Indexed Life Sale Premium $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 24 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066953 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 57 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Annual Indexed Life Premium (in millions) $1,803 $1,560 $1,356 $973 $696 $512 $539 $531 $352 $186 $139 $64 $62 $63 $84 $99 $101 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Comments Wink’s Sales & Market Report will continue to gather indexed sales data on a quarterly basis; the report for the first quarter of 2015 will be available in May, 2015. We continue to search for additional ways to add value to this report, so if there is supplementary data that you would like to see please give me a call. Thank you! Sheryl J. Moore President and CEO Wink, Inc. Moore Market Intelligence (515) ANN-UITY March 10, 2015 25 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066954 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 58 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales Trends Indexed Annuity Sales Leaders 1997 1998 1999 Sun Life CNO Companies Jackson National Life Jackson National Life Jackson National Life CNO Companies CNO Companies Symetra Financial (est) Fidelity & Guaranty Life Symetra Financial (est) Allianz Life American Equity Companies Allstate Financial Sun Life Allianz Life 2000 2001 2002 Allianz Life Allianz Life Allianz Life American Equity Companies Midland National Life Midland National Life Jackson National Life American Equity Companies American Equity Companies Midland National Life Athene USA North American Company CNO Companies Jackson National Life Athene USA 2003 2004 2005 Allianz Life Allianz Life Allianz Life Athene USA Fidelity & Guaranty Life American Equity Companies American Equity Companies American Equity Companies Athene USA Midland National Life Sun Life Fidelity & Guaranty Life Fidelity & Guaranty Life Athene USA Voya Financial 2006 2007 2008 Allianz Life Allianz Life Athene USA Athene USA Athene USA Allianz Life Voya Financial American Equity Companies American Equity Companies Fidelity & Guaranty Life Fidelity & Guaranty Life Voya Financial Midland National Life Midland National Life Midland National Life 2009 2010 2011 Allianz Life Allianz Life Allianz Life Athene USA Athene USA Athene USA American Equity Companies American Equity Companies American Equity Companies Jackson National Life Lincoln National Life Great American Ins. Group Lincoln National Life Voya Financial North American Company 2012 2013 2014 Allianz Life Allianz Life Allianz Life Athene USA Security Benefit Life Security Benefit Life American Equity Companies American Equity Companies American Equity Companies Security Benefit Life Great American Ins. Group Great American Ins. Group Great American Ins. Group Athene USA Athene USA 26 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066955 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 59 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales Trends Indexed Annuity Sales Leaders 1Q14 2Q14 3Q14 Allianz Life Allianz Life Allianz Life Security Benefit Life Security Benefit Life American Equity Companies American Equity Companies American Equity Companies Security Benefit Life Great American Ins. Group Great American Ins. Group Great American Ins. Group Athene USA Athene USA Athene USA 4Q14 Allianz Life American Equity Companies Security Benefit Life Great American Ins. Group Athene USA 27 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066956 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 60 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales Trends Indexed Life Sales Leaders 1998 1999 2000 American General Life Co. American General Life Co. American General Life Co. (est) Voya Financial Voya Financial CNO Companies CNO Companies CNO Companies Voya Financial Ameritas Americo Aviva Aegon National Life Group Allstate Financial 2001 2002 2003 Aviva Aviva Aviva CNO Companies CNO Companies CNO Companies American General Life (est) Lafayette Life Lafayette Life Allstate Financial Allstate Financial American General Life (est) Lafayette Life Voya Financial (est) Allianz Life 2004 2005 2006 Aviva Aviva Aviva CNO Companies Fidelity & Guaranty Life Aegon Fidelity & Guaranty Life American General Life (est) National Life Group American General Life (est) CNO Companies American General Life Co. Lafayette Life Allianz Life Allianz Life 2007 2008 2009 Aviva Aviva Aviva American General Life Co. American General Life Co. Pacific Life Companies Aegon Pacific Life Companies National Life Group National Life Group National Life Group Aegon Fidelity & Guaranty Life Aegon Minnesota Life 2010 2011 2012 Aviva AXA US Aviva Pacific Life Companies Aviva Pacific Life Companies Minnesota Life Pacific Life Companies AXA US National Life Group Aegon Aegon Aegon National Life Group National Life Group 2013 2014 1Q14 Pacific Life Companies Pacific Life Companies Pacific Life Companies AXA US Aegon Aegon National Life Group National Life Group National Life Group Aegon Minnesota Life Minnesota Life Minnesota Life Zurich American (est) Lincoln National Life 28 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066957 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 61 of 153 Wink’s Sales & Market Report 4th Quarter, 2014 Sales Trends Indexed Life Sales Leaders 2Q14 3Q14 4Q14 Pacific Life Companies Pacific Life Companies Pacific Life Companies Aegon Aegon Aegon National Life Group National Life Group National Life Group Minnesota Life Minnesota Life Minnesota Life Allianz Life Zurich American (est) Accordia 29 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK-WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright© 2015. All Rights Reserved. AR066958 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 62 of 153 Wink’s Product Report 4th Quarter, 2014 Part 2 ______ Indexed Annuities Indexed Life 2 Introduction 2 4 Carriers in the Market 93 5 Product Lineup 93 10 Charges on the Contract 97 13 Commission Rates N/A 44 Crediting Methods 113 60 Bonuses 124 65 Guaranteed Lifetime Withdrawal Benefits N/A 74 Maximum Issue Age 126 75 Minimum Guarantees 128 79 Minimum Premium/Face 133 80 Moving Parts/Pricing Levers 137 86 Multiple Indices 137 N/A Underwriting Risk Classes 139 Wink’s Sales & Market Report is published by Wink, Inc., 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be copied or duplicated without prior consent. 03/15 Copyright© 2014. All Rights Reserved. AR066959 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 63 of 153 Wink’s Product Report 4th Quarter, 2014 Introduction As of December 31, 2014, we had identified 52 companies that were offering indexed annuities and 50 companies that were offering indexed life insurance products. This report is designed to reflect the state of the indexed insurance industry by listing the players and providing a comprehensive look at product features, design and structure. Most of the categories are straightforward, and the information is easily identified. One area subject to interpretation is the crediting methodology section. The number of distinct index crediting structures is 10, but others may use different names for a particular structure (i.e. Long Term Point-to-Point as opposed to Term End Point). We have attempted to fully disclose areas where interpretations may differ. The report is based on information available in February, 2015. The next quarterly report will be available in May, 2015. The information obtained is believed accurate, but is not warranted. Carriers in the Market New product development in the fourth quarter of 2014 was the lowest it has been in two years. The number of products that were pulled from companies’ shelves during the quarter was also the lowest it has been in nearly two years. In total, ten new indexed annuities were introduced by five different insurance companies this quarter. Alternatively, there were three indexed annuities pulled from companies’ shelves this quarter. Comparison of Product Launches to Suspensions 40 35 30 25 20 15 10 # of# Products 5 0 Month Product Launches Product Suspensions www.LookToWink.com Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 2 AR066960 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 64 of 153 Wink’s Product Report 4th Quarter, 2014 In the fourth quarter, Allianz Life of North America introduced a proprietary indexed annuity for their Wells Fargo bank distribution partner, Essential Income 7 Annuity. This product is nearly identical to the preceding Allianz Core Income 7 Annuity and the Allianz Signature 7 Annuity, but there are a few nuances. Essential Income 7 offers just two annual point-to-point crediting methods, and much stronger minimum caps of 3.00%. The Essential Income features simpler penalty-free withdrawals, and no unemployment waiver; plus a stronger death benefit option of paying the Guaranteed Lifetime Withdrawal Benefit (GLWB) over a five-year period. This product fits the typical design of a bank- oriented indexed annuity, which is good news for the Wells Fargo distribution. For the third straight quarter, American General Life Insurance Company was an unrelenting product development machine. This quarter the company focused their efforts on creating a series of proprietary indexed annuities for their Primerica distribution partner, Power Advantage 7 Index Annuity, Power Advantage 7 Index Annuity with Lifetime Income Plus GLWB, Power Advantage 10 Index Annuity, Power Advantage 10 Index Annuity with Lifetime Income Plus GLWB. While the ten-year products offer premium bonuses with vesting schedules, the 7-years have no bonuses. As their names would allude, the versions “with lifetime income Plus GLWB” have an optional GLWB rider. Simple annual reset crediting methods feature rate banding at the $75,000 initial premium band. Generous liquidity through penalty-free withdrawals, surrender charge waivers, and death all leave a signature American General trademark on these proprietary products. Fidelity and Guaranty Life Insurance Company chose to reprice their Prosperity Elite 7, Prosperity Elite 10, and Prosperity Elite 14 products in the fourth quarter. A simplified Guaranteed Minimum Death Benefit (GMDB) was not the only motivation for this product refresh; a market value adjustment (MVA) now adorns this annuity series, along with a new annual point-to-point crediting method based on the Gold Commodity. Notwithstanding, the products are identical to their predecessors, so F&G agents won’t be challenged in their understanding of the new Prosperity Elite series. Among the companies launching products that don’t fit a cookie-cutter mold, Genworth Life and Annuity Insurance Company was at the forefront with their recent introduction of the SecureLiving Growth + indexed annuity. A ten-year product, the Growth + features a mandatory GLWB that is reminiscent of the Allianz 360’s unique rider, but with a few modifications. The indexed crediting on the Growth + will cause you to do a double-take with its bailout provision on the annual point-to-point strategy, the banded rates at both $100,000 and $250,000 initial premium bands, and the distinctive modified performance triggered strategy, which credits different amounts depending on whether the index is flat/positive over a single year term or a two-year term. Genworth agents should not be surprised at this company’s ability to make standard crediting methods look new and exciting (see the CapMax method on Wink’s AnnuitySpecs tool). With competitive street level compensation and supplemental compensation based on aggregate GLWB sales at Genworth, the company’s salespeople have something to talk about in their new Growth + product. Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 3 AR066961 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 65 of 153 Wink’s Product Report 4th Quarter, 2014 While many would think that two ten-year indexed annuities is sufficient for a company’s general distribution, Great American Life Insurance Company disagreed and rolled-out the American Custom 10. Quite dissimilar from the American Valor 10 and Safe Return products, the Custom features lower surrender charges, a MVA, and a lesser Minimum Guaranteed Surrender Value (MGSV) based on 90% of premiums paid. Caps and rates on this annuity are relatively-competitive to the company’s other 10- year products, feature rate banding at an initial premium band of $150,000 and greater, and the Custom offers indexed interest based on the performance of the SPDR Gold Shares. While only 5% penalty-free withdrawals are available on this new indexed annuity, it also features a cumulative penalty-free withdrawal option that costs 0.25% annually. A choice of two different GLWBs is available, including a rider with a “stacking feature,” one of the more trendy developments in the indexed annuity GLWB space. A true break from tradition, the American Custom 10 gives Great American agents something new to look into this quarter. Of the 52 insurance companies in the indexed annuity market at the close of fourth quarter 2014, 10 offered a single product. If you separate the indexed annuities on the market by product features, there are: 317 Index Annuities - Segmented By Product 1,648 Index Annuity Strategies – Segmented By Index Crediting Method Carriers Offering Indexed Annuities Allianz Life of North America American Equity Investment Life/AEIL American General Life Ins. /AIG Life & Retirement American National Insurance Company American United Life Insurance Company Americo Financial Life & Annuity Insurance Company Ameritas Life Insurance Corporation/Ameritas Ameritas Life Insurance Corporation of New York/Ameritas Annuity Investors Life Insurance Company/GALIC Athene Annuity & Life Assurance Company Athene Annuity and Life Company Bankers Life & Casualty Company/CNO Companies CUNA Mutual Life Eagle Life Insurance Company/AEIL EquiTrust Life Insurance Company Farm Bureau Life Insurance Company/Farm Bureau Fidelity & Guaranty Life Insurance Company Fidelity & Guaranty Life Insurance Company of NY Forethought Life Insurance Co./Global Atlantic Genworth Life & Annuity Insurance Company Great American Life Insurance Company/GALIC Greenfields Life Insurance Company/Farm Bureau Guggenheim Life & Annuity Horace Mann Integrity Life Insurance Company Jackson National Life Insurance Company Lafayette Life Insurance Company Life Insurance Company of the SW Lincoln Life & Annuity Company of NY/LFG Lincoln National Life Insurance Company/LFG Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 4 AR066962 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 66 of 153 Wink’s Product Report 4th Quarter, 2014 Carriers Offering Indexed Annuities Midland National Life Insurance Company National Western Life Insurance Company Nationwide Life Insurance Company Nationwide Life & Annuity Insurance Company North American Company for Life & Health Oxford Life Insurance Company Pacific Life Insurance Company PHL Variable Insurance Company/Phoenix Physicians Life Insurance Company Principal Life Protective Life Insurance Company Reliance Standard Life Insurance Company Sagicor Life Insurance Company Security Benefit Life Insurance Company Sentinel Security Life Insurance Company The Standard Symetra Life Insurance Company Thrivent Financial The United States Life Ins. Co. in the City of NY Voya Insurance and Annuity Company Washington National Insurance Company/CNO Companies Product Lineup Carrier Product(s) Allianz Life Allianz 222 Annuity Allianz 360 Annuity Allianz 365i Annuity Allianz Core Income 7 Annuity Allianz Signature 7 Annuity Endurance Plus MasterDex X Allianz Life Essential Income 7 Annuity* (Wells Fargo) American Equity Investment Life Advantage Gold Benefit Gold Bonus Gold CT Gold Foundation Gold Heritage Gold Integrity Gold Retirement Gold Traditions Gold American General Life AG Choice Index 10 Annuity Power Index Plus Income Annuity Power Index Plus Annuity Power 7 Protector Power 7 Protector Plus Income Power 10 Protector Power 10 Protector Plus Income Power Index Choice Annuity 7-Year American General Life Power Advantage 7* Power Advantage 10* (Primerica) American General Life Power Select Builder Power Select Plus Income (Market Synergy Group) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 5 AR066963 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 67 of 153 Wink’s Product Report 4th Quarter, 2014 Carrier Product(s) American General Life Power Index 5 Plus Annuity Power Index 7 Plus Annuity (Wells Fargo) American National Life Strategy Indexed Annuity Plus 7 Strategy Indexed Annuity Plus 10 Value-Lock 10 American United Life Freedom Builder 5 Freedom Builder 7 Freedom Builder 9 Americo Future Provider Future Provider Bonus Ultimate One Index 7 Ultimate One Index 9 Ultimate One Index 9 Bonus Americo LibertyMark 7 LibertyMark 10 (Legacy Marketing Group) LibertyMark 10 Plus LibertyMark 10 LT LibertyMark 10 LT Plus Ameritas Life Compass IA Annuity Investors Life FlexMax FlexMax 14 FlexMax Plus SingleMax 10 Athene Annuity & Life Assurance Co. ATHENE Performance Elite ATHENE Performance Elite Plus ATHENE Performance Elite 10 ATHENE Performance Elite 10 Plus ATHENE Performance Elite 14 ATHENE Performance Elite 14 Plus Choice 10 Enhanced Choice 8 Enhanced Choice 12 Athene Annuity and Life Company BalancedChoice Annuity 8 BalancedChoice Annuity 10FL BalancedChoice Annuity 10S BalancedChoice Annuity 12 Benefit 10 Income Preferred Bonus Income Preferred Ten TargetHorizon 5 TargetHorizon 10 TargetHorizon 10 Select TargetHorizon 15 Bankers Life & Casualty Security Builder GrowthPoint Security Builder Premium Bonus Indexed Annuity CUNA Mutual Life MEMBERS Index Annuity 5-Yr MEMBERS Index Annuity 7-Yr MEMBERS Index Annuity 10-Yr Eagle Life Insurance Company Eagle Select 6 Eagle Select 8 Eagle Select 10 EquiTrust Life Insurance Company Builder Bonus Index MarketBooster Index MarketPower Bonus Index MarketTen Bonus Index MarketTwelve Bonus Index MarketValue Index Farm Bureau Life Insurance Company Income Guard Indexed Annuity Fidelity & Guaranty Life FG AccumulatorPlus 10 FG AccumulatorPlus 14 FG Index- Choice 10 Income and WealthBuilder 7 Income and WealthBuilder 10 Performance Pro Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 6 AR066964 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 68 of 153 Wink’s Product Report 4th Quarter, 2014 Carrier Product(s) Fidelity & Guaranty Life Prosperity Elite 7* Prosperity Elite 10* Prosperity Elite 14* Safe Income Plus Fidelity & Guaranty Life AdvanceMark Ultra 10 AdvanceMark Ultra 10 LT (Legacy Marketing Group) AdvanceMark Ultra 14 LegendMark 10 LegendMark 10LT LegendMark 10 LT Plus LegendMark 10 Plus LegendMark 14 LegendMark 14 Plus SpectraMark SpectraMark LT Fidelity & Guaranty Life of New York FGNY Index-Safety 7 FGNY Index-Choice 10 Forethought Life Bonus Advantage ForeAccumulation 6-Year ForeAccumulation 8-Year ForeFront Index Bonus- ForeSpending ForeFront Index Choice- ForeSaving ForeFront Index Choice-ForeSharing ForeFront Index Choice-ForeSpending ForeIncome 7-Year ForeIncome 9-Year Forethought Income 150+ Forethought Income 125+ Index Bonus 115 Genworth Life & Annuity Insurance Company SecureLiving Growth+* SecureLiving Index 5 SecureLiving Index 7 SecureLiving Index 10 Plus Great American Life American Custom 10* American Legend III American Valor 10 AssuranceProtect 6 AssuranceSelect 7 Safe Outlook Safe Return Great American Life American Freedom Liberty 6 American Freedom Liberty 8 (Wells Fargo) Greenfields Life Insurance Company Income Guard Indexed Annuity Guggenheim Life & Annuity Preserve Plus 3-Year Preserve Plus 5-Year Preserve Plus 7-Year Horace Mann Destination Fixed Indexed Annuity 6-Year Destination Fixed Indexed Annuity 9-Year Integrity Life Insurance Company Indextra Fixed Indexed Annuity 7-Year Indextra Fixed Indexed Annuity 10-Year Jackson National Life Elite Choice 8 & 10 Year Elite Choice Rewards 8 & 10 Year Jackson AscenderPlus Select 7 & 10 Year Select Annual Reset 7 Year Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 7 AR066965 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 69 of 153 Wink’s Product Report 4th Quarter, 2014 Carrier Product(s) Lafayette Life Insurance Company Marquis Centennial 7 Marquis Centennial 10 Life Insurance Co. of the Southwest LoneStar SecurePlus Elite SecurePlus Elite SecurePluse Elite 3 SecurePlus Elite 5 SecurePlus Gold SecurePlus Marquee 3 SecurePlus Marquee 8 SecurePlus Paramount 5 SecurePlus Platinum SecurePlus Preferred 2 SecurePlus Preferred 6 SecurePlus Reliance Lincoln Life & Annuity Co. of NY OptiChoice NY 5 OptiChoice NY 7 OptiChoice NY 9 Lincoln National Life New Directions 6 New Directions 8 OptiChoice 5 OptiChoice 7 OptiChoice 9 OptiPoint 8 OptiPoint 10 Midland National Life Capstone 10- Yr Capstone 14- Yr Innovator Choice 10- Yr Innovator Choice 14- Yr LiveWell FIA Mainstreet Four MNL Endeavor 4 MNL Endeavor 6 MNL Endeavor 8 MNL Endeavor 8 Plus MNL Endeavor 12 MNL Endeavor 12 Plus MNL IncomeVantage 10 MNL IncomeVantage 14 MNL Pinnacle MNL RetireVantage 10 MNL RetireVantage 14 MNL SecureVantage 10 MNL SecureVantage 14 Paragon Plus 10- Yr Paragon Plus 14- Yr Prosperity Choice 10- Yr Prosperity Choice 14- Yr Select 6- Yr Select 8- Yr Select 10- Yr Select 14- Yr Midland National Life MNL Prosper 5 MNL Prosper 7 (Raymond James) MNL Prosper 10 National Western Life Global Lookback NWL Impact 7 NWL Impact 7S NWL Impact 10 NWL Impact 10 FL Ultra Benefit Ultra Classic Ultra Future Ultra Value Nationwide Clear Horizon Nationwide Life & Annuity Insurance Company Nationwide New Heights North American Company Charter 10- Yr Charter 14- Yr Freedom Choice 8- Yr Freedom Choice 10- Yr Freedom Choice 14- Yr NA Performance Choice 8 NA Performance Choice 8 Plus NA Performance Choice 12 NA Performance Choice 12 Plus NAC IncomeChoice 10 NAC RetireChoice 10 NAC RetireChoice 14 NAC SecureChoice 10 NAC SecureChoice 14 North American Pillar Precision 10- Yr Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 8 AR066966 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 70 of 153 Wink’s Product Report 4th Quarter, 2014 Carrier Product(s) North American Company Precision 14- Yr Prizm Plus 10- Yr Prizm Plus 14- Yr Ten Oxford Life Insurance Company Royal Select Fixed Indexed Annuity Select Fixed Indexed Annuity Silver Select Fixed Indexed Annuity Pacific Life Insurance Company Pacific Index Choice 6 Pacific Index Choice 8 Pacific Index Choice 10 PHL Variable Personal Protection Choice Phoenix Index Select Gold Bonus Phoenix Personal Income Ann. Phoenix Reflections Gold Bonus PHL Variable Phoenix Next Generation Ann. Phoenix Next Generation Bonus Annuity (The AltiSure Group) Premier Lifestyle Annuity Secure Lifestyle Bonus Annuity PHL Variable Phoenix Personal Retirement Choice (Plan Right Partners) PHL Variable CommandMark CommandMark IR (Legacy Marketing Group) CommandMark IR LT CommandMark LT CommandMark Plus CommandMark Plus LT Physicians Life Vista Index Accelerator 10-Yr Vista Index Accelerator 15-Yr Vista Index Advantage 5-Yr Vista Index Advantage 7-Yr Vista Index Advantage 10-Yr Principal Life Principal Performance Annuity 7 Protective Life Insurance Company Protective IA II 5-Year Protective IA II 7-Year Protective IA II 10-Year Reliance Standard Keystone Index Annuity 5-Yr Keystone Index Annuity 7-Yr Keystone Index Annuity 10-Yr Sagicor Life Platinum Series Sage Advantage FIA Security Benefit Life Foundations Annuity 5 Foundations Annuity 7 Secure Income Annuity Total Value Annuity Sentinel Security Life Insurance Company Summit Bonus Index Annuity The Standard Index Growth Annuity 5 Index Growth Annuity 7 Index Select Annuity 5 Index Select Annuity 7 Index Select Annuity 10 Symetra Financial Symetra Edge Pro FIA 5-Yr Symetra Edge Pro FIA 7-Yr Thrivent Financial for Lutherans Security Preference FIA 5-Year Security Preference FIA 7-Year Security Preference FIA 9-Year The United States Life Ins. Co. in the City of NY Power Index 7-Year Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 9 AR066967 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 71 of 153 Wink’s Product Report 4th Quarter, 2014 Carrier Product(s) Voya Insurance and Annuity Company Voya Secure Index Five Voya Secure Index Opportunities Plus Voya Secure Index Outlook Voya Secure Index Seven Voya Wealth Builder Eight Annuity Voya Wealth Builder Six Annuity Washington National Patriot * Indicates new this quarter # Indicates Hybrid Index Annuity Charges on the Contract Surrender charges on indexed annuities in the fourth quarter ranged from three years (on Guggenheim Life & Annuity’s Preserve Plus 3-Year) to a 16-year charge (on the Bonus Gold from American Equity). The share of products with a 10-year surrender charge remained level this quarter. As of the close of the fourth quarter, just over 44% of indexed annuities on the market had a ten-year term. This quarter we saw a decline in the share of indexed annuities with 8 to 9-year surrender charge periods as well as surrender charges of 11+ years; all to the benefit of all other surrender charge periods. Fifty percent of the indexed annuities introduced in the fourth quarter had a 10-year term. No. of Products by Surrender Period 44.2% 20.4% 14.7% 8.2% 12.5% 0.0% 5 Yr & Less 6 - 7 Yr 8 - 9 Yr 10 Yr 11+ Yr Annuitize Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 10 AR066968 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 72 of 153 Wink’s Product Report 4th Quarter, 2014 Surrender Charges/Term Ameritas Life– 8 yr Allianz Life – 7, 7, 7, 10, 10, 10, 10, 10, yr Farm Bureau Life Insurance Company– 9 yr American Equity – 5, 6, 10, 10, 10, 10, 10, 10, 16 yr Greenfields Life Insurance Company– 9 yr American General Life – 5, 7, 7, 7, 7, 7, 7, 7, 10, 10, 10, 10, 10, 10 yr Nationwide – 7 yr American National Life - 7, 10, 10 yr Nationwide Life & Annuity– 10 yr American United Life – 5, 7, 9 yr Principal Life – 7 yr Americo - 7, 7, 9, 9, 10, 10, 10, 10, 10, 10 yr Sagicor Life– 9 yr Annuity Investors Life - 7, 10, 10, 14 yr Sentinel Security Life Insurance Company– 10 yr Athene Annuity & Life Assurance – 8, 10, 10, 10, 10, 10, 10, 10, 12 yr The US Life Ins. Co. in the City of NY– 7 yr Athene Annuity and Life Company – 5, 8, 10, 10, 10, 10, 10, 10, 10, Washington National – 12 yr 12, 15 yr Bankers Life & Casualty - 10, 10 yr CUNA Mutual Life - 5, 7, 10 yr Eagle Life Insurance Company – 6, 8, 10 yr EquiTrust - 9, 9, 10, 10, 14, 14 yr Fidelity & Guaranty Life - 7, 7, 10, 10, 10, 10, 10, 10, 10, 10, 10, 10, 10, 10, 10, 10, 14, 14, 14, 14, 14 yr Fidelity & Guaranty Life of New York - 7, 10 yr Forethought Life – 6, 7, 8, 9, 10, 10, 10, 10, 10, 10, 10, 10 yr Genworth Life & Annuity Insurance Company – 5, 7, 10, 10 yr Great American Life - 6, 6, 6, 7, 7, 8, 10, 10, 10 yr Guggenheim Life & Annuity - 3, 5, 7 yr Horace Mann - 6, 9 yr Integrity Life Insurance Company – 7, 10 yr Jackson National Life - 7, 7, 8, 8, 10, 10, 10 yr Lafayette Life – 7, 10 yr Life Insurance Co. of the SW - 10, 10, 10, 10, 10, 10, 10, 10, 12, 12, 15, 15 yr Lincoln Life & Annuity Co. of NY – 5, 7, 9 yr Lincoln National Life - 5, 6, 7, 8, 8, 9, 10 yr Midland National - 4, 4, 5, 6, 6, 7, 8, 8, 8, 8, 10, 10, 10, 10, 10, 10, 10, 10, 10, 10, 12, 12, 14, 14, 14, 14, 14, 14, 14, 14 yr National Western Life - 7, 7, 9, 9, 10, 10, 13, 14, 15 yr North American Company- 8, 8, 8, 10, 10, 10, 10, 10, 10, 10, 10, 10, 12, 12, 14, 14, 14, 14, 14, 14 yr Oxford Life – 10, 10, 10 yr Pacific Life Insurance Company – 6, 8, 10 yr Phoenix Life - 5, 5, 10, 10, 10, 10, 10, 10, 10, 10, 10, 12, 12, 12, 12 yr Physicians Life - 5, 7, 10, 15, 15 yr Protective Life Insurance Company – 5, 7, 10 yr Reliance Standard - 5, 7, 10 yr Security Benefit Life – 5, 7, 10, 10 yr The Standard - 5, 5, 7, 7, 9 yr Symetra Financial- 5, 7 yr Thrivent Financial for Lutherans - 5, 7, 9 yr Voya Insurance and Annuity Company - 5, 6, 7, 8, 10, 10 yr Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 11 AR066969 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 73 of 153 Wink’s Product Report 4th Quarter, 2014 Market Value Adjustments (MVAs) Market Value Adjustments, or MVAs, are highly misunderstood on annuities. One needs to remember that as long as an annuitant does not surrender more than their penalty-free amount, then an MVA is not applicable. Upon surrender, an annuitant with a policy that features an MVA may be subject to a negative adjustment to their account value if interest rates are higher at the time of withdrawal than at the time of issue. A positive adjustment can occur if interest rates are lower than at the time of surrender. Most importantly, the calculations that are used for market value adjustments can vary widely from one carrier to the next. Today, 54% of indexed annuities have a Market Value Adjustment. None of the carriers in New York have MVAs on their products; neither Fidelity & Guaranty of NY, Lincoln Life & Annuity Company of New York, nor The United States Life Insurance Company in the City of New York. There are some companies that do not have any MVAs on their indexed products. However, there are numerous carriers that use MVAs on some of their annuities. MVAs on Some IA Products No MVAs on IA Products American General Life Allianz Life American National Life American Equity Investment Life Athene Annuity & Life Assurance Company American United Life Fidelity & Guaranty Life Americo Forethought Life Ameritas Life Life Insurance Co. of the Southwest Bankers Life & Casualty Midland National CUNA Mutual Life The Standard Eagle Life Insurance Company Voya Insurance and Annuity Company Farm Bureau Life Insurance Company Fidelity & Guaranty Life of NY Great American Life Greenfields Life Insurance Company Horace Mann MVAs on All IA Products Integrity Life Insurance Company Annuity Investors Life Jackson National Life Athene Annuity and Life Company Lafayette Life EquiTrust Lincoln Life & Annuity Company of NY Genworth Life & Annuity Insurance Company National Western Life Guggenheim Life & Annuity Nationwide Lincoln National Life Physicians Life Nationwide Life & Annuity Insurance Company Principal Life North American Company Protective Life Insurance Company Oxford Life Insurance Company Reliance Standard Pacific Life Insurance Company Sagicor Life PHL Variable Thrivent Financial for Lutherans Security Benefit Life The United States Life Ins. Co. in the City of NY Sentinel Security Life Insurance Company Washington National Symetra Financial Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 12 AR066970 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 74 of 153 Wink’s Product Report 4th Quarter, 2014 Products by Carrier Midland National Life offers the most indexed annuities, with a whopping 30 products. Fidelity & Guaranty Life comes-in second with 22 different indexed annuities. Although there are 52 insurance companies in the indexed annuity market, the top ten carriers (in terms of products being offered) offer 53.9% of the indexed annuities available on the market today. Commission Rates (First Year) At the close of the fourth quarter, there was one indexed annuity that paid a first-year commission as low as 0.50%; on the other end of the spectrum there were two products that paid commissions as high as 12.00%. Keep in mind that commissions are even lower for older-aged annuitants. The commission paid to the street level agent remains relatively-low as a result of a challenging pricing environment. As of the close of the quarter, the greatest market share of products paid 7.00%; capturing a 21.60% market share. The next runner-up is the 6.00% commission, taking another 11.40% of the market. At the close of the fourth quarter, more than 58.00% of indexed annuities paid less than 7.00% street level commission, a trend that was up slightly from the prior quarter. Products by Agent Commission Level 30.8% 23.1% 20.5% 15.0% 8.1% 0.7% 1.8% < 5% 5% - 6% - 7% - 8% - 9% - 10% or 5.99% 6.99% 7.99% 8.99% 9.99% > Commission Amount Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 13 AR066971 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 75 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Allianz Life Allianz 222 Annuity Ages 0-75 a). 7.00% b). 5.00% & 0.50% trail c). 2.25% & 1.00% trail Ages 76-80 a). 5.00% b). 3.50% & 0.50% trail c). 2.00% & 0.75% trail Allianz 360 Annuity Ages 0-75 a). 7.00% b). 5.00% & 0.50% trail c). 2.25% & 1.00% trail Ages 76-80 a). 5.00% b). 3.50% & 0.50% trail c). 2.00% & 0.75% trail Allianz 365i Annuity Ages 0-75 a). 7.00% b). 5.00% & 0.50% trail c). 2.25% & 1.00% trail Ages 76-80 a). 5.00% b). 3.50% & 0.50% trail c). 2.00% & 0.75% trail Allianz Core Income 7 Annuity Ages 0-75 a). 4.50% b). 1.75% & 0.50% trail Ages 76-80 a). 3.00% b). 0.50% & 0.50% trail Allianz Signature 7 Annuity Ages 0-75 a). 4.25% b). 1.75% & 0.50% trail Ages 76-80 a). 2.75% Endurance Plus Ages 0-75 a). 7.00% b). 5.00% & 0.50% trail c). 2.25% & 1.00% trail Ages 76-80 a). 5.00% b). 3.50% & 0.50% trail c). 2.00% & 0.75% trail MasterDex X Ages 0-75 a). 7.00% b). 5.00% & 0.50% trail c). 2.25% & 1.00% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 14 AR066972 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 76 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Allianz Life MasterDex X Ages 76-80 a). 5.00% b). 3.50% & 0.50% trail c). 2.00% & 0.75% trail American Equity Investment Life Advantage Gold Ages 0-75 76-80 Year One a). 7.00% 5.25% b). 6.00% 4.50% Year Two - Three a). 0.00% 0.00% b). 1.00% 0.75% Benefit Gold Ages 0-75 76-80 Year One a). 7.00% 5.25% b). 6.00% 4.50% Year Two - Three a). 0.00% 0.00% b). 1.00% 0.75% Bonus Gold Ages 0-75 76-80 Year One a). 7.00% 5.25% b). 6.00% 4.50% c). 4.50% & 0.50% trail 3.40% & 0.50% trail Year Two - Three a). 0.00% 0.00% b). 1.00% 0.75% CT Gold Ages 0-75 76-80 Year One 3.25% 2.45% Year Two - Three 2.00% 1.50% Foundation Gold Ages 0-75 76-80 Year One a). 6.80% 5.10% b). 5.80% 4.35% c). 4.50% & 0.50% trail 3.35% & 0.38% trail Year Two - Three a). 0.00% 0.00% b). 1.00% 0.75% Heritage Gold All Ages Years One - Five 0.50% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 15 AR066973 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 77 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission American Equity Investment Life Integrity Gold Ages 0-75 76-80 Year One a). 4.75% 3.60% b). 4.13% 3.09% Year Two - Three a). 0.00% 0.00% b). 0.68% 0.51% Retirement Gold Ages 0-75 Year One a). 7.00% b). 6.00% c). 4.50% & 0.50% trail Year Two - Three a). 0.00% b). 1.00% Traditions Gold Ages 0-75 76-80 Year One a). 5.25% 3.95% b). 4.50% 3.40% c). 2.75% & 0.50% trail 2.10% & 0.38% trail Year Two - Three a). 0.00% 0.00% b). 0.75% 0.55% American General Life Power Select Builder & Ages 0-75 Power Select Plus Income a). 7.00% b). 2.25% & 1.00% trail Ages 76-78 a). 2.25% b). 2.25% & 0.60% trail Power 7 Protector Ages 0-70 a). 4.00% b). 1.50% & 0.50% trail Ages 71-75 a). 2.00% & 0.025% trail Power 7 Protector Plus Income Ages 0-80 a). 4.00% b). 1.50% & 0.50% trail Power 10 Protector & Ages 0-70 Power 10 Protector Plus Income a). 7.00% b). 4.25% & 0.50% trail c). 1.75% & 1.00% trail Ages 71-75 a). 5.00% b). 2.25% & 0.50% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 16 AR066974 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 78 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission American National Life Strategy Indexed Annuity Plus 7 Ages 0-75 76-80 5.00% 4.00% Strategy Indexed Annuity Plus 10 Ages 0-75 76-80 7.00% 5.50% Value-Lock 10 Ages 0-75 76-80 7.00% 5.50% American United Life Freedom Builder 5 Ages 0-75 76-85 2.00% 1.50% Freedom Builder 7 Ages 0-75 76-85 3.00% 2.25% Freedom Builder 9 Ages 0-75 76-85 4.00% 3.00% Americo LibertyMark 7 Ages 0-80 81-85 7.00% 5.00% LibertyMark 10 Ages 0-80 81-85 8.00% 7.00% LibertyMark 10 Plus All Ages 7.00% LibertyMark 10 LT Ages 0-80 81-85 7.00% 5.50% LibertyMark 10 LT Plus All Ages 6.50% Ameritas Life Compass Index Ages 0-79 a). 5.00% & 0.10% trail b). 2.50% & 0.30% trail c). 0.65% & 0.65% trail d). 0.10% & 0.75% trail Ages 80-85 2.00% & 0.10% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 17 AR066975 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 79 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Annuity Investors Life FlexMax Ages 0-70 a). 5.50% b). 3.50% c). 0.00% & 0.25% trail Ages 71-85 a). 4.00% b). 2.50% c). 0.00% & 0.25% trail FlexMax 14 Ages 18-55 a). 8.25% b). 6.75% c). 0.00% & 0.80% trail Ages 56-70 a). 4.50% b). 4.50% c). 0.00% & 0.80% trail Ages 71-85 a). 3.50% b). 3.50% c). 0.00% & 0.80% trail FlexMax Plus Ages 18-70 a). 6.25% b). 4.50% c). 0.00% & 0.35% trail Ages 71-85 a). 4.75% b). 2.75% c). 0.00% & 0.35% trail SingleMax 10 Ages 0-75 a). 6.50% b). 4.50% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 4.25% & 0.50% trail (qtrly starting in month 12) Ages 76-80 a). 5.50% b). 3.50% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 3.50% & 0.50% trail (qtrly starting in month 12) Ages 81-85 a). 3.50% b). 2.00% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 2.00% & 0.50% trail (qtrly starting in month 12) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 18 AR066976 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 80 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Athene Annuity & Life Assurance ATHENE Performance Elite Ages 0-70 a). 7.50% b). 5.50% & 0.50% trail c). 3.50% & 1.00% trail Ages 71-75 a). 6.50% b). 4.50% & 0.50% trail c). 2.50% & 1.00% trail Ages 76-80 a). 4.50% b). 2.50% & 0.50% trail c). 1.50% & 1.00% trail ATHENE Performance Elite 10 Ages 0-70 a). 7.50% b). 5.50% & 0.50% trail c). 3.50% & 1.00% trail Ages 71-75 a). 6.50% b). 4.50% & 0.50% trail c). 2.50% & 1.00% trail Ages 76-80 a). 4.50% b). 2.50% & 0.50% trail c). 1.50% & 1.00% trail ATHENE Performance Elite 10 Ages 0-70 Plus a). 7.50% b). 5.50% & 0.50% trail c). 3.50% & 1.00% trail Ages 71-75 a). 6.50% b). 4.50% & 0.50% trail c). 2.50% & 1.00% trail Ages 76-80 a). 4.50% b). 2.50% & 0.50% trail c). 1.50% & 1.00% trail ATHENE Performance Elite 14 Ages 0-70 a). 7.50% b). 5.50% & 0.50% trail c). 3.50% & 1.00% trail Ages 71-75 a). 6.50% b). 4.50% & 0.50% trail c). 2.50% & 1.00% trail Ages 76-80 a). 4.50% b). 2.50% & 0.50% trail c). 1.50% & 1.00% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 19 AR066977 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 81 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Athene Annuity & Life Assurance ATHENE Performance Elite 14 Ages 0-70 Plus a). 7.50% b). 5.50% & 0.50% trail c). 3.50% & 1.00% trail Ages 71-75 a). 6.50% b). 4.50% & 0.50% trail c). 2.50% & 1.00% trail Ages 76-80 a). 4.50% b). 2.50% & 0.50% trail c). 1.50% & 1.00% trail ATHENE Performance Elite Plus Ages 0-70 a). 7.50% b). 5.50% & 0.50% trail c). 3.50% & 1.00% trail Ages 71-75 a). 6.50% b). 4.50% & 0.50% trail c). 2.50% & 1.00% trail Ages 76-80 a). 4.50% b). 2.50% & 0.50% trail c). 1.50% & 1.00% trail Choice 10 Ages 0-75 a). 7.00% b). 5.00% & 0.40% trail Ages 76-80 a). 4.00% b). 2.00% & 0.40% trail Enhanced Choice 8 Ages 0-75 a). 5.50% b). 4.50% & 0.20% trail Ages 76-80 a). 2.50% b). 1.50% & 0.20% trail Enhanced Choice 12 Ages 0-75 a). 7.00% b). 5.00% & 0.40% trail Ages 76-80 a). 4.00% b). 2.00% & 0.40% trail Athene Annuity and Life Company BalancedChoice Annuity 8 Ages 0-75 a). 5.50% b). 2.75% & 0.50% trail (qtrly end of 5th qtr) Ages 76-80 a). 4.00% b). 1.25% & 0.50% trail (qtrly end of 5th qtr) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 20 AR066978 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 82 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Athene Annuity and Life Company BalancedChoice Annuity 10FL All Ages a). 7.00% b). 3.75% & 0.45% trail (qtrly end of 5th qt BalancedChoice Annuity 10S Ages 0-75 a). 6.50% b). 3.25% & 0.45% trail (qtrly end of 5th qtr) Ages 76-80 a). 5.00% b). 1.75% & 0.45% trail (qtrly end of 5th qtr) BalancedChoice Annuity 12 All Ages a). 7.50% b). 3.75% & 0.50% trail (qtrly end of 5th qtr) Benefit 10 Year One Ages 0-75 Ages 76-80 a). 6.00% a). 3.50% b). 3.00% & 0.25% trail b). 1.75% & 0.25% trail Year Two - Three a). 1.00% a). 1.00% Income Preferred Bonus Ages 0-75 Ages 76-78 a). 7.00% a). 5.00% b). 3.75% & 0.75% trail b). 2.75% & 0.50% trail Income Preferred Ten Ages 0-75 Ages 76-78 a). 7.00% a). 5.00% b). 3.75% & 0.75% trail b). 2.75% & 0.50% trail TargetHorizon 5 Ages 0-75 Ages 76-78 3.00% 2.00% TargetHorizon 10 Ages 0-75 a). 7.00% b). 1.15% & 0.90% trail (in years 2-10) Ages 76-78 a). 5.00% b). 1.15% & 0.90% trail (in years 2-10) TargetHorizon 10 Select Ages 56-75 a). 7.00% b). 1.15% & 0.90% trail (in years 2-10) Ages 76-78 a). 5.00% b). 1.15% & 0.90% trail (in years 2-10) TargetHorizon 15 All Ages 7.50% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 21 AR066979 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 83 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Bankers Life & Casualty Security Builder GrowthPoint All Ages 3.25% Sec. Builder Premium Bonus IA All Ages 3.25% Eagle Life Insurance Company Eagle Select 6 Ages 0-75 a). 4.50% b). 2.00% & 0.35% trail c). 1.00% & 0.55% trail Ages 76-80 a). 3.35% b). 1.50% & 0.35% trail c). 0.75% & 0.55% trail Eagle Select 8 Ages 0-75 a). 5.50% b). 3.00% & 0.35% trail c). 1.00% & 0.75% trail Ages 76-80 a). 4.10% b). 2.25% & 0.35% trail c). 0.75% & 0.75% trail Eagle Select 10 Ages 0-75 a). 7.06% b). 4.00% & 0.35% trail c). 1.00% & 0.75% trail Ages 76-80 a). 4.85% b). 3.00% & 0.35% trail c). 0.75% & 0.75% trail EquiTrust Life Insurance Company Builder Bonus Index All Ages 6.00% MarketBooster Index All Ages 6.00% MarketPower Bonus Index All Ages 8.50% MarketTen Bonus Index All Ages 6.00% MarketTwelve Bonus Index All Ages 8.50% MarketValue Index All Ages 6.50% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 22 AR066980 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 84 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Farm Bureau Life Insurance Co. Income Guard Indexed Annuity Ages 0-80 81-85 4.00% 3.00% Fidelity & Guaranty Life AdvanceMark Ultra 10 Ages 0-75 76-80 81-85 7.50% 5.50% 4.00% AdvanceMark Ultra 10 LT Ages 0-75 76-80 81-85 5.75% 4.00% 3.13% AdvanceMark Ultra 14 Ages 0-75 76-80 81-85 8.50% 5.50% 4.50% FG AccumulatorPlus 10 Ages 0-75 76-85 6.50% 3.50% FG AccumulatorPlus 14 Ages 0-75 76-80 7.50% 4.00% FG Index-Choice 10 Ages 0-80 81-85 8.50% 4.25% Income and WealthBuilder 7 Ages 0-75 a). 5.00% b). 2.25% & 0.50% trail Ages 76-80 a). 3.75% b). 1.69% & 0.50% trail Ages 81-85 a). 2.50% b). 1.13% & 0.50% trail Income and WealthBuilder 10 Ages 0-75 a). 7.00% b). 4.00% & 0.50% trail c). 2.00% & 0.85% trail d). 1.00% & 1.00% trail Ages 76-80 a). 5.25% b). 3.00% & 0.50% trail c). 1.50% & 0.85% trail d). 0.75% & 1.00% trail Ages 81-85 a). 3.50% b). 2.00% & 0.50% trail c). 1.00% & 0.85% trail d). 0.50% & 1.00% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 23 AR066981 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 85 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Fidelity & Guaranty Life LegendMark 10 Ages 0-75 76-80 81-85 7.00% 5.25% 3.75% LegendMark 10 LT Ages 0-75 76-80 81-85 6.50% 5.00% 3.50% LegendMark 10 LT Plus Ages 0-75 76-80 81-85 6.50% 5.00% 3.50% LegendMark 10 Plus Ages 0-75 76-80 81-85 7.00% 5.25% 3.75% LegendMark 14 Ages 0-75 76-80 81-85 8.00% 6.00% 4.25% LegendMark 14 Plus Ages 0-75 76-80 81-85 8.00% 6.00% 4.25% Performance Pro Ages 0-75 76-80 7.50% 6.00% Prosperity Elite 7 Ages 0-75 76-80 81-85 4.50% 2.50% 2.00% Prosperity Elite 10 Ages 0-75 76-80 81-85 7.00% 5.50% 3.75% Prosperity Elite 14 Ages 0-75 76-80 81-85 8.00% 5.50% 4.25% Safe Income Plus Ages 0-75 76-80 7.25% 5.45% SpectraMark Ages 0-75 76-85 8.50% 4.25% SpectraMark LT Ages 0-75 76-85 6.75% 3.38% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 24 AR066982 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 86 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Fidelity & Guaranty of NY FGNY Index-Safety 7 Ages 0-75 76-85 3.50% 1.75% FGNY Index-Choice 10 Ages 0-75 76-85 4.00% 2.00% Forethought Life Bonus Advantage Ages 55-75 76-80 7.00% 5.00% ForeAccumulation 6-Year Ages 0-80 81-85 4.00% 2.00% ForeAccumulation 8-Year Ages 0-80 81-85 6.00% 3.00% ForeFront Index Bonus- Ages ForeSpending 55-75 76-80 7.00% 5.00% ForeFront Index Choice- Ages ForeSaving 55-75 76-80 7.00% 5.00% ForeFront Index Choice- Ages ForeSharing 55-75 76-80 7.00% 5.00% ForeFront Index Choice- Ages ForeSpending 55-75 76-80 7.00% 5.00% ForeIncome 7-Year All Ages 6.00% ForeIncome 9-Year All Ages 6.00% Forethought Index Bonus 115 Ages 0-75 76-85 8.00% 6.00% Forethought Income 150+ Ages 55-75 76-80 7.00% 5.00% Forethought Income 125+ Ages 0-75 76-85 7.00% 5.00% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 25 AR066983 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 87 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Genworth Life & Annuity Ins. Co. SecureLiving Growth+ Ages 0-75 a). 7.00% b). 3.50% & 0.50% trail c). 2.00% & 1.00% trail 76-80 a). 5.00% b). 2.25% & 0.50% trail c). 1.00% & 1.00% trail SecureLiving Index 5 Ages 0-75 76-80 81-85 3.00% 2.00% 1.00% . SecureLiving Index 7 Ages 0-75 a). 4.50% b). 1.75% & 0.50% trail 76-80 a). 3.00% b). 1.25% & 0.50% trail 81-85 a). 1.50% b). 0.75% & 0.50% trail SecureLiving Index 10 Plus Ages 0-75 a). 7.00% b). 3.50% & 0.50% trail 76-80 a). 5.00% b). 2.25% & 0.50% trail Great American Life American Custom 10 Ages 0-75 a). 6.00% b). 4.25% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 4.25% & 0.50% trail (qtrly starting in month 12) d). 1.00% & 1.00% trail (qtrly starting in month 12) Ages 76-80 a). 4.50% b). 3.00% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 3.00% & 0.50% trail (qtrly starting in month 12) d). 1.00% & 1.00% trail (qtrly starting in month 12) Ages 81-85 a). 2.50% b). 1.00% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 1.25% & 0.50% trail (qtrly starting in month 12) d). 1.00% & 1.00% trail (qtrly starting in month 12) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 26 AR066984 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 88 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Great American Life American Legend III Ages 0-75 a). 4.75% b). 3.25% & 1.50% trail (in year 2) & 1.00% trail (in year 3) c). 2.50% & 0.50% trail (qtrly starting in month 12) d). 1.00% & 1.00% trail (qtrly starting in month 12) Ages 76-80 a). 3.25% b). 2.50% & 1.50% trail (in year 2) & 1.00% trail (in year 3) c). 2.00% & 0.50% trail (qtrly starting in month 12) d). 1.00% & 1.00% trail (qtrly starting in month 12) Ages 81-85 a). 2.25% b). 1.00% & 1.50% trail (in year 2) & 1.00% trail (in year 3) c). 1.50% & 0.50% trail (qtrly starting in month 12) d). 1.00% & 1.00% trail (qtrly starting in month 12) American Valor 10 Ages 0-75 a). 5.00% b). 3.75% & 0.50% trail (qtrly starting in month 1) c). 1.15% & 1.15% trail (qtrly starting in month 12) Ages 76-80 a). 3.65% b). 2.50% & 0.50% trail (qtrly starting in month 1) c). 1.15% & 1.15% trail (qtrly starting in month 12) Ages 81-85 a). 1.65% b). 1.25% & 0.50% trail (qtrly starting in month 1) c). 1.15% & 1.15% trail (qtrly starting in month 12) Safe Outlook Ages 0-75 a). 3.50% b). 2.00% & 1.50% trail (in year 2) & 0.75% trail (in year 3) c). 2.50% & 0.40% trail (qtrly starting in month 12) Ages 76-80 a). 2.60% b). 1.50% & 1.50% trail (in year 2) & 0.75% trail (in year 3) c). 2.00% & 0.40% trail (qtrly starting in month 12) Ages 81-85 a). 1.70% b). 0.50% & 1.50% trail (in year 2) & 0.75% trail (in year 3) c). 0.75% & 0.40% trail (qtrly starting in month 12) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 27 AR066985 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 89 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Great American Life Safe Return Ages 0-75 a). 5.50% b). 4.75% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 4.75% & 0.50% trail (qtrly in months 1+) d). 1.25% & 1.25% trail (qtrly starting in month 12) Ages 76-80 a). 4.50% b). 3.75% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 4.00% & 0.50% trail (qtrly in months 1+) d). 1.25% & 1.25% trail (qtrly starting in month 12) Ages 81-85 a). 1.50% b). 1.25% & 2.00% trail (in year 2) & 1.00% trail (in year 3) c). 1.25% & 0.50% trail (qtrly in months 1+) d). 1.25% & 1.25% trail (qtrly starting in month 12) Greenfields Life Insurance Co. Income Guard Indexed Annuity Ages 0-80 81-85 4.00% 3.00% Guggenheim Life & Annuity Preserve Plus 3-Year All Ages 1.50% Preserve Plus 5-Year All Ages 2.50% Preserve Plus 7-Year All Ages 3.00% Horace Mann Destination FIA 6-Year All Ages 6.50% Destination FIA 9-Year All Ages 6.50% Integrity Life Insurance Company Indextra FIA 7-Year Ages 18-75 a). 5.25% b). 2.75% & 0.50% trail Ages 76-85 a). 4.25% b). 2.00% & 0.50% trail Indextra FIA 10-Year Ages 18-75 a). 6.50% b). 3.50% & 0.50% trail Ages 76-85 a). 5.00% b). 2.50% & 0.50% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 28 AR066986 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 90 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Jackson National Life Elite Choice 8-Year Ages 0-78 a). 5.00% b). 4.00% & 0.25% trail c). 1.50% & 0.75% trail Ages 79-82 a). 2.50% b). 1.50% & 0.25% trail c). 0.50% & 0.50% trail Elite Choice 10-Year Ages 0-78 a). 6.00% b). 4.75% & 0.25% trail c). 1.75% & 0.75% trail Ages 79-80 a). 3.00% b). 1.75% & 0.25% trail c). 0.50% & 0.50% trail Elite Choice Rewards 8-Year Ages 0-78 a). 5.00% b). 4.00% & 0.25% trail c). 1.50% & 0.75% trail Ages 79-82 a). 2.50% b). 1.50% & 0.25% trail c). 0.50% & 0.50% trail Elite Choice Rewards 10-Year Ages 0-78 a). 6.00% b). 4.75% & 0.25% trail c). 1.75% & 0.75% trail Ages 79-80 a). 3.00% b). 1.75% & 0.25% trail c). 0.50% & 0.50% trail JNL AscenderPlus Select 7-Year Ages 0-80 a). 4.00% b). 2.00% & 0.50% trail c). 0.75% & 0.75% trail Ages 81-88 a). 1.50% b). 0.50% & 0.25% trail c). 0.50% & 0.25% trail JNL AscenderPlus Select 10-Year Ages 0-80 a). 7.00% b). 4.00% & 0.50% trail c). 0.85% & 0.85% trail Ages 81-85 a). 3.00% b). 1.50% & 0.25% trail c). 0.50% & 0.50% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 29 AR066987 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 91 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Jackson National Life JNL Select Annual Reset 7-Year Ages 0-80 a). 5.00% b). 3.00% & 0.50% trail c). 0.95% & 0.95% trail Ages 81-90 a). 2.50% b). 1.50% & 0.25% trail c). 0.50% & 0.50% trail Lafayette Life Marquis Centennial 7 Ages 0-70 71-80 81-85 5.00% 4.00% 3.00% Marquis Centennial 10 Ages 0-70 71-80 81-85 8.00% 7.00% 5.00% Life Insurance Co. of the SW Lone Star SecurePlus Elite Ages 0-55 56-60 61-70 12.00% 9.50% 7.00% SecurePlus Elite Ages 0-55 a). 12.00% b). 7.00% & 0.90% trail Ages 56-60 a). 9.50% b). 4.50% & 0.90% trail Ages 61-70 a). 7.00% b). 2.50% & 0.90% trail SecurePlus Elite 3 All Ages a). 8.00% b). 4.00% & 0.90% trail SecurePlus Elite 5 All Ages a). 11.00% b). 7.00% & 0.90% trail SecurePlus Gold Ages 0-75 a). 7.00% b). 2.50% & 0.90% trail Ages 76-80 a). 5.00% b). 1.50% & 0.90% trail Ages 81-85 a). 3.00% b). 0.75% & 0.90% trail SecurePlus Marquee 3 Ages 40-75 76-80 81-85 7.00% 5.00% 3.50% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 30 AR066988 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 92 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Life Insurance Co. of the SW SecurePlus Marquee 8 Ages 40-75 76-80 7.00% 5.00% SecurePlus Paramount 5 Ages 0-75 a). 7.00% b). 2.50% & 0.90% trail Ages 76-80 a). 5.00% b). 1.50% & 0.90% trail SecurePlus Platinum Ages 0-65 66-70 71-75 11.00% 9.50% 8.00% 76-80 7.00% SecurePlus Preferred 2 Ages 40-75 76-80 81-85 7.00% 5.00% 3.50% SecurePlus Preferred 6 Ages 40-75 76-80 7.00% 5.00% SecurePlus Reliance Ages 0-50 51-75 76-80 7.00% 6.50% 5.00% 81-85 3.00% Lincoln Life & Annuity Co. of NY OptiChoice NY 5 Ages 0-75 a). 5.00% b). 4.25% & 0.25% trail c). 3.50% & 0.50% trail Ages 76-80 a). 3.75% b). 3.00% & 0.25% trail c). 2.25 % & 0.50% trail Ages 81-85 a). 2.50% b). 1.75% & 0.25% trail c). 1.00% & 0.50% trail OptiChoice NY 7 Ages 0-75 a). 6.00% b). 4.75% & 0.25% trail c). 3.50% & 0.50% trail Ages 76-80 a). 4.50% b). 3.25% & 0.25% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 31 AR066989 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 93 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Lincoln Life & Annuity Co. of NY OptiChoice NY 7 Ages 81-85 a). 3.30% b). 1.75% & 0.25% trail OptiChoice NY 9 Ages 0-75 a). 6.00% b). 5.50% & 0.25% trail c). 4.00% & 0.50% trail Ages 76-80 a). 4.50% b). 2.235% & 0.25% trail Ages 81-85 a). 3.30% Lincoln National Life New Directions 6 Ages 0-75 a). 3.50% b). 2.50% & 0.25% trail Ages 76-80 a). 2.75% Ages 81-85 a). 1.75% New Directions 8 Ages 0-75 a). 4.50% b). 3.25% & 0.25% trail Ages 76-80 a). 3.50% b). 2.25% & 0.25% trail Ages 81-85 a). 2.25% OptiChoice 5 Ages 0-74 a). 3.50% b). 2.90% & 0.20% trail Ages 75-79 a). 2.60% b). 2.00% & 0.20% trail Ages 80-84 a). 1.70% Ages 85 a). 0.75% OptiChoice 7 Ages 0-74 a). 4.10% b). 3.30% & 0.20% trail c). 2.50% & 0.40% trail Ages 75-79 a). 3.00% b). 2.20% & 0.20% trail Ages 80-84 a). 2.00% b). 1.20% & 0.20% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 32 AR066990 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 94 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Lincoln National Life OptiChoice 7 Ages 85 a). 0.75% OptiChoice 9 Ages 0-74 a). 4.75% b). 3.75% & 0.20% trail c). 2.75% & 0.40% trail Ages 75-79 a). 3.40% b). 2.40% & 0.20% trail Ages 80+ c). 2.05% Midland National Life OptiPoint 8 Ages 0-74 a). 5.00% b). 3.75% & 0.25% trail c). 2.50% & 0.50% trail Ages 75-79 a). 3.25% b). 2.00% & 0.25% trail Ages 80-84 a). 1.75% Ages 85+ a). 0.75% OptiPoint 10 Ages 0-74 a). 6.00% b). 4.50% & 0.25% trail c). 3.00% & 0.50% trail Ages 75-79 a). 3.95% b). 2.45% & 0.25% trail Ages 80+ a). 1.75% Capstone 10-Yr , Ages 0-75 Innovator Choice 10-Yr, a). 7.50% Paragon Plus 10-Yr & b). 5.50% & 0.50% trail Prosperity Choice 10-Yr c). 3.00% & 1.00% trail Ages 76-79 a). 5.625% b). 4.125% & 0.50% trail c). 2.25% & 1.00% trail Capstone 14-Yr, All Ages Innovator Choice 14-Yr, a). 8.00% Paragon Plus 14-Yr & b). 6.00% & 0.50% trail Prosperity Choice 14-Yr c). 3.50% & 1.00% trail LiveWell Fixed Index Annuity Ages 0-80 5.00% Ages 81-85 2.50% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 33 AR066991 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 95 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Midland National Life Mainstreet Four Ages 0-75 3.00% Ages 76-80 2.25% Ages 81-85 1.50% MNL Endeavor 4 Ages 0-75 a). 3.00% b). 0.50% & 0.50% trail Ages 76-79 a). 2.25% b). 0.375% & 0.50% trail Ages 80-85 a). 1.50% b). 0.25% & 0.50% trail MNL Endeavor 6 Ages 0-75 a). 4.00% b). 2.50% & 0.25% trail c). 1.00% & 0.50% trail Ages 76-79 a). 3.00% b). 1.875% & 0.25% trail c). 0.75% & 0.50% trail Ages 80-85 a). 2.00% b). 1.25% & 0.25% trail c). 0.50% & 0.50% trail MNL Endeavor 8 & Ages 0-75 MNL Endeavor 8 Plus a). 6.00% b). 3.00% & 0.50% trail c). 1.00% & 1.00% trail Ages 76-79 a). 4.50% b). 2.25% & 0.50% trail c). 0.75% & 1.00% trail Ages 80-85 a). 3.00% b). 1.50% & 0.50% trail c). 0.50% & 1.00% trail MNL Endeavor 12 & All Ages MNL Endeavor 12 Plus a). 7.00% b). 4.00% & 0.50% trail c). 2.50% & 1.00% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 34 AR066992 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 96 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Midland National Life MNL IncomeVantage 10 Ages 40-75 a). 7.50% b). 5.00% & 0.50% trail c). 4.00% & 1.00% trail Ages 76-79 a). 5.625% b). 3.75% & 0.50% trail c). 3.00% & 1.00% trail MNL IncomeVantage 14 All Ages a). 8.00% b). 5.50% & 0.50% trail c). 4.00% & 1.00% trail MNL Pinnacle Ages 0-75 a). 6.00% b). 3.00% & 0.50% trail c). 3.00% & 0.50% trail Ages 76-79 a). 4.50% b). 2.25% & 0.50% trail c). 2.25% & 0.50% trail MNL Prosper 5 Ages 0-75 76-80 81-85 4.00% 3.00% 2.00% MNL Prosper 7 Ages 0-75 76-80 81-85 5.00% 3.75% 2.50% MNL Prosper 10 Ages 0-75 76-80 81-85 5.00% 3.75% 2.50% MNL RetireVantage 10 Ages 0-75 a). 8.00% b). 6.00% & 0.50% trail c). 3.50% & 1.00% trail Ages 76-79 a). 6.00% b). 4.50% & 0.50% trail c). 2.625% & 1.00% trail MNL RetireVantage 14 All Ages a). 9.00% b). 6.50% & 0.50% trail c). 4.00% & 1.00% trail MNL SecureVantage 10 Ages 40-75 a). 7.00% b). 4.50% & 0.50% trail c). 1.75% & 1.00% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 35 AR066993 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 97 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Midland National Life MNL SecureVantage 10 Ages 76-79 a). 5.25% b). 3.375% & 0.50% trail c). 1.3125% & 1.00% trail MNL SecureVantage 14 All Ages a). 8.00% b). 5.50% & 0.50% trail c). 2.75% & 1.00% trail Select 6 & 8-Year Ages 0-75 a). 6.00% b). 4.50% & 0.25% trail c). 3.00% & 0.50% trail Select 6 & 8-Year Ages 76-80 a). 4.50% b). 3.375% & 0.25% trail c). 2.25% & 0.50% trail Ages 81-85 a). 3.00% b). 2.25% & 0.25% trail c). 1.50% & 0.50% trail Select 10-Year Ages 0-75 a). 6.00% b). 4.25% & 0.25% trail c). 2.50% & 0.50% trail Ages 76-79 a). 4.50% b). 3.1875% & 0.25% trail c). 1.875% & 0.50% trail Select 14-Year All Ages a). 6.00% b). 4.25% & 0.25% trail c). 2.50% & 0.50% trail National Western Life Global Lookback Ages 0-75 76-80 6.50% 4.50% NWL Impact 7 Ages 0-75 76-80 81-85 5.50% 3.50% 0.00% NWL Impact 7S Ages 0-75 76-80 81-85 5.00% 3.00% 0.00% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 36 AR066994 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 98 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission National Western Life NWL Impact 10 Ages 0-75 76-80 81-85 6.50% 4.50% 0.00% NWL Impact 10 FL Ages 0-75 76-80 81-85 6.50% 4.50% 0.00% Ultra Benefit Ages 0-75 76-80 81-85 6.00% 4.00% 1.50% Ultra Classic Ages 0-75 76-80 10.00% 8.50% Ultra Future Ages 0-75 76-80 5.00% 3.00% Ultra Value Ages 0-75 76-80 5.00% 3.00% Nationwide Clear Horizon Ages 0-75 76-85 4.00% 2.00% Nationwide Life & Annuity Nationwide New Heights Ages 0-75 76-85 7.00% 4.00% North American Company Charter 10-Yr, Precision 10-Yr Ages 0-75 & Prizm Plus 10-Yr a). 6.50% b). 3.50% & 0.50% trail c). 0.75% & 1.00% trail Ages 76-79 a). 4.875% b). 2.625% & 0.50% trail c). 0.5625% & 1.00% trail Charter 14-Yr, Precision 14-Yr All Ages & Prizm Plus 14-Yr a). 7.00% b). 4.00% & 0.50% trail c). 1.25% & 1.00% trail Freedom Choice 8-Year Ages 0-75 a). 5.50% b). 4.00% & 0.25% trail c). 2.50% & 0.50% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 37 AR066995 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 99 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission North American Company Freedom Choice 8-Year Ages 76-80 a). 4.125% b). 3.00% & 0.25% trail c). 1.875% & 0.50% trail Ages 81-85 a). 2.75% b). 2.00% & 0.25% trail c). 1.25% & 0.50% trail Freedom Choice 10-Year Ages 0-75 a). 5.50% b). 3.75% & 0.25% trail c). 2.00% & 0.50% trail Ages 76-79 a). 4.125% b). 2.8125% & 0.25% trail c). 1.50% & 0.50% trail Freedom Choice 14-Year All Ages a). 5.50% b). 3.75% & 0.25% trail c). 2.00% & 0.50% trail NA Performance Choice 8 & Ages 0-75 NA Performance Choice 8 Plus a). 5.00% b). 2.00% & 0.50% trail Ages 76-79 a). 3.75% b). 1.50% & 0.50% trail Ages 80-85 a). 2.50% b). 1.00% & 0.50% trail NA Performance 12 & All Ages NA Performance Choice 12 Plus a). 6.00% b). 3.00% & 0.50% trail c). 0.25% & 1.00% trail NAC IncomeChoice 10 Ages 40-75 a). 7.00% b). 4.00% & 0.50% trail c). 1.25% & 1.00% trail Ages 76-79 a). 5.25% b). 3.00% & 0.50% trail c). 0.9375% & 1.00% trail NAC RetireChoice 10 Ages 0-75 a). 7.50% b). 4.50% & 0.50% trail c). 1.75% & 1.00% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 38 AR066996 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 100 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission North American Company NAC RetireChoice 10 Ages 76-79 a). 5.625% b). 3.375% & 0.50% trail c). 1.3125% & 1.00% trail NAC RetireChoice 14 All Ages a). 8.50% b). 5.50% & 0.50% trail c). 2.75% & 1.00% trail NAC SecureChoice 10 Ages 40-75 a). 6.00% b). 3.00% & 0.50% trail c). 0.25% & 1.00% trail Ages 76-79 a). 4.50% b). 2.25% & 0.50% trail c). 0.1875% & 1.00% trail NAC SecureChoice 14 All Ages a). 7.00% b). 4.00% & 0.50% trail c). 1.25% & 1.00% trail North American Pillar Ages 0-75 a). 4.50% b). 2.00% & 0.50% trail c). 2.00% & 0.50% trail Ages 76-79 a). 3.375% b). 1.50% & 0.50% trail c). 1.50% & 0.50% trail Ten Ages 0-75 a). 5.50% b). 2.75% & 0.50% trail Ages 76-79 a). 4.125% b). 2.0625% & 0.50% trail Oxford Life Royal Select Fixed IA Ages 18-75 76-80 6.50% 5.00% Select Fixed IA Ages 18-75 76-80 6.50% 5.00% Silver Select Fixed IA Ages 18-75 76-80 6.50% 5.00% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 39 AR066997 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 101 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission PHL Variable CommandMark Ages 0-80 81-85 7.00% 4.00% CommandMark IR Ages 0-75 76-80 81-85 4.50% 3.38% 2.25% CommandMark IR LT Ages 0-75 76-80 81-85 4.50% 3.38% 2.25% CommandMark LT Ages 0-80 81-85 6.50% 4.00% CommandMark Plus Ages 0-75 76-80 81-85 7.50% 5.63% 3.75% CommandMark Plus LT Ages 0-75 76-80 81-85 7.00% 5.25% 3.50% Index Select Gold Bonus Ages 0-75 76-80 81-85 7.25% 5.00% 3.00% Personal Protection Choice Ages 0-75 76-80 81-85 7.25% 5.00% 3.00% Phoenix Next Generation Ann. Ages 50-75 76-80 81-85 7.00% 5.00% 3.00% Phoenix Next Generation Bonus Ages Annuity 50-75 76-80 81-85 7.00% 5.00% 3.00% Phoenix Personal Income Annuity Ages 0-75 76-80 81-85 7.25% 5.00% 3.00% PHX Personal Retirement Choice Ages 0-75 76-80 7.00% 5.00% Phoenix Reflections Gold Bonus Ages 0-75 76-80 81-85 7.00% 5.00% 3.00% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 40 AR066998 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 102 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission PHL Variable Premier Lifestyle Annuity Ages 0-70 71-80 81-85 7.00% 5.00% 3.00% Secure Lifestyle Bonus Annuity Ages 0-70 71-80 81-85 7.00% 5.00% 3.00% Physicians Life Vista Index Accelerator 10-Year All Ages 7.00% Vista Index Accelerator 15-Year All Ages 9.00% Vista Index Advantage 5-Year All Ages 4.00% Vista Index Advantage 7-Year All Ages 4.75% Vista Index Advantage 10-Year All Ages 7.00% Principal Life Principal Performance Annuity 7 Ages 0-75 76-85 5.00% 3.33% Reliance Standard Keystone Index Annuity 5-Yr Ages 0-80 81-85 3.25% 1.95% Keystone Index Annuity 7-Yr Ages 0-80 81-85 4.50% 2.70% Keystone Index Annuity 10-Yr All Ages 6.00% Sagicor Life Platinum Series Sage Advantage IA Ages 0-75 76-85 4.50% 2.50% Security Benefit Life Secure Income Annuity Ages 0-75 76-80 7.00% 5.00% Total Value Annuity Ages 0-75 a). 7.00% b). 3.00% & 0.50% trail 76-80 a). 5.00% b). 1.00% & 0.50% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 41 AR066999 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 103 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Sentinel Security Life Ins. Co. Summit Bonus Index Annuity Ages 0-75 76-80 7.25% 5.00% The Standard Index Growth Annuity 5 Ages 0-80 a). 4.375% b). 2.375% & 0.40% trail c). 1.375% & 0.60% trail 81-85 a). 2.4375% b). 1.6875% & 0.25% trail 86-90 a). 2.00% b). 1.15% & 0.25% trail Index Growth Annuity 7 Ages 0-80 a). 5.375% b). 2.875% & 0.50% trail c). 1.375% & 0.75% trail 81-85 a). 2.9375% b). 2.1875% & 0.25% trail 86-90 a). 2.40% b). 1.40% & 0.25% trail Index Select Annuity 5 Ages 0-80 a). 3.375% b). 2.125% & 0.30% trail c). 1.375% & 0.45% trail 81-85 a). 1.6875% b). 1.1875% & 0.25% trail 86-90 a). 1.50% b). 0.65% & 0.25% trail Index Select Annuity 7 Ages 0-80 a). 4.375% b). 2.375% & 0.45% trail c). 1.375% & 0.65% trail 81-85 a). 2.1875% b). 1.6875% & 0.25% trail 86-90 a). 1.60% b). 0.90% & 0.25% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 42 AR067000 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 104 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission The Standard Index Select Annuity 10 All Ages a). 5.375% b). 2.875% & 0.50% trail c). 1.375% & 0.80% trail Symetra Financial Edge Pro FIA 5-Year Ages 0-75 76-85 86-90 3.50% 2.00% 1.00% Edge Pro FIA 7-Year Ages 0-75 76-85 86-90 4.50% 2.50% 1.00% Voya Insurance and Annuity Co. Voya Secure Index Five Ages 0-75 a). 3.15% b). 2.02% & 0.22% trail c). 0.90% & 0.45% trail Ages 76-80 a). 2.36% b). 1.51% & 0.16% trail c). 0.67% & 0.33% trail Voya Secure Index Opportunities Ages 0-75 Plus a). 6.30% b). 4.95% & 0.20% trail c). 2.70% & 0.60% trail d). 2.25% & 0.68% trail Ages 76-80 a). 4.75% b). 3.75% & 0.16% trail c). 2.05% & 0.44% trail d). 1.70% & 0.48% trail Voya Secure Index Outlook Ages 0-75 a). 6.00% b). 4.50% & 0.25% trail c). 2.00% & 0.66% trail Ages 76-80 a). 4.50% b). 3.37% & 0.18% trail c). 1.50% & 0.49% trail Voya Secure Index Seven Ages 0-75 a). 4.00% b). 3.60% & 0.08% trail c). 3.00% & 0.20% trail d). 1.00% & 0.60% trail Ages 76-80 a). 3.00% b). 2.70% & 0.08% trail c). 2.25% & 0.16% trail d). 0.75% & 0.44% trail Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 43 AR067001 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 105 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Agent Level Commission Voya Insurance and Annuity Co. Voya Wealth Builder Eight Ages 0-75 a). 4.00% b). 3.50% & 0.08% trail c). 2.60% & 0.24% trail d). 0.65% & 0.64% trail Ages 76-80 a). 3.00% b). 2.65% & 0.04% trail c). 1.95% & 0.16% trail d). 0.50% & 0.48% trail Voya Wealth Builder Six Ages 0-75 a). 2.25% b). 1.85% & 0.08% trail c). 1.30% & 0.20% trail Ages 76-80 a). 1.70% b). 1.40% & 0.04% trail c). 1.00% & 0.16% trail Washington National Patriot All Ages 5.25% Crediting Methods We have created four broad categories: Point-to-Point Variations, Averaging Variations, Fixed and Other Variations. The Point-to-Point category includes the following structures: Term End Point, Three- Year Point-to-Point, Two-Year Point-to-Point, Annual Point-to-Point, Annual Point-to-Point with Multiple Indices, Annual Point-to-Point with High Water Feature, and Inverse Annual Point-to-Point. The Averaging category includes the following structures: Monthly Point-to-Point and Quarterly Point- to-Point (as these crediting methods have no monthly/quarterly downside caps, and thus average growth), Monthly Point-to-Point with High Water Feature, Two-Year Monthly Averaging, Monthly Averaging, Monthly Averaging with Multiple Indices, Rolling Monthly Averaging, and Daily Averaging. The Fixed category includes the following structures: Gain Triggered, Fixed with Multi- Year Guarantee, Fixed with an Equity Kicker, and Fixed. Company Product Crediting Methods Utilized Allianz Life Allianz 360 Annuity, Annual Point-to-Point (4) Allianz 365i Annuity & Annual Point-to-Point with Multiple Indices Allianz 222 Annuity Monthly Averaging with Multiple Indices Monthly Point-to-Point (3) Fixed Allianz Core Income 7 Annuity Annual Point-to-Point (4) Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 44 AR067002 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 106 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Allianz Life Allianz Signature 7 Annuity Annual Point-to-Point (3) Monthly Point-to-Point (2) Fixed Endurance Plus Annual Point-to-Point (3) Annual Point-to-Point with Multiple Indices Monthly Averaging with Multiple Indices Monthly Point-to-Point (3) Fixed Essential Income 7 Annual Point-to-Point (2) Fixed MasterDex X Annual Point-to-Point (3) Annual Point-to-Point with Multiple Indices Monthly Averaging with Multiple Indices Monthly Point-to-Point (3) Fixed American Equity Investment Life Advantage Gold Annual Point-to-Point (4) Inverse Annual Point-to-Point Monthly Averaging (2) Monthly Point-to-Point Performance Triggered Fixed Benefit Gold Annual Point-to-Point (4) Inverse Annual Point-to-Point Monthly Averaging (2) Monthly Point–to-Point Performance Triggered Fixed Bonus Gold Annual Point-to-Point (5) Inverse Annual Point-to-Point Monthly Averaging (3) Monthly Point-to-Point Performance Triggered Fixed CT Gold Annual Point-to-Point (4) Inverse Annual Point-to-Point Monthly Averaging (2) Monthly Point-to-Point Performance Triggered Fixed Foundation Gold Annual Point-to-Point (4) Inverse Annual Point-to-Point Monthly Averaging (2) Monthly Point-to-Point Performance Triggered Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 45 AR067003 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 107 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized American Equity Investment Life Heritage Gold Annual Point-to-Point Fixed Integrity Gold Annual Point-to-Point (4) Inverse Annual Point-to-Point Monthly Averaging (3) Monthly Point-to-Point Performance Triggered Fixed Retirement Gold Annual Point-to-Point (3) Inverse Annual Point-to-Point Monthly Averaging (2) Monthly Point-to-Point Performance Triggered Fixed Traditions Gold Annual Point-to-Point (4) Inverse Annual Point-to-Point Monthly Averaging (2) Monthly Point-to-Point Performance Triggered Fixed American General Life AG Choice Index 10 Annuity Annual Point-to-Point Monthly Averaging Monthly Point-to-Point Fixed Power Advantage 7 Annual Point-to-Point Power Advantage 10 Monthly Averaging Monthly Point-to-Point Fixed Power Index Plus Annuity Annual Point-to-Point (2) Power Select Builder Two-Year Point-to-Point Monthly Averaging Monthly Point-to-Point Fixed Power Index Plus Income Annuity Annual Point-to-Point Power Select Plus Income Monthly Averaging Monthly Point-to-Point Fixed Power 7 Protector, Annual Point-to-Point Power 7 Protector Plus Income, Monthly Averaging Power 10 Protector & Monthly Point-to-Point Power 10 Protector Plus Income Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 46 AR067004 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 108 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized American General Life Power Index 5 Plus Annuity Annual Point-to-Point Power Index 7 Plus Annuity Monthly Averaging Fixed Power Index Choice Annuity 7-Yr Annual Point-to-Point American National Life Strategy Indexed Annuity Plus 7 & Annual Point-to-Point Strategy Indexed Annuity Plus 10 Term End Point (5) Monthly Averaging Performance Triggered Fixed Value-Lock 10 Rolling Monthly Averaging with Highwater Mark Feature American United Life Freedom Builder 5, Annual Point-to-Point (2) Freedom Builder 7 & Monthly Averaging (2) Freedom Builder 9 Fixed Americo Future Provider & Annual Point-to-Point (3) Future Provider Bonus Monthly Averaging Performance Triggered Fixed LibertyMark 7, Annual Point-to-Point (2) Liberty Mark 10, Inverse Annual Point-to-Point LibertyMark 10 Plus, Two-Year Point-to-Point (2) LibertyMark 10 LT & Monthly Averaging LibertyMark 10 LT Plus Three Year Monthly Averaging with Multiple Indices Fixed Ultimate One Index 7, Annual Point-to-Point (2) Ultimate One Index 9 & Monthly Averaging (2) Ultimate One Index 9 Bonus Fixed Ameritas Life Compass Index Annuity Annual Point-to-Point (3) Monthly Averaging (3) Fixed Annuity Investors Life FlexMax, FlexMax 14, Annual Point-to-Point FlexMax Plus & SingleMax 10 Monthly Averaging Fixed Athene Annuity & Life Assurance ATHENE Performance Elite Annual Point-to-Point Two-Year Point-to-Point (2) Monthly Point-to-Point (2) Fixed ATHENE Performance Elite 10 Annual Point-to-Point Two-Year Point-to-Point (2) Monthly Point-to-Point (2) Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 47 AR067005 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 109 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Athene Annuity & Life Assurance ATHENE Performance Elite 10 Annual Point-to-Point Two-Year Point-to-Point (2) Monthly Point-to-Point (2) Fixed ATHENE Performance Elite 14 Annual Point-to-Point Two-Year Point-to-Point (2) Monthly Point-to-Point (2) Fixed ATHENE Performance Elite 14 Annual Point-to-Point Two-Year Point-to-Point (2) Monthly Point-to-Point (2) Fixed ATHENE Performance Elite Plus Annual Point-to-Point Two-Year Point-to-Point (2) Monthly Point-to-Point (2) Fixed Choice 10 Annual Point-to-Point Quarterly Point-to-Point Monthly Averaging Monthly Point-to-Point Fixed Enhanced Choice 8 & Annual Point-to-Point Enhanced Choice 12 Quarterly Point-to-Point Monthly Averaging Monthly Point-to-Point Fixed Athene Annuity and Life Company BCA 8, 10FL, 10S & 12 Declared Rate/Blended Strategy (4) Benefit 10 Annual Point-to-Point Monthly Point-to-Point Fixed Income Preferred Bonus Annual Point-to-Point Monthly Averaging Monthly Point-to-Point Fixed Income Preferred Ten Annual Point-to-Point Monthly Averaging Monthly Point-to-Point Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 48 AR067006 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 110 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Athene Annuity and Life Company TargetHorizon 5, Annual Point-to-Point (2) TargetHorizon 10, Annual Point-to-Point with Multiple Indices TargetHorizon 10 Select & Monthly Averaging TargetHorizon 15 Monthly Point-to-Point Term End Point Fixed Bankers Life & Casualty Sec. Bldr. Premium Bonus IA Monthly Averaging Fixed Security Builder GrowthPoint Annual Point-to-Point Fixed CUNA Mutual Life MEMBERS IA 5, 7 & 10- Year Annual Point-to-Point Eagle Life Insurance Company Eagle Select 6, Annual Point-to-Point (4) Eagle Select 8 & Inverse Annual Point-to-Point Eagle Select 10 Monthly Point-to-Point Performance Triggered Fixed EquiTrust Life Insurance Company Builder Bonus Index Annual Point-to-Point Monthly Averaging (2) Daily Averaging Monthly Point-to-Point Fixed MarketBooster Index Annual Point-to-Point Monthly Averaging Daily Averaging Monthly Point-to-Point Fixed MarketPower Bonus Index, Annual Point-to-Point MarketTwelve Bonus Index & Monthly Averaging (2) MarketTen Bonus Index Daily Averaging Monthly Point-to-Point Fixed MarketValue Index Annual Point-to-Point Monthly Averaging (3) Monthly Point-to-Point Fixed Farm Bureau Life Insurance Co. Income Guard Indexed Annuity Annual Point-to-Point Monthly Averaging Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 49 AR067007 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 111 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Fidelity & Guaranty Life AdvanceMark Ultra 10, Annual Point-to-Point AdvanceMark Ultra 10 LT & Monthly Averaging AdvanceMark Ultra 14 Three Year Monthly Averaging Monthly Point-to-Point Performance Triggered Fixed FG AccumulatorPlus 10 & Annual Point-to-Point FG AccumulatorPlus 14 Monthly Averaging Monthly Point-to-Point Performance Triggered Fixed FG Index-Choice 10 Annual Point-to-Point Two-Year Point-to-Point Monthly Averaging Term End Point Monthly Point-to-Point Performance Triggered Fixed Income and Wealth Builder 7 & Annual Point-to-Point Income and Wealth Builder 10 Monthly Averaging Monthly Point-to-Point Performance Triggered Fixed LegendMark 10, LegendMark 10 Annual Point-to-Point LT, LegendMark 10 LT Plus, Monthly Point-to-Point LegendMark 10 Plus, LegendMark Performance Triggered 14 & LegendMark 14 Plus Fixed Performance Pro Annual Point-to-Point (2) Two-Year Point-to-Point Term End Point (2) Monthly Point-to-Point Fixed Prosperity Elite 7, Annual Point-to-Point (2) Prosperity Elite 10 & Monthly Averaging Prosperity Elite 14 Monthly Point-to-Point Performance Triggered Fixed Safe Income Plus Annual Point-to-Point Monthly Averaging Monthly Point-to-Point Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 50 AR067008 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 112 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Fidelity & Guaranty Life SpectraMark & Annual Point-to-Point SpectraMark LT Annual Point-to-Point w/ 3-Yr Highwater Feature Monthly Averaging Three-Year Monthly Averaging Monthly Point-to-Point Performance Triggered Fixed Fidelity & Guaranty Life of NY FGNY Index-Safety 7 & Annual Point-to-Point FGNY Index-Choice 10 Monthly Averaging Monthly Point-to-Point Fixed Forethought Life Bonus Advantage Annual Point-to-Point Monthly averaging Monthly Point-to-Point Fixed Forethought Life ForeAccumulation 6-Year & Annual Point-to-Point ForeAccumulation 8-Year Term End Point Monthly Point-to-Point Fixed ForeFront Index Bonus & Annual Point-to-Point ForeFront Index Choice Series Monthly averaging Monthly Point-to-Point Fixed ForeIncome 7-Year & Annual Point-to-Point ForeIncome 9-Year Term End Point Monthly Point-to-Point Fixed Forethought Income 125+ Annual Point-to-Point Monthly Point-to-Point Fixed Forethought Income 150+ Annual Point-to-Point Term End Point Monthly Point-to-Point Fixed Index Bonus 115 Annual Point-to-Point Monthly Point-to-Point Fixed Genworth Life & Annuity Ins. Co. SecureLiving Growth+ Annual Point-to-Point Monthly Point-to-Point Performance Triggered Modified Performance Triggered Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 51 AR067009 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 113 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Genworth Life & Annuity Ins. Co. SecureLiving Index 5, Annual Point-to-Point SecureLiving Index 7 & Monthly Point-to-Point SecureLiving Index 10 Plus Performance Triggered Fixed Great American Life American Custom 10 Annual Point-to-Point (3) Fixed American Freedom Liberty 6 & Annual Point-to-Point (2) American Freedom Liberty 8 Fixed American Legend III Annual Point-to-Point (2) Term End Point Monthly Point-to-Point Fixed American Valor 10 & Annual Point-to-Point Assurance Select 7 Monthly Averaging Fixed AssuranceProtect 6 Annual Point-to-Point Fixed Safe Outlook & Annual Point-to-Point Safe Return Monthly Averaging Fixed Greenfields Life Insurance Co. Income Guard Indexed Annuity Annual Point-to-Point Monthly Averaging Fixed Guggenheim Life & Annuity Preserve Plus 3-Year, Term End Point Preserve Plus 5-Year & Fixed with Multi-Year Guarantee Preserve Plus 7-Year Horace Mann Destination FIA 6-Year & Annual Point-to-Point Destination FIA 9-Year Monthly Averaging Fixed Integrity Life Insurance Company Indextra FIA 7-Year Annual Point-to-Point Indextra FIA 10-Year Monthly Averaging Term End Point Fixed Jackson National Life Elite Choice Series & Monthly Averaging (2) Elite Choice Rewards Series Two-Year Point-to-Point (2) Monthly Point-to-Point (2) Jackson AscenderPlus Select Annual Point-to-Point (2) 7-Yr & 10-Yr Monthly Averaging (2) Monthly Point-to-Point (2) Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 52 AR067010 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 114 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Jackson National Life Select Annual Reset 7-Yr Annual Point-to-Point (2) Fixed Lafayette Life Marquis Centennial 7 & Annual Point-to-Point Marquis Centennial 10 Monthly Averaging Monthly Point-to-Point Fixed Life Ins. Co. of the Southwest Lone Star SecurePlus Elite Annual Point-to-Point Daily Averaging Fixed SecurePlus Elite, Annual Point-to-Point SecurePlus Gold & Daily Averaging SecurePlus Platinum Fixed SecurePlus Elite 3 & 5 Annual Point-to-Point (2) Fixed SecurePlus Marquee 3 & 8 & Annual Point-to-Point (4) SecurePlus Preferred 2 & 6 Daily Averaging Fixed SecurePlus Paramount 5 Annual Point-to-Point (2) Daily Averaging Fixed SecurePlus Reliance Annual Point-to-Point Daily Averaging Fixed Lincoln Life & Annuity Co. of NY OptiChoice NY 5, OptiChoice NY Performance Triggered 7 & OptiChoice NY 9 Fixed Lincoln National Life New Directions 6 & Two-Year Point-to-Point New Directions 8 Performance Triggered Fixed with Multi-Year Guarantee OptiChoice 5, Monthly Averaging OptiChoice 7 & Monthly Point-to-Point OptiChoice 9 Performance Triggered Fixed OptiPoint 8 & Two-Year Point-to-Point OptiPoint 10 Monthly Point-to-Point Performance Triggered Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 53 AR067011 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 115 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Midland National Life Capstone 10-Year & Annual Point-to-Point (6) Capstone 14-Year Annual Point-to-Point with Multiple Indices Daily Averaging (4) Monthly Point-to-Point (2) Fixed Innovator Choice 10-Year & Annual Point-to-Point (6) Innovator Choice 14-Year Annual Point-to-Point with Multiple Indices Daily Averaging (4) Monthly Point-to-Point (2) Fixed LiveWell Fixed Index Annuity Annual Point-to-Point Fixed Mainstreet Four 2006 Annual Point-to-Point (6) Fixed MNL Endeavor 4 & Annual Point-to-Point (6) MNL Endeavor 6 Two-Year Point-to-Point Monthly Point-to-Point (2) Inverse Performance Triggered Fixed MNL Endeavor 8 & 8 Plus & Annual Point-to-Point (7) MNL Endeavor 12 & 12 Plus Monthly Point-to-Point (2) Inverse Performance Triggered Fixed MNL IncomeVantage 10, Annual Point-to-Point (6) MNL IncomeVantage 14, Monthly Averaging (3) MNL RetireVantage 10 & Daily Averaging (3) MNL RetireVantage 14 Monthly Point-to-Point (2) Inverse Performance Triggered Fixed MNL Pinnacle Annual Point-to-Point (6) Annual Point-to-Point with Multiple Indices Daily Averaging (4) Monthly Point-to-Point (2) Fixed MNL Prosper 5 & Annual Point-to-Point MNL Prosper 7 Two-Year Point-to-Point Performance Triggered Fixed MNL Prosper 10 Annual Point-to-Point Two-Year Point-to-Point Monthly Point-to-Point Performance Triggered Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 54 AR067012 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 116 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized Midland National Life MNL SecureVantage 10 & Annual Point-to-Point (5) MNL SecureVantage 14 Monthly Averaging (3) Daily Averaging (3) Monthly Point-to-Point (2) Inverse Performance Triggered Fixed Paragon Plus 10-Year & Annual Point-to-Point (6) Paragon Plus 14-Year Monthly Averaging (4) Monthly Point-to-Point (2) Fixed Prosperity Choice 10-Year & Annual Point-to-Point (6) Prosperity Choice 14-Year Annual Point-to-Point with Multiple Indices Daily Averaging (4) Monthly Point-to-Point (2) Fixed Select 6, 8, 10 & 14-Year Annual Point-to-Point (6) Monthly Point-to-Point (2) Fixed National Western Life Global Lookback Monthly Averaging Monthly Averaging with Multiple Indices Monthly Point-to-Point Fixed NWL Impact 7 & 7S Monthly Averaging Monthly Averaging with Multiple Indices Monthly Point-to-Point Fixed NWL Impact 10 & 10 FL Monthly Averaging Monthly Averaging with Multiple Indices Monthly Point-to-Point Fixed Ultra Benefit Monthly Averaging Fixed Ultra Classic, Ultra Future & Monthly Averaging Ultra Value Monthly Point-to-Point Fixed Nationwide Clear Horizon Annual Point-to-Point Fixed Nationwide Life & Annuity Nationwide New Heights Declared Rate/Blended Strategy (3) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 55 AR067013 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 117 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized North American Company Charter 10-Year & Annual Point-to-Point (6) Charter 14-Year Annual Point-to-Point with Multiple Indices Daily Averaging (4) Monthly Point-to-Point (2) Fixed Freedom Choice 8, 10 & Annual Point-to-Point (6) 14-Year Monthly Point-to-Point (2) Fixed NA Performance Choice 8, Annual Point-to-Point (7) NA Performance Choice 8 Plus, Monthly Point-to-Point (2) NA Performance Choice 12 & Inverse Performance Triggered NA Performance Choice 12 Plus Fixed NAC IncomeChoice10 Annual Point-to-Point (6) Monthly Averaging (3) Three-Year Monthly Averaging Monthly Point-to-Point (2) Inverse Performance Triggered Fixed NAC RetireChoice 10 & Annual Point-to-Point (6) NAC RetireChoice 14 Two-Year Point-to-Point Monthly Averaging (3) Monthly Point-to-Point (2) Inverse Performance Triggered Fixed NAC SecureChoice 10 & Annual Point-to-Point (5) NAC SecureChoice 14 Monthly Averaging (3) Three-Year Monthly Averaging Monthly Point-to-Point (2) Inverse Performance Triggered Fixed North American Pillar Annual Point-to-Point (6) Annual Point-to-Point with Multiple Indices Daily Averaging (4) Monthly Point-to-Point (2) Fixed Precision 10-Year & Annual Point-to-Point (6) Precision 14-Year Annual Point-to-Point with Multiple Indices Daily Averaging (4) Monthly Point-to-Point (2) Fixed Prizm Plus 10-Year & Annual Point-to-Point (6) Prizm Plus 14-Year Monthly Averaging (4) Monthly Point-to-Point (2) Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 56 AR067014 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 118 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized North American Company Ten Annual Point-to-Point (6) Annual Point-to-Point with Multiple Indices Monthly Averaging (4) Monthly Point-to-Point (2) Fixed Oxford Life Royal Select Fixed IA Annual Point-to-Point Monthly Averaging Fixed Select Fixed IA Annual Point-to-Point Monthly Averaging Fixed Silver Select Fixed IA Annual Point-to-Point Monthly Averaging Fixed Pacific Life Insurance Company Pacific Index Choice 6, 8 & 10 Annual Point-to-Point (2) Two-Year Point-to-Point (2) Performance Triggered (2) Fixed with Multi-Year Guarantee PHL Variable CommandMark, CommandMark Annual Point-to-Point (2) IR, IR LT, LT, Plus & Plus LT Modified Annual Point-to-Point Fixed Phoenix Index Select Gold Bonus Annual Point-to-Point (3) Two-Year Point-to-Point (3) Monthly Point-to-Point Fixed Phoenix Next Generation Annuity Annual Point-to-Point & Phoenix Next Generation Bonus Two-Year Point-to-Point Annuity Monthly Point-to-Point Performance Triggered Fixed Phoenix Personal Income Annuity Annual Point-to-Point (3) & Personal Protection Choice Two-Year Point-to-Point (3) Monthly Point-to-Point Fixed PHX Personal Retirement Choice Annual Point-to-Point (3) Two-Year Point-to-Point (3) Monthly Point-to-Point Fixed Phoenix Reflections Gold Bonus Annual Point-to-Point Annual Point-to-Point with Multiple Indices (2) Monthly Point-to-Point Performance Triggered Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. 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All Rights Reserved 57 AR067015 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 119 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized PHL Variable Premier Lifestyle Annuity Annual Point-to-Point Monthly Point-to-Point Performance Triggered Fixed Secure Lifestyle Bonus Annuity Annual Point-to-Point Annual Point-to-Point with Breakthrough Level Two-Year Point-to-Point with Breakthrough Level Monthly Point-to-Point Fixed Physicians Life Vista Index Accelerator 10-Yr & Annual Point-to-Point Vista Index Accelerator 15-Yr Monthly Averaging Fixed Vista Index Advantage 5-Yr, Annual Point-to-Point Vista Index Advantage 7-Yr & Monthly Averaging Vista Index Advantage 10-Yr Fixed Principal Life Principal Performance Annuity 7 Annual Point-to-Point Protective Life Insurance Co. Protective IA II 5-Year, Annual Point-to-Point Protective IA II 7-Year & Performance Triggered Protective IA II 10-Year Fixed Reliance Standard Keystone Index Annuity 5-Yr, Annual Point-to-Point Keystone Index Annuity 7-Yr & Monthly Averaging Keystone Index Annuity 10-Yr Fixed Sagicor Life Platinum Series Sage Advantage Annual Point-to-Point Annual Point-to-Point with Multiple Indices Fixed Security Benefit Life Foundations Annuity 5 & Annual Point-to-Point Foundations Annuity 7 Monthly Averaging Monthly Point-to-Point Fixed Secure Income Annuity Annual Point-to-Point Two-Year Point-to-Point Monthly Point-to-Point Fixed Total Value Annuity Annual Point-to-Point Term End Point (2) Fixed Sentinel Security Life Ins. Co. Summit Bonus Index Annuity Annual Point-to-Point Monthly Averaging Daily Averaging Monthly Point-to-Point Fixed Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 58 AR067016 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 120 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Crediting Methods Utilized The Standard Index Growth Annuity 5 & 7 Annual Point-to-Point Fixed Index Select Annuity 5, 7 & 10 Annual Point-to-Point Fixed Symetra Financial Edge Pro FIA 5-Year & Annual Point-to-Point (2) Edge Pro FIA 7-Year Monthly Averaging (2) Fixed Thrivent Financial for Lutherans Security Preference FIA 5-Year Annual Point-to-Point Fixed Security Preference FIA 7-Year Annual Point-to-Point Fixed Security Preference FIA 9-Year Annual Point-to-Point Fixed The US Life Ins. Co. in the City of NY Power Index 7-Year Annual Point-to-Point Voya Insurance and Annuity Co. Voya Secure Index Five, Annual Point-to-Point Voya Secure Index Seven, Modified Annual Point-to-Point Voya Secure Index Opportunities Monthly Averaging Plus & Voya Secure Index Outlook Monthly Point-to-Point Performance Triggered Fixed Voya Wealth Builder Eight Annual Point-to-Point Voya Wealth Builder Six Modified Annual Point-to-Point Performance Triggered Fixed Washington National Patriot Annual Point-to-Point Monthly Averaging Fixed Point-to-point structures in general, account for 35% of the market, where averaging structures are offered on 39% of products today. Fixed strategies account for 26% of crediting structures in the market. Just 5% of crediting methods on the market are some sort of rainbow method or multiple index strategy, whether the calculation is based on a term end point, annual point-to-point, or monthly averaging strategy. The average number of crediting methods per product for the quarter is 5.3. When you look at individual structures, the following designs rank as most popular with noted rank and share of the crediting method market: Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 59 AR067017 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 121 of 153 Wink’s Product Report 4th Quarter, 2014 1. Annual Point-to-Point 27% 2. Fixed 19% 3. Monthly Averaging 16% 4. Monthly PTP 15% 5. Daily Averaging 5% 6. Performance Triggered 3% 7. Monthly Avg: Multi. Index 3% 8. Two-Year PTP 3% Premium Bonuses A bonus of 5% continues to be the most popular incentive on indexed annuities today, capturing 24% of the bonus market share. The second most-popular bonus category is 3% bonuses, capturing 12% of the bonus market share. This quarter we saw an increase in all bonus categories with the exception of a decline in the share of bonuses from 6.00%-9.00% and bonuses of 10%. For the fourth quarter, 40% of the indexed annuity products that launched this quarter featured a premium bonus. This is a 100% increase from last quarter. This dramatic change in product development is primarily driven by the large number of products developed for a common bank distributor in the last quarter; where fourth quarter product development has focused less on bank products. Nearly every new bonus product offered in the fourth quarter featured recapture charges/vesting schedules. A 10% premium bonus (currently offered on just short of a dozen products) is currently the highest Account Value bonuses in the industry (note that most of these bonuses have a vesting schedule). On the other end of the spectrum, Pacific Life Insurance Company credits a 0.25% premium bonus on their Pacific Index Choice series of indexed annuities. The vast majority of premium bonuses are credited on the first-year’s premiums only. Take note that there are several indexed annuities that have bonuses, which are not available upon cash surrender. For example, the Allianz Life Endurance Plus features a 20% bonus, which is credited on the Benefit Base of the GLWB of the annuity. The company also offers a similar 15% bonus on their new Allianz 222 Annuity. Forethought offers similarly structured bonuses on their Forethought Income 125+ (25% bonus), Forethought Income 150+ (20% bonus) as well as on their Index Bonus 115 (15% bonus). PHL Variable Life (Phoenix) offers a 45% bonus on the Benefit Base of the GLWB of the Phoenix Personal Income Annuity (although the bonus is optional on this product via a GLWB rider). Likewise, Athene Annuity offers a 1% bonus on the Benefit Base of their Choice series’ optional GLWBs. Fidelity & Guaranty Life takes a different twist on the GLWB Benefit Base bonus: they offer the greater of an [18]% Benefit Base bonus or a [6.50]% compound rollup on their rider’s value (percentages vary by product). The bonuses on these products are not premium bonuses that the client can walk away with, in the event of surrender. These bonuses are received in the course of taking lifetime income payments through the withdrawal benefit only. Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 60 AR067018 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 122 of 153 Wink’s Product Report 4th Quarter, 2014 Indexed Annuity Premium Bonuses 27.5% 23.4% 16.9% 14.0% 11.2% 6.2% 0.6% 10% < 3% > 10% 3.99% 3% - 4.99% 4% - 5.99% 5% - 6% -9.00% Premium Bonus Percentage Product Premium Bonus Allianz Life 365i Annuity 5% Allianz Life 222 Annuity 15% (on Benefit Base, lifetime income required) Allianz Life MasterDex X 5% Allianz Life Endurance Plus 20% (on Benefit Base, lifetime income required) American Equity Advantage Gold 5% American Equity Benefit Gold 5% American Equity Bonus Gold 10% American Equity CT Gold 3% American Equity Foundation Gold 7% American Equity Retirement Gold 8% American General AG Choice 10 Annuity 4% American General Power Advantage 10 4% American General Power 10 Protector 4% American General Power Protector Plus Income 4% American General Power Select Builder 7% (4% for premium < $99,999) American General Power Select Plus Income 7% (4% for premium < $99,999) American National Strategy Indexed Annuity Plus 7 1% American National Strategy Indexed Annuity Plus 10 1% American National Value-Lock 10 2% American United Life Freedom Builder 9 2% Americo Future Provider Bonus 5% Americo LibertyMark 10 Plus 5% Americo LibertyMark 10 LT Plus 5% Americo Ultimate One Index 9 Bonus 5% Annuity Investors Life FlexMax 14 2% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 61 AR067019 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 123 of 153 Wink’s Product Report 4th Quarter, 2014 Product Premium Bonus Annuity Investors Life FlexMax Plus 1.5% Athene Annuity & Life Performance Elite 3% Athene Annuity & Life Performance Elite 10 5% Athene Annuity & Life Performance Elite 10 Plus 10% Athene Annuity & Life Performance Elite 14 7% Athene Annuity & Life Performance Elite 14 Plus 12% Athene Annuity & Life Performance Elite Plus 8% Athene Annuity & Life Enhanced Choice 8 2% plus 1% (optional bonus available with GLWB rider) Athene Annuity & Life Enhanced Choice 12 5% plus 1% (optional bonus available with GLWB rider) Athene Annuity and Life BCA 8 8% (optional bonus available with GMDB rider) OR 8% (optional bonus available with GLWB rider & GMDB not elected) OR 4% (if both GLWB & GMDB are elected), on Benefit Base, lifetime income required Athene Annuity and Life BCA 10FL 10% (optional bonus available with GLWB rider is elected OR 5% (if both GLWB & GMDB are elected), on Benefit Base, lifetime income required Athene Annuity and Life BCA 10S 8% (optional bonus available with GLWB rider is elected OR 4% (if both GLWB & GMDB are elected), on Benefit Base, lifetime income required Athene Annuity and Life BCA 12 10% (optional bonus available with GMDB rider) OR 10% (optional bonus available with GLWB rider & GMDB not elected) OR 5% (if both GLWB & GMDB are elected), on Benefit Base, lifetime income required Athene Annuity and Life Benefit 10 6% Athene Annuity and Life Income Preferred Bonus 4% Athene Annuity and Life TargetHorizon 10 6% (5% for premium < $50,000) Athene Annuity and Life TargetHorizon 15 10% (8% for premium < $50,000) Bankers Life & Casualty Premium Bonus IA 0.50% EquiTrust BuilderBonus Index 6% EquiTrust Market Booster Index 7% (4% premiums pd immediately, 2% of account value on 1st anniversary & 1.00% on 3rd anniversary) EquiTrust MarketPower Bonus Index 10% EquiTrust MarketTen Bonus Index 6% EquiTrust MarketTwelve Bonus Index 12% (6% premiums pd immediately, & 2% of account value on 1st, 2nd & 3rd anniversaries) Fidelity & Guaranty Life AdvanceMark Utlra 10 7% for ages 0-75 & 3.5% for ages 76+ Fidelity & Guaranty Life AdvanceMark Utlra 10 LT 7% for ages 0-75 & 3.5% for ages 76+ Fidelity & Guaranty Life AdvanceMark Utlra 14 10% for ages 0-75 & 5% for ages 76+ Fidelity & Guaranty Life FGIndex-Choice 10 3% Fidelity & Guaranty Life Income & WealthBuilder 7 7% plus 18% (optional bonus available with GLWB rider, must pay explicit AV- based charge if elected) Fidelity & Guaranty Life Income & WealthBuilder 1010% plus 18% (optional bonus available with GLWB rider, must pay explicit AV- based charge if elected) Fidelity & Guaranty Life LegendMark 10 LT Plus 7% for ages 0-75 & 3.5% for ages 76+ Fidelity & Guaranty Life LegendMark 10 Plus 7% for ages 0-75 & 3.5% for ages 76+ Fidelity & Guaranty Life LegendMark 14 Plus 10% for ages 0-75 & 5% for ages 76+ Fidelity & Guaranty Life Performance Pro 9.5% for ages 0-75 & 4.5% for ages 76+ Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 62 AR067020 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 124 of 153 Wink’s Product Report 4th Quarter, 2014 Product Premium Bonus Fidelity & Guaranty Life Prosperity Elite 7 2% for ages 0-75 & 1% for ages 76+ (optional bonus available with GMDB rider) OR 4% for ages 0-75 & 2% for ages 76+ (optional bonus available with GLWB rider) Fidelity & Guaranty Life Prosperity Elite 10 4% for ages 0-75 & 2% for ages 76+ (optional bonus available with GMDB rider) OR 7% for ages 0-75 & 3.5% for ages 76+ (optional bonus available with GLWB rider) Fidelity & Guaranty Life Prosperity Elite 14 5% for ages 0-75 & 2.5% for ages 76+ (optional bonus available with GMDB rider) OR 8% for ages 0-75 & 4% for ages 76+ (optional bonus available with GLWB rider) Fidelity & Guaranty Life Safe Income Plus 8% plus 10% (optional bonus available with GLWB rider) Fidelity & Guaranty Life SpectraMark 3% Fidelity & Guaranty Life SpectraMark LT 3% Fidelity & Guaranty of NY FGNYIndex-Choice 10 2% Forethought Bonus Advantage 5% Forethought ForeFront Index Bonus-ForeSpending 7% Forethought Life Income 125+ 25% (on Benefit Base, lifetime income required) Forethought Life Income 150+ 20% (received incrementally at issue and in years 3 & 5, on Benefit Base, lifetime income required) Forethought Life Index Bonus 115 15% (on Benefit Base, lifetime income required) Genworth Life SecureLiving Index 7 8% (on Benefit Base, lifetime income required) Genworth Life SecureLiving Index 10 Plus 6% plus 8% (on Benefit Base, lifetime income required) Great American Life American Valor 10 4% Horace Mann Destination FIA 6-Year 2% (1% for premium < $50,000) Horace Mann Destination FIA 9-Year 3% (2% for premium < $50,000) Jackson National Life Elite Choice Rewards 8-Year 5% (2.5% for premium < $100,000) Jackson National Life Elite Choice Rewards 10-Year 5% (2.5% for premium < $100,000) Life Insurance Co. of the SW SecurePlus Elite 3 3% (received incrementally in years 11 through 13) Life Insurance Co. of the SW SecurePlus Elite 5 5% (received incrementally in years 11 through 15) Life Insurance Co. of the SW SecurePlus Marquee 3 3% Life Insurance Co. of the SW SecurePlus Marquee 8 8% Life Insurance Co. of the SW SecurePlus Paramount 55% Life Insurance Co. of the SW SecurePlus Preferred 2 2% Life Insurance Co. of the SW SecurePlus Preferred 6 6% Lincoln National Life OptiPoint 8 3% (2% for premium < $100,000) Lincoln National Life OptiPoint 10 4% (3% for premium < $100,000) Midland National Life Capstone 10-Year 5% Midland National Life Capstone 14-Year 8% Midland National Life Innovator Choice 10-Year 5% Midland National Life Innovator Choice 14-Year 8% Midland National Life MNL Endeavor 8 Plus 5% Midland National Life MNL Endeavor 12 Plus 7% Midland National Life MNL IncomeVantage 10 5% (on Benefit Base, lifetime income required) Midland National Life MNL IncomeVantage 14 5% (on Benefit Base, lifetime income required) Midland National Life MNL Pinnacle 5% Midland National Life MNL RetireVantage 10 3% plus 3% (on Benefit Base, lifetime income required) Midland National Life MNL RetireVantage 14 3% plus 5% (on Benefit Base, lifetime income required) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 63 AR067021 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 125 of 153 Wink’s Product Report 4th Quarter, 2014 Product Premium Bonus Midland National Life MNL SecureVantage 10 5% plus 5% (on Benefit Base, lifetime income required) Midland National Life MNL SecureVantage 14 5% plus 5% (on Benefit Base, lifetime income required) Midland National Life Paragon Plus 10-Year 5% Midland National Life Paragon Plus 14-Year 8% Midland National Life Prosperity Choice 10-Year 5% Midland National Life Prosperity Choice 14-Year 8% National Western Life Global Lookback 5% (optional bonus available with GLWB rider, must pay explicit AV- based charge if elected) National Western NWL Impact 7 5% plus 5% (optional bonus available with GLWB rider) National Western NWL Impact 7S 5% plus 5% (optional bonus available with GLWB rider) National Western NWL Impact 10 7% plus 5% (optional bonus available with GLWB rider) National Western NWL Impact 10 FL 7% plus 5% (optional bonus available with GLWB rider) National Western Life Ultra Benefit 5% on 1st year premiums, then 4% on all premiums during years two through five plus 5% (optional bonus available with GLWB rider) National Western Life Ultra Classic 5% (optional bonus available with GLWB rider) National Western Life Ultra Future 9% on 1st year premiums, as well as 4.75% on all premiums during years two through five plus 5% (optional bonus available with GLWB rider) National Western Life Ultra Value 2% plus 5% (optional bonus available with GLWB rider) Nationwide Life & Annuity Nationwide New Heights 3% (optional bonus available when GLWB rider or GMDB rider is elected) North American Company Charter 10-Year 5% North American Company Charter 14-Year 8% North American Company NAC IncomeChoice 10 5% (on Benefit Base, lifetime income required) North American Company NAC RetireChoice 10 2.5% plus 2.5% (on Benefit Base, lifetime income required) North American Company NAC RetireChoice 14 3% plus 5% (on Benefit Base, lifetime income required) North American Company NAC SecureChoice 10 5% plus 5% (on Benefit Base, lifetime income required) North American Company NAC SecureChoice 14 5% plus 5% (on Benefit Base, lifetime income required) North American Co. PerformanceChoice 8 Plus 5% North American Co. PerformanceChoice 12 Plus 7% North American Company Pillar 3% North American Company Precision 10-Year 5% North American Company Precision 14-Year 8% North American Company Prizm Plus 10-Year 5% North American Company Prizm Plus 14-Year 8% North American Company Ten 6% Oxford Life Royal Select Fixed IA 8% Oxford Life Silver Select Fixed IA 4% Pacific Life Pacific Index Choice 6 0.25% Pacific Life Pacific Index Choice 8 0.25% Pacific Life Pacific Index Choice 10 0.25% Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 64 AR067022 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 126 of 153 Wink’s Product Report 4th Quarter, 2014 Product Premium Bonus PHL Variable CommandMark IR 5% PHL Variable CommandMark IR LT 4% PHL Variable CommandMark Plus 7% PHL Variable CommandMark Plus LT 5% PHL Variable Phoenix Index Select Gold Bonus 7% plus 25% if income commences after year one OR 7% plus 12.5% if income commences in year one (all on Benefit Base, lifetime income required) PHL Variable Phoenix Next Generation Bonus Ann. 10% PHL Variable Phoenix Personal Income Annuity 30% if income commences in year one; 37.5% if income commences in year two; 45% if income commences in year three or later (all on Benefit Base, lifetime income required) PHL Variable Phoenix Personal Protection Choice 30% if income commences in year one; 37.5% if income commences in year two; 45% if income commences in year three or later (all on Benefit Base, lifetime income required) PHL Variable Personal Retirement Choice 12% plus 3% if GLWB is elected PHL Variable Phoenix Reflections Gold Bonus 8% plus 25% if income commences after year one OR 8% plus 12.5% if income commences in year one (all on Benefit Base, lifetime income required) PHL Variable Premier Lifestyle Annuity 17% (on Benefit Base, lifetime income required) PHL Variable Secure Lifestyle Bonus Annuity 8% Physicians Life Vista Index Accelerator 10-Yr 5% or 3% (based on age) Physicians Life Vista Index Accelerator 15-Yr 8% or 5% (based on age) Sagicor Life Platinum Series Sage Advantage 5% Security Benefit Life Foundations Annuity 5 1% Security Benefit Life Foundations Annuity 7 1% Security Benefit Life Secure Income Annuity 8% Security Benefit Life Total Value Annuity 7% or 8% (See AnnuitySpecs) Sentinel Security Life Summit Bonus Index Annuity 7% plus 1% (optional bonus available with GLWB rider) Voya Insurance and Annuity Secure Index Opp. Plus 5% Voya Insurance and Annuity Secure Index Outlook 3% Guaranteed Lifetime Withdrawal Benefits Today there are 30 different indexed annuity companies that offer Guaranteed Lifetime Withdrawal Benefits. Rollups range from 2% to 14% and are offered on both a compound and simple interest basis. Over the past quarter, there were nominal changes to GLWBs- primarily rollup reductions. Rider charges are level with last quarter, and are holding steady at an average charge of 0.92%. There are currently 216 Indexed Annuities that offer Guaranteed Lifetime Withdrawal Benefits, meaning that 68% of all indexed annuities offer a GLWB. This is an increase of 1%, as compared to last quarter. Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 65 AR067023 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 127 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral Allianz Life Allianz 222 Annuity See AnnuitySpecsSee AnnuitySpecs Allianz Life Allianz 360 Annuity N/A N/A Allianz Life Allianz 365i Annuity 6.00% To Age 90 Allianz Life Allianz Core Income 7 Annuity See AnnuitySpecsSee AnnuitySpecs Allianz Life Endurance Plus N/A N/A Allianz Life Essential Income 7 See AnnuitySpecsSee AnnuitySpecs Allianz Life MasterDex X 8.00% To Age 90 American Equity Investment Life Advantage Gold 4.00% 10 Years American Equity Investment Life Advantage Gold 6.50% 10 Years American Equity Investment Life Advantage Gold 4.00% 10 Years American Equity Investment Life Advantage Gold 6.50% 10 Years American Equity Investment Life Advantage Gold 7.00% 5 Years American Equity Investment Life Advantage Gold 7.00% 5 Years American Equity Investment Life Benefit Gold 4.00% 10 Years American Equity Investment Life Benefit Gold 6.50% 10 Years American Equity Investment Life Benefit Gold 4.00% 10 Years American Equity Investment Life Benefit Gold 6.50% 10 Years American Equity Investment Life Benefit Gold 7.00% 5 Years American Equity Investment Life Benefit Gold 7.00% 5 Years American Equity Investment Life Bonus Gold 4.00% 10 Years American Equity Investment Life Bonus Gold 6.50% 10 Years American Equity Investment Life Bonus Gold 4.00% 10 Years American Equity Investment Life Bonus Gold 6.50% 10 Years American Equity Investment Life Bonus Gold 7.00% 5 Years American Equity Investment Life Bonus Gold 7.00% 5 Years American Equity Investment Life Foundation Gold 4.00% 10 Years American Equity Investment Life Foundation Gold 6.50% 10 Years American Equity Investment Life Foundation Gold 4.00% 10 Years American Equity Investment Life Foundation Gold 6.50% 10 Years American Equity Investment Life Foundation Gold 7.00% 5 Years American Equity Investment Life Foundation Gold 7.00% 5 Years American Equity Investment Life Integrity Gold 4.00% 10 Years American Equity Investment Life Integrity Gold 6.50% 10 Years American Equity Investment Life Integrity Gold 4.00% 10 Years American Equity Investment Life Integrity Gold 6.50% 10 Years American Equity Investment Life Integrity Gold 7.00% 5 Years American Equity Investment Life Integrity Gold 7.00% 5 Years American Equity Investment Life Retirement Gold 4.00% 10 Years American Equity Investment Life Retirement Gold 6.50% 10 Years American Equity Investment Life Retirement Gold 4.00% 10 Years American Equity Investment Life Retirement Gold 6.50% 10 Years American Equity Investment Life Retirement Gold 7.00% 5 Years American Equity Investment Life Retirement Gold 7.00% 5 Years American Equity Investment Life Traditions Gold 4.00% 10 Years American Equity Investment Life Traditions Gold 6.50% 10 Years American Equity Investment Life Traditions Gold 4.00% 10 Years American Equity Investment Life Traditions Gold 6.50% 10 Years American Equity Investment Life Traditions Gold 7.00% 5 Years American Equity Investment Life Traditions Gold 7.00% 5 Years American General Life AG Choice Index 10 Annuity 7.00% 10 Years American General Life Power Advantage 7 7.00% 10 Years American General Life Power Advantage 10 7.00% 10 Years American General Life Power Index Plus Income Annuity 7.00% 10 Years Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 66 AR067024 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 128 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral American General Life Power Index 5 Plus Annuity 7.00% 10 Years American General Life Power Index 7 Plus Annuity 7.00% 10 Years American General Life Power Select Plus Income 7.50% 10 Years American General Life Power 7 Protector Plus Income 7.00% 10 Years American General Life Power 10 Protector Plus Income 7.00% 10 Years American National Life Strategy Indexed Annuity Plus7 7.00% 10 Years American National Life Strategy Indexed Annuity Plus7 4.00% 10 Years American National Life Strategy Indexed Annuity Plus10 7.00% 10 Years American National Life Strategy Indexed Annuity Plus10 4.00% 10 Years Ameritas Life Compass Index Annuity 6.25% 15 Years Ameritas Life Compass Index Annuity 6.25% 15 Years Annuity Investors Life FlexMax 10.00% 10 Years Annuity Investors Life FlexMax 14 10.00% 10 Years Annuity Investors Life FlexMax Plus 10.00% 10 Years Annuity Investors Life SingleMax 10 10.00% 10 Years Athene Annuity & Life Assurance Choice 10 6.50% 10 Years Athene Annuity & Life Assurance Choice 10 6.50% 10 Years Athene Annuity & Life Assurance Enhanced Choice 8 6.50% 10 Years Athene Annuity & Life Assurance Enhanced Choice 8 6.50% 10 Years Athene Annuity & Life Assurance Enhanced Choice 12 6.50% 10 Years Athene Annuity & Life Assurance Enhanced Choice 12 6.50% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 8 6.50% 5 Years Athene Annuity and Life Company BalancedChoice Annuity 8 4.00% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 8 3.00% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 10FL 6.50% 5 Years Athene Annuity and Life Company BalancedChoice Annuity 10FL 4.00% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 10FL 3.00% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 10S 6.50% 5 Years Athene Annuity and Life Company BalancedChoice Annuity 10S 4.00% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 10S 3.00% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 12 6.50% 5 Years Athene Annuity and Life Company BalancedChoice Annuity 12 4.00% 10 Years Athene Annuity and Life Company BalancedChoice Annuity 12 3.00% 10 Years Athene Annuity and Life Company Benefit 10 8.00% 10 Years Athene Annuity and Life Company Income Preferred Bonus 6.00% 12 Years Athene Annuity and Life Company Income Preferred Ten 6.00% 12 Years Athene Annuity and Life Company TargetHorizon 10 N/A N/A Athene Annuity and Life Company TargetHorizon 10 N/A N/A Athene Annuity and Life Company TargetHorizon 10 Select N/A N/A Athene Annuity and Life Company TargetHorizon10 Select N/A N/A Athene Annuity and Life Company TargetHorizon 15 N/A N/A Athene Annuity and Life Company TargetHorizon 15 N/A N/A Eagle Life Insurance Company Eagle Select 6 7.00% 7 Years Eagle Life Insurance Company Eagle Select 6 5.00% 10 Years Eagle Life Insurance Company Eagle Select 8 7.00% 7 Years Eagle Life Insurance Company Eagle Select 8 5.00% 10 Years Eagle Life Insurance Company Eagle Select 10 7.00% 7 Years Eagle Life Insurance Company Eagle Select 10 5.00% 10 Years EquiTrust Builder Bonus Index 6.50% 15 Years EquiTrust MarketBooster Index 6.50% 15 Years EquiTrust MarketPower Bonus Index 6.50% 15 Years EquiTrust MarketTen Bonus Index 6.50% 15 Years EquiTrust MarketTwelve Bonus Index 6.50% 15 Years Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 67 AR067025 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 129 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral EquiTrust MarketValue Index 6.50% 15 Years Farm Bureau Life Insurance Co. Income Guard Indexed Annuity 7.00% 20 Years Fidelity & Guaranty Life AdvanceMark Ultra 10 7.00% 10 Years Fidelity & Guaranty Life AdvanceMark Ultra 10 LT 7.00% 10 Years Fidelity & Guaranty Life AdvanceMark Ultra 14 7.00% 10 Years Fidelity & Guaranty Life FG AccumulatorPlus 10 7.25% 10 Years Fidelity & Guaranty Life FG AccumulatorPlus 14 7.25% 10 Years Fidelity & Guaranty Life FGIndex-Choice 10 7.25% 10 Years Fidelity & Guaranty Life FGIndex-Choice 10 7.25% 10 Years Fidelity & Guaranty Life Income and WealthBuilder 7 7.20% 10 Years Fidelity & Guaranty Life Income and WealthBuilder 10 7.20% 10 Years Fidelity & Guaranty Life LegendMark 10 LT Plus See AnnuitySpecs See AnnuitySpecs Fidelity & Guaranty Life LegendMark 10 Plus See AnnuitySpecs See AnnuitySpecs Fidelity & Guaranty Life LegendMark 14 Plus See AnnuitySpecs See AnnuitySpecs Fidelity & Guaranty Life Performance Pro See AnnuitySpecs See AnnuitySpecs Fidelity & Guaranty Life Prosperity Elite 7 7.00% 10 Years Fidelity & Guaranty Life Prosperity Elite 10 7.00% 10 Years Fidelity & Guaranty Life Prosperity Elite 14 7.00% 10 Years Fidelity & Guaranty Life Safe Income Plus 7.00% 10 Years Fidelity & Guaranty Life Simplicity Elite 7 10.00% 10 Years Fidelity & Guaranty Life Simplicity Elite 10 10.00% 10 Years Fidelity & Guaranty Life Simplicity Elite 14 10.00% 10 Years Fidelity & Guaranty Life SpectraMark 6.75% 10 Years Fidelity & Guaranty Life SpectraMark LT 6.75% 10 Years Forethought Life Bonus Advantage 5.00% 10 Years Forethought Life ForeFront Index Bonus-ForeSpending 5.00% 10 Years Forethought Life ForeFront Index Choice-ForeSharing 5.00% 10 Years Forethought Life ForeFront Index Choice-ForeSpending 5.00% 10 Years Forethought Life ForeIncome 7-Year 10.00% For Life Forethought Life ForeIncome 7-Year 7.50% For Life Forethought Life ForeIncome 9-Year 10.00% For Life Forethought Life ForeIncome 9-Year 7.50% For Life Forethought Life Forethought Income 125+ 5.00% 10 Years Forethought Life Forethought Income 150+ N/A N/A Forethought Life Index Bonus 115 6.00% 10 Years Genworth Life & Annuity SecureLiving Growth+ See AnnuitySpecs See AnnuitySpecs Genworth Life & Annuity SecureLiving Index 7 8.00% 10 Years Genworth Life & Annuity SecureLiving Index 10 Plus 8.00% 10 Years Great American Life American Custom10 5.00% 10 Years Great American Life American Custom10 10.00% 10 Years Great American Life American Freedom Liberty 6 10.00% 10 Years Great American Life American Freedom Liberty 6 8.00% 12 Years Great American Life American Freedom Liberty 8 10.00% 10 Years Great American Life American Freedom Liberty 8 8.00% 12 Years Great American Life American Legend III 10.00% 10 Years Great American Life American Legend III 8.00% 12 Years Great American Life American Valor 10 10.00% 10 Years Great American Life American Valor 10 8.00% 12 Years Great American Life AssuranceProtect 6 10.00% 10 Years Great American Life AssuranceProtect 6 8.00% 12 Years Great American Life AssuranceSelect 7 10.00% 10 Years Great American Life AssuranceSelect 7 8.00% 12 Years Great American Life Safe Outlook 10.00% 10 Years Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 68 AR067026 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 130 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral Great American Life Safe Outlook 8.00% 12 Years Great American Life Safe Return 10.00% 10 Years Great American Life Safe Return 8.00% 12 Years Greenfields Life Income Guard Indexed Annuity 7.00% 20 Years Integrity Life Insurance Company Indextra Fixed Indexed Annuity 7-Year 7.00% 10 Years Integrity Life Insurance Company Indextra Fixed Indexed Annuity 10-Year 7.00% 10 Years Life Insurance Company of the SW Lone Star SecurePlus Elite 6.00% 10 Years Life Insurance Company of the SW SecurePlus Elite 6.00% 10 Years Life Insurance Company of the SW SecurePlus Elite 3 6.00% 10 Years Life Insurance Company of the SW SecurePlus Elite 5 6.00% 10 Years Life Insurance Company of the SW SecurePlus Gold 6.00% 10 Years Life Insurance Company of the SW SecurePlus Gold 6.00% 10 Years Life Insurance Company of the SW SecurePlus Marquee 3 6.00% 8 Years Life Insurance Company of the SW SecurePlus Marquee 8 6.00% 8 Years Life Insurance Company of the SW SecurePlus Paramount 5 6.00% 10 Years Life Insurance Company of the SW SecurePlus Paramount 5 6.00% 10 Years Life Insurance Company of the SW SecurePlus Platinum 6.00% 10 Years Life Insurance Company of the SW SecurePlus Platinum 6.00% 10 Years Life Insurance Company of the SW SecurePlus Preferred 2 6.00% 8 Years Life Insurance Company of the SW SecurePlus Preferred 6 6.00% 8 Years Life Insurance Company of the SW SecurePlus Reliance 6.00% 10 Years Lincoln National Life New Directions 6 5.00% 10 Years Lincoln National Life New Directions 8 5.00% 10 Years Lincoln National Life OptiChoice 5 5.00% 10 Years Lincoln National Life OptiChoice 7 5.00% 10 Years Lincoln National Life OptiChoice 9 5.00% 10 Years Lincoln National Life OptiPoint 8 5.00% 10 Years Lincoln National Life OptiPoint 10 5.00% 10 Years Midland National Life Capstone 10-Year 6.75% 10 Years Midland National Life Capstone 10-Year 6.25% 10 Years Midland National Life Capstone 10-Year 5.50% For Life Midland National Life Capstone 14-Year 6.75% 10 Years Midland National Life Capstone 14-Year 6.25% 10 Years Midland National Life Capstone 14-Year 5.50% For Life Midland National Life Innovator Choice 10-Year 6.75% 10 Years Midland National Life Innovator Choice 10-Year 6.25% 10 Years Midland National Life Innovator Choice 10-Year 5.50% For Life Midland National Life Innovator Choice 14-Year 6.75% 10 Years Midland National Life Innovator Choice 14-Year 6.25% 10 Years Midland National Life Innovator Choice 14-Year 5.50% For Life Midland National Life LiveWell Fixed Index Annuity 8.00% For Life Midland National Life MNL Endeavor 6 6.75% 10 Years Midland National Life MNL Endeavor 6 6.25% 10 Years Midland National Life MNL Endeavor 6 5.50% For Life Midland National Life MNL Endeavor 8 6.75% 10 Years Midland National Life MNL Endeavor 8 6.25% 10 Years Midland National Life MNL Endeavor 8 5.50% For Life Midland National Life MNL Endeavor 8 Plus 6.75% 10 Years Midland National Life MNL Endeavor 8 Plus 6.25% 10 Years Midland National Life MNL Endeavor 8 Plus 5.50% For Life Midland National Life MNL Endeavor 12 6.75% 10 Years Midland National Life MNL Endeavor 12 6.25% 10 Years Midland National Life MNL Endeavor 12 5.50% For Life Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 69 AR067027 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 131 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral Midland National Life MNL Endeavor 12 Plus 6.75% 10 Years Midland National Life MNL Endeavor 12 Plus 6.25% 10 Years Midland National Life MNL Endeavor 12 Plus 5.50% For Life Midland National Life MNL IncomeVantage 10 4.00% 20 Years Midland National Life MNL IncomeVantage 14 4.00% 20 Years Midland National Life MNL Pinnacle 6.75% 10 Years Midland National Life MNL Pinnacle 6.25% 10 Years Midland National Life MNL Pinnacle 5.50% For Life Midland National Life MNL Prosper 5 6.25% 10 Years Midland National Life MNL Prosper 5 6.75% 10 Years Midland National Life MNL Prosper 5 5.50% For Life Midland National Life MNL Prosper 7 6.25% 10 Years Midland National Life MNL Prosper 7 6.75% 10 Years Midland National Life MNL Prosper 7 5.50% For Life Midland National Life MNL Prosper 10 6.25% 10 Years Midland National Life MNL Prosper 10 6.75% 10 Years Midland National Life MNL Prosper 10 5.50% For Life Midland National Life MNL RetireVantage 10 6.75% 10 Years Midland National Life MNL RetireVantage 10 6.25% 10 Years Midland National Life MNL RetireVantage 10 5.50% For Life Midland National Life MNL RetireVantage 14 6.75% 10 Years Midland National Life MNL RetireVantage 14 6.25% 10 Years Midland National Life MNL RetireVantage 14 5.50% For Life Midland National Life MNL SecureVantage 10 4.50% 20 Years Midland National Life MNL SecureVantage 14 4.50% 20 Years Midland National Life Paragon Plus 10-Year 6.75% 10 Years Midland National Life Paragon Plus 10-Year 6.25% 10 Years Midland National Life Paragon Plus 10-Year 5.50% For Life Midland National Life Paragon Plus 14-Year 6.75% 10 Years Midland National Life Paragon Plus 14-Year 6.25% 10 Years Midland National Life Paragon Plus 14-Year 5.50% For Life Midland National Life Prosperity Choice 10-Year 6.75% 10 Years Midland National Life Prosperity Choice 10-Year 6.25% 10 Years Midland National Life Prosperity Choice 10-Year 5.50% For Life Midland National Life Prosperity Choice 14-Year 6.75% 10 Years Midland National Life Prosperity Choice 14-Year 6.25% 10 Years Midland National Life Prosperity Choice 14-Year 5.50% For Life Midland National Life Select 6-Year 6.75% 10 Years Midland National Life Select 6-Year 6.25% 10 Years Midland National Life Select 6-Year 5.50% For Life Midland National Life Select 8-Year 6.75% 10 Years Midland National Life Select 8-Year 6.25% 10 Years Midland National Life Select 8-Year 5.50% For Life Midland National Life Select 10-Year 6.75% 10 Years Midland National Life Select 10-Year 6.25% 10 Years Midland National Life Select 10-Year 5.50% For Life Midland National Life Select 14-Year 6.75% 10 Years Midland National Life Select 14-Year 6.25% 10 Years Midland National Life Select 14-Year 5.50% For Life National Western Life Global Lookback 4.00% 10 Years National Western Life Global Lookback 4.00% 10 Years National Western Life NWL Impact 7 4.00% 10 Years National Western Life NWL Impact 7 4.00% 10 Years Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 70 AR067028 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 132 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral National Western Life NWL Impact 7S 4.00% 10 Years National Western Life NWL Impact 7S 4.00% 10 Years National Western Life NWL Impact 10 4.00% 10 Years National Western Life NWL Impact 10 4.00% 10 Years National Western Life NWL Impact 10 FL 4.00% 10 Years National Western Life NWL Impact 10 FL 4.00% 10 Years National Western Life Ultra Benefit 4.00% 10 Years National Western Life Ultra Benefit 4.00% 10 Years National Western Life Ultra Classic 4.00% 10 Years National Western Life Ultra Classic 4.00% 10 Years National Western Life Ultra Future 4.00% 10 Years National Western Life Ultra Future 4.00% 10 Years National Western Life Ultra Value 4.00% 10 Years National Western Life Ultra Value 4.00% 10 Years Nationwide Life & Annuity Nationwide New Heights See AnnuitySpecs See AnnuitySpecs North American Company Charter 10-Year 6.75% 10 Years North American Company Charter 10-Year 6.25% 10 Years North American Company Charter 10-Year 5.50% For Life North American Company Charter 14-Year 6.75% 10 Years North American Company Charter 14-Year 6.25% 10 Years North American Company Charter 14-Year 5.50% For Life North American Company Freedom Choice 8-Year 6.75% 10 Years North American Company Freedom Choice 8-Year 6.25% 10 Years North American Company Freedom Choice 8-Year 5.50% For Life North American Company Freedom Choice 10-Year 6.75% 10 Years North American Company Freedom Choice 10-Year 6.25% 10 Years North American Company Freedom Choice 10-Year 5.50% For Life North American Company Freedom Choice 14-Year 6.75% 10 Years North American Company Freedom Choice 14-Year 6.25% 10 Years North American Company Freedom Choice 14-Year 5.50% For Life North American Company NA Performance Choice 8 6.75% 10 Years North American Company NA Performance Choice 8 6.25% 10 Years North American Company NA Performance Choice 8 5.50% For Life North American Company NA Performance Choice 8 Plus 6.75% 10 Years North American Company NA Performance Choice 8 Plus 6.25% 10 Years North American Company NA Performance Choice 8 Plus 5.50% For Life North American Company NA Performance Choice 12 6.75% 10 Years North American Company NA Performance Choice 12 6.25% For Life North American Company NA Performance Choice 12 5.50% 10 Years North American Company NA Performance Choice 12 Plus 6.75% 10 Years North American Company NA Performance Choice 12 Plus 6.25% For Life North American Company NA Performance Choice 12 Plus 5.50% 10 Years North American Company NAC IncomeChoice 10 4.00% 20 Years North American Company NAC RetireChoice 10 5.50% For Life North American Company NAC RetireChoice 10 6.25% 10 Years North American Company NAC RetireChoice 10 6.75% 10 Years North American Company NAC RetireChoice 14 5.50% For Life North American Company NAC RetireChoice 14 6.25% 10 Years North American Company NAC RetireChoice 14 6.75% 10 Years North American Company NAC SecureChoice 14 4.50% 20 Years North American Company North American Pillar 6.75% 10 Years North American Company North American Pillar 6.25% 10 Years North American Company North American Pillar 5.50% For Life Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 71 AR067029 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 133 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral North American Company Precision 10-Year 6.75% 10 Years North American Company Precision 10-Year 6.25% 10 Years North American Company Precision 10-Year 5.50% For Life North American Company Precision 14-Year 6.75% 10 Years North American Company Precision 14-Year 6.25% 10 Years North American Company Precision 14-Year 5.50% For Life North American Company Prizm Plus 10-Year 6.75% 10 Years North American Company Prizm Plus 10-Year 6.25% 10 Years North American Company Prizm Plus 10-Year 5.50% For Life North American Company Prizm Plus 14-Year 6.75% 10 Years North American Company Prizm Plus 14-Year 6.25% 10 Years North American Company Prizm Plus 14-Year 5.50% For Life Oxford Life Royal Select Fixed IA 6.50% 10 Years Oxford Life Select Fixed IA 6.50% 10 Years Oxford Life Silver Select Fixed IA 6.50% 10 Years Pacific Life Insurance Company Pacific Index Choice 6 8.00% 10 Years Pacific Life Insurance Company Pacific Index Choice 8 8.00% 10 Years Pacific Life Insurance Company Pacific Index Choice 10 8.00% 10 Years PHL Variable Company CommandMark 7.00% 15 Years PHL Variable Company CommandMark 7.00% 15 Years PHL Variable Company CommandMark IR 6.50% 10 Years PHL Variable Company CommandMark IR 6.50% 10 Years PHL Variable Company CommandMark IR LT 6.50% 10 Years PHL Variable Company CommandMark IR LT 6.50% 10 Years PHL Variable Company CommandMark Plus 6.50% 10 Years PHL Variable Company CommandMark Plus 6.50% 10 Years PHL Variable Company CommandMark Plus LT 6.50% 10 Years PHL Variable Company CommandMark Plus LT 6.50% 10 Years PHL Variable Company CommandMark LT 7.00% 15 Years PHL Variable Company CommandMark LT 7.00% 15 Years PHL Variable Company Personal Protection Choice 14.00% 10 Years PHL Variable Company Personal Protection Choice 3.00% 7 Years PHL Variable Company Personal Protection Choice 8.00% 8 Years PHL Variable Company Personal Protection Choice 3.00% 8 Years PHL Variable Company Personal Protection Choice 3.00% 8 Years PHL Variable Company Personal Protection Choice 14.00% 10 Years PHL Variable Company Phoenix Index Select Gold Bonus 8.00% 8 Years PHL Variable Company Phoenix Index Select Gold Bonus 3.00% 8 Years PHL Variable Company Phoenix Next Generation Annuity See AnnuitySpecs See AnnuitySpecs PHL Variable Company Phoenix Next Generation Bonus Annuity See AnnuitySpecs See AnnuitySpecs PHL Variable Company Phoenix Personal Income Annuity N/A N/A PHL Variable Company Phoenix Personal Income Annuity 14.00% 10 Years PHL Variable Company Phoenix Personal Retirement Choice 8.00% 12 Years PHL Variable Company Phoenix Reflections Gold Bonus 8.00% 8 Years PHL Variable Company Phoenix Reflections Gold Bonus 3.00% 8 Years PHL Variable Company Premier Lifestyle Annuity 10.00% 7 Years PHL Variable Company Secure Lifestyle Bonus Annuity 10.00% For Life Protective Life Insurance Company Protective IA II 5-Year 7.00% 10Years Protective Life Insurance Company Protective IA II 7-Year 7.00% 10Years Protective Life Insurance Company Protective IA II 10-Year 7.00% 10Years Security Benefit Life Foundations Annuity 7 8.50% 15 Years Security Benefit Life Secure Income Annuity 7.00% 10 Years Security Benefit Life Total Value Annuity 4.00% 10 Years Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 72 AR067030 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 134 of 153 Wink’s Product Report 4th Quarter, 2014 Company Product Rollup Rollup Deferral Sentinel Security Life Ins. Co. Summit Bonus Index Annuity 6.00% 10 Years Voya Insurance and Annuity Secure Index Five 6.00% 10 Years Voya Insurance and Annuity Secure Index Opportunities Plus 6.00% 10 Years Voya Insurance and Annuity Secure Index Outlook 6.00% 10 Years Voya Insurance and Annuity Secure Index Seven 6.00% 10 Years Free Withdrawals Every indexed annuity available today allows 100% free withdrawals at the end of the surrender period, and has some type of free withdrawal feature during the surrender charge. Today, 92% of indexed annuity products offer a 10% annual free withdrawal feature. The most recent trend in penalty-free withdrawals is to restrict the penalty-free withdrawal amount to less than 10% of the account value. One method: allow for more attractive rates, should the client opt for a 5% annual penalty-free withdrawal option as opposed to the standard 10% penalty-free withdrawals- as Midland National and North American offer on a series of their indexed annuities. On the other hand, some companies offer 5% annual withdrawals beginning in year two, as Physicians Mutual has long featured on five of their indexed annuities. This is the method preferred by most that have fallen in-line with the recent trend to restrict liquidity. American Equity, Athene Annuity and Life Company, Great American, Midland National, North American, Phoenix Life, Sentinel Security Life, and Voya are among the companies offering at least one indexed annuity with only a 5% penalty free withdrawal provision. This change in product development is undoubtedly a response to low interest rates; insurers are restricting liquidity in an effort to offer more attractive rates, caps, etc. Although most products permit penalty-free withdrawals beginning in year two, more than one third of products offer 10% penalty-free withdrawals in the first year. Interestingly, Athene Annuity’s Performance Elite Plus series, National Western Life’s Ultra Classic and Sagicor Life’s Platinum Series Sage Advantage Fixed Indexed SPDA permit up to a cumulative amount of 50% penalty-free withdrawals in a single year, if the 10% penalty-free withdrawal has not been previously utilized. One of the newest entrants in the indexed annuity market, Thrivent Financial, has a progressive approach with their cumulative penalty-frees; offering 10% withdrawals, which increase to 20% in the event the 10% has not been previously utilized, which then increases to 25% when the 10% withdrawal has not be exercised in the previous two contract years. Likewise, American Equity’s Foundation Gold product permits up to a cumulative 10% penalty-free withdrawal in a single year, if the 5% penalty-free withdrawal has not been previously utilized. Both Midland National Life and North American Company offer an optional rider that can provide the annuitant with cumulative penalty-free withdrawals of 20% in a single year, should the penalty-free amount not be withdrawn the previous year (this rider also provides three other benefits; rider carries an annual account value charge). Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 73 AR067031 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 135 of 153 Wink’s Product Report 4th Quarter, 2014 Maximum Issue Age Most all indexed annuities have a maximum issue age for non-qualified premium of 80 or 85. Forethought’s Bonus Advantage has a minimum issue age of only 55 and four products have a maximum issue age as low as age 70. Note that many carriers use an issue age that is not a “round number,” for practical purposes (i.e. so that the product term, when added to the issue age does not exceed a maximum age of 90). No. of Products Available by Issue Age 310 275 240 144 142 7 90 85 82 80 77 75 Age 75 Age 80 Age 85 American General (4) Allianz Life (8) American Equity (1) EquiTrust Life Insurance Co. (2) American Equity (7) American General (5) Life Insurance Co. of the SW (1) American General (3) American United Life (3) Midland National Life (10) American National (3) Americo (7) North American Company (8) Americo (3) Ameritas Life (1) Physicians Life (1) Athene Annuity & Life Assur. (9) Annuity Investors Life (4) US Life Ins. Co. in the City of NY(1)Athene Annuity and Life Co. (1) Bankers Life & Casualty (2) Eagle Life Insurance Company (3) CUNA Mutual Life (3) Age 90 EquiTrust Life Insurance Co. (4) Farm Bureau Life Insurance Company (1) Nationwide (1) Fidelity & Guaranty Life (3) Fidelity & Guaranty Life (18) The Standard (4) Forethought Life (8) Fidelity & Guaranty Life of New York (2) Symetra Financial (2) Genworth Life & Annuity (2) Forethought Life (4) Guggenheim Life & Annuity (3) Genworth Life & Annuity (2) Horace Mann (2) Great American Life (9) Life Insurance Co. of the SW (5) Greenfields Life Insurance Company (1) Lincoln Life & Annuity of NY (1) Integrity Life Insurance Company (2) Lincoln National Life (2) Jackson National Life (5) National Western Life (8) Lafayette Life (2) Nationwide Life & Annuity (1) Life Insurance Co. of the Southwest (2) Oxford Life (3) Lincoln Life & Annuity of NY (2) PHL Variable Company (1) Lincoln National Life (5) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 74 AR067032 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 136 of 153 Wink’s Product Report 4th Quarter, 2014 Age 80 Age 85 Physicians Life (3) Midland National Life (11) Security Benefit Life (4) National Western Life (1) Sentinel Security Life Ins. Co. (1) North American Company (3) The Standard (1) Pacific Life Insurance Company (3) Voya Insurance and Annuity Co. (6)PHL Variable (14) Principal Life (1) Protective Life Insurance Company (3) Reliance Standard (3) Sagicor Life (1) Thrivent Financial for Lutherans (3) Washington National (1) Minimum Guarantees* The vast majority of index products today are based on the NAIC model for calculating Minimum Guaranteed Surrender Values, which is based on the 5-Year Constant Maturity Treasury Rate. This method credits a percentage of the premium between 87.5% and 100% with a rate of interest between 1% and 3%. Today 91% of indexed annuity products offered use some variation of this method for calculating minimum guarantees. In fact, all ten of the indexed annuities that launched this quarter feature minimum guarantees based on the NAIC model. *Year one MGSVs listed. Based On 90% Based On NAIC Model (% of premium @ 1-3%) American United Life Freedom Builder Series (1%) Allianz Life 222 Annuity (87.5%) Annuity Investors FlexMax 14 (1%) Allianz Life Core Income 7 Annuity (87.5%) Annuity Investors Life FlexMax Plus (1%) Allianz Life Signature 7 Annuity (87.5%) Annuity Investors SingleMax 10 (1%) Allianz Life Endurance Plus (87.5%) Great American Life Safe Outlook (1%) Allianz Life Essential Income 7 (87.5%) Nationwide Clear Horizon (1.5%) Allianz Life MasterDex X (87.5%) American Equity Advantage Gold (84%) Based On 100% American Equity Benefit Gold (87.5%) Great American Life American Valor 10 (1%) American Equity Bonus Gold (80%) Great American Life American Legend III (100%) American Equity CT Gold (87.5%) Reliance Standard Keystone Index Annuity Series (1%) American Equity Foundation Gold (87.5%) Sagicor Life Platinum Series Sage Advantage (2%) American Equity Heritage Gold (87.5%) American Equity Integrity Gold (87.5%) Based on Other Factors American Equity Retirement Gold (87.5%) Allianz 360 Annuity (87.5% @ 1.35%) American Equity Traditions Gold (87.5%) Allianz 365i Annuity (87.5% @ 1.95%) American General Life AG Choice Index 10 Annuity (87.5%) AGL WN Power Index Choice Annuity (87.5% @ 1%) American General Power Advantage 7 (87.5%) Guggenheim L&A Preserve Plus 3-Yr (87.5% @ 1%) American General Power Advantage 10 (87.5%) Guggenheim L&A Preserve Plus 5-Yr (87.5% @ 1%) American General Power Index Plus Annuity (87.5%) Guggenheim L&A Preserve Plus 7-Yr (87.5% @ 1%) American General Power Index Plus Income Annuity (87.5%) Lincoln NY OptiChoice NY 5 1-3% Gteed Annual Return American General Power Index 5 Plus Annuity (87.5%) Lincoln NY OptiChoice NY 7 1-3% Gteed Annual Return American General Power Index 7 Plus Annuity (87.5%) Lincoln NY OptiChoice NY 9 1-3% Gteed Annual Return American General Power Select Builder (87.5%) Midland National Life Prosper Series (87.5% @ 1%) American General Power Select Plus Income (87.5%) US Life Power Index 7-Year (1% Gteed Annual Return) American General Power 7 Protector (87.5%) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 75 AR067033 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 137 of 153 Wink’s Product Report 4th Quarter, 2014 Based On NAIC Model (% of premium @ 1-3%) American General Power 7 Protector Plus Income (87.5%) American General Power 10 Protector (87.5%) American General Power 10 Protector Plus Income (87.5%) American National Strategy Indexed Annuity Plus 7 (87.5%) American National Strategy Indexed Annuity Plus 10 (87.5%) American National Value-Lock 10 (90%) Ameritas Life Compass Index Annuity (87.5%) Americo Future Provider (100%) Americo Future Provider Bonus (100%) Americo LibertyMark 7 (100%) Americo LibertyMark 10 (100%) Americo LibertyMark 10 Plus (100%) Americo LibertyMark 10 LT (100%) Americo LibertyMark 10 LT Plus (100%) Americo Ultimate One Index 7 (100%) Americo Ultimate One Index 9 (100%) Americo Ultimate One Index 9 Bonus (100%) Annuity Investors Life FlexMax (100%) Athene Annuity & Life Assurance Performance Elite (87.5%) Athene Ann. & Life Assurance Performance Elite 10 (87.5%) Athene Ann. & Life Assur. Performance Elite 10 Plus (87.5%) Athene Ann. & Life Assurance Performance Elite 14 (87.5%) Athene Ann. & Life Assur. Performance Elite 14 Plus (87.5%) Athene Ann. & Life Assur. Performance Elite Plus (87.5%) Athene Ann. & Life Assurance Choice 10 (87.5%) Athene Ann. & Life Assurance Enhanced Choice 8 (87.5%) Athene Ann. & Life Assurance Enhanced Choice 12 (87.5%) Athene Annuity and Life BalancedChoice Annuity 8 (87.5%) Athene Annuity and Life BalancedChoice Ann. 10FL (87.5%) Athene Annuity and Life BalancedChoice Ann. 10S (87.5%) Athene Annuity and Life BalancedChoice Annuity 12 (87.5%) Athene Annuity and Life Benefit 10 (87.5%) Athene Annuity and Life Income Preferred Bonus (87.5%) Athene Annuity and Life Income Preferred Ten (87.5%) Athene Annuity and Life TargetHorizon 5 (87.5%) Athene Annuity and Life TargetHorizon 10 (87.5%) Athene Annuity and Life TargetHorizon 10 Select (87.5%) Athene Annuity and Life TargetHorizon15 (87.5%) BLC Security Builder Premium Bonus IA (87.5%) BLC Security Builder GrowthPoint (87.5%) CUNA Mutual Life MEMBERS Series (100%) Eagle Life Insurance Company Eagle Select 6 (90%) Eagle Life Insurance Company Eagle Select 8 (90%) Eagle Life Insurance Company Eagle Select 10 (90%) EquiTrust Builder Bonus Index (87.5%) EquiTrust MarketBooster Index (87.5%) EquiTrust MarketPower Bonus Index (87.5%) EquiTrust MarketTen Bonus Index (100%) EquiTrust MarketTwelve Bonus Index (87.5%) EquiTrust MarketValue Index (87.5%) Farm Bureau Life Income Guard Indexed Annuity (87.5%) Fidelity & Guaranty AccumulatorPlus 10 (87.5%) Fidelity & Guaranty AccumulatorPlus 14 (87.5%) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 76 AR067034 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 138 of 153 Wink’s Product Report 4th Quarter, 2014 Based On NAIC Model (% of premium @ 1-3%) Fidelity & Guaranty Life AdvanceMark Ultra 10 (87.5%) Fidelity & Guaranty Life AdvanceMark Ultra 10 LT (87.5%) Fidelity & Guaranty Life AdvanceMark Ultra 14 (87.5%) Fidelity & Guaranty Life FG Index-Choice 10 (87.5%) Fidelity & Guaranty Life Income & WealthBuilder 7 (87.5%) Fidelity & Guaranty Life Income & WealthBuilder 10 (87.5%) Fidelity & Guaranty Life LegendMark Series (87.5%) Fidelity & Guaranty Life Performance Pro (87.5%) Fidelity & Guaranty Life Prosperity Elite Series (87.5%) Fidelity & Guaranty Life SpectraMark Series (87.5%) Fidelity & Guaranty of NY FGNY Index-Safety 7 (100%) Fidelity & Guaranty of NY NY Index-Choice 10 (100%) Forethought Bonus Advantage (87.5%) Forethought ForeAccumulation 6-Year (87.5%) Forethought ForeAccumulation 8-Year (87.5%) Forethought ForeFront Index Bonus-ForeSpending (87.5%) Forethought ForeFront Index Choice-ForeSaving (87.5%) Forethought ForeFront Index Choice-ForeSharing (87.5%) Forethought ForeFront Index Choice-ForeSpending (87.5%) Forethought ForeIncome 7-Year (87.5%) Forethought ForeIncome 9-Year (87.5%) Forethought Life Income 125+ (87.5%) Forethought Life Income 150+ (87.5%) Forethought Life Index Bonus 115 (87.5%) Genworth Life & Annuity SecureLiving Growth+ (87.5%) Genworth Life & Annuity SecureLiving Index 5 (87.5%) Genworth Life & Annuity SecureLiving Index 7 (87.5%) Genworth Life & AnnuitySecureLiving Index 10 Plus (87.5%) Great American Life American Custom 10 (90%) Great American Life American Freedom Liberty 6 (100%) Great American Life American Freedom Liberty 8 (100%) Great American Life AssuranceProtect 6 (100%) Great American Life AssuranceSelect 7 (100%) Great American Life Safe Return (100%) Greenfields Life Income Guard Indexed Annuity (87.5%) Hoarce Mann Destination FIA 6-Year (87.5%) Hoarce Mann Destination FIA 9-Year (87.5%) Integrity Life Insurance Co. Indextra FIA 7-Year (87.5%) Integrity Life Insurance Co. Indextra FIA 10-Year (87.5%) Jackson AscenderPlus Select 7- Yr (90%) Jackson AscenderPlus Select 10- Yr (90%) Jackson Elite Choice 8- Yr (100%) Jackson Elite Choice 10- Yr (100%) Jackson Elite Choice Rewards 8- Yr (100%) Jackson Elite Choice Rewards 10- Yr (100%) Jackson Select Annual Reset 7- Yr (100%) Lafayette Life Marquis Centennial 7 (87.5%) Lafayette Life Marquis Centennial 10 (87.5%) Life Ins. Co. of the SW Lone Star SecurePlus Elite (90%) Life Ins. Co. of the SW SecurePlus Elite (87.5%) Life Ins. Co. of the SW SecurePlus Elite 3 (90%) Life Ins. Co. of the SW SecurePlus Elite 5 (90%) Life Ins. Co. of the SW SecurePlus Gold (87.5%) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 77 AR067035 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 139 of 153 Wink’s Product Report 4th Quarter, 2014 Based On NAIC Model (% of premium @ 1-3%) Life Ins. Co. of the SW SecurePlus Marquee 3 (87.5%) Life Ins. Co. of the SW SecurePlus Marquee 8 (87.5%) Life Ins. Co. of the SW SecurePlus Paramount 5 (87.5%) Life Ins. Co. of the SW SecurePlus Platinum (87.5%) Life Ins. Co. of the SW SecurePlus Preferred 2 (87.5%) Life Ins. Co. of the SW SecurePlus Preferred 6 (87.5%) Life Ins. Co. of the SW SecurePlus Reliance (87.5%) Lincoln National Life New Directions 6 (87.5%) Lincoln National Life New Directions 8 (87.5%) Lincoln National Life OptiChoice 5 (87.5%) Lincoln National Life OptiChoice 7 (87.5%) Lincoln National Life OptiChoice 9 (87.5%) Lincoln National Life OptiPoint 8 (87.5%) Lincoln National Life OptiPoint 10 (87.5%) Midland National Life Capstone Series (87.5%) Midland National Life Innovator Choice Series (87.5%) Midland National Life LiveWell Fixed Index Annuity (87.5%) Midland National Life Mainstreet Four (87.5%) Midland National Life MNL IncomeVantage 10 (87.5%) Midland National Life MNL IncomeVantage 14 (87.5%) Midland National Life MNL RetireVantage 10 (87.5%-100%) Midland National Life MNL RetireVantage 14 (87.5%-100%) Midland National Life MNL SecureVantage 10 (87.5%) Midland National Life MNL SecureVantage 14 (87.5%) Midland National Life Endeavor 4 (87.5% - 100%) Midland National Life Endeavor 6 (87.5% - 100%) Midland National Life Endeavor 8 (87.5% - 100%) Midland National Life Endeavor 8 Plus (87.5%-100%) Midland National Life Endeavor 12 (87.5%-100%) Midland National Life Endeavor 12 Plus (87.5%-100%) Midland National Life Paragon Plus Series (87.5%) Midland National Life Pinnacle (100%) Midland National Life Prosperity Choice Series (87.5%) Midland National Life Select Series (87.5%) National Western Life Global Lookback (87.5%) National Western Life Impact Series (87.5%) National Western Life Ultra Series (87.5%) Nationwide Life & Annuity Nationwide New Heights (87.5%) North American Charter Series (87.5%) North American Freedom Choice Series (87.5%) North American NAC IncomeChoice 10 (87.5%) North American NAC RetireChoice 10 (87.5%-100%) North American NAC RetireChoice 14 (87.5%-100%) North American NAC SecureChoice 10 (87.5%) North American NAC SecureChoice 14 (87.5%) North American PerformanceChoice 8 (87.5%-100%) North American PerformanceChoice 8 Plus (87.5%-100%) North American PerformanceChoice 12 (87.5%-100%) North American PerformanceChoice 12 Plus (87.5%-100%) North American Pillar (100%) North American Precision Series (87.5%) North American Prizm Plus Series (87.5%) North American Ten (100%) Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 78 AR067036 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 140 of 153 Wink’s Product Report 4th Quarter, 2014 Based On NAIC Model (% of premium @ 1-3%) Oxford Life Royal Select Fixed IA (87.5%) Oxford Life Select Fixed IA (87.5%) Oxford Life Silver Select Fixed IA (87.5%) Pacific Life Pacific Index Choice Series (100%) PHL Variable CommandMark Series (87.5%) PHL Variable Personal Protection Choice (87.5%) PHL Variable Phoenix Index Select Gold Bonus (87.5%) PHL Variable Phoenix Next Generation Annuity (87.5%) PHL Variable Phoenix Next Generation Bonus Ann. (87.5%) PHL Variable Phoenix Personal Income Annuity (87.5%) PHL Variable Phoenix Personal Retirement Choice (87.5%) PHL Variable Phoenix Reflections Gold Bonus (87.5%) PHL Variable Premier Lifestyle Annuity (87.5%) PHL Variable Secure Lifestyle Bonus Annuity (87.5%) Physicians Life Vista Accelerator Series (90%) Physicians Life Vista Advantage Series (90%) Principal Life Principal Performance Annuity 7 (90%) Protective Life Protective IA II Series (100%) Security Benefit Life Foundations Annuity 5 (87.5%) Security Benefit Life Foundations Annuity 7 (87.5%) Security Benefit Life Secure Income Annuity (87.5%) Security Benefit Life Total Value Annuity (87.5%) Sentinel Security Life Summit Bonus Index Annuity (87.5%) Symetra Financial Edge Pro FIA Series (100%) The Standard Index Growth Annuity 5 (100%) The Standard Index Growth Annuity 7 (100%) The Standard Index Select Annuity 5 (87.5%) The Standard Index Select Annuity 7 (87.5%) The Standard Index Select Annuity 10 (87.5%) Thrivent Financial Security Preference FIA 5-Year (87.5%) Thrivent Financial Security Preference FIA 7-Year (87.5%) Thrivent Financial Security Preference FIA 9-Year (87.5%) Voya Secure Index Five (87.5%) Voya Secure Index Opportunities Plus (87.5%) Voya Secure Index Outlook (87.5%) Voya Secure Index Seven (87.5%) Voya Wealth Builder Eight Annuity (87.5%) Voya Wealth Builder Six Annuity (87.5%) Washington National Life Patriot (87.5%) Minimum Premiums Today, five annuities have minimum premiums as high as $50,000, and two have minimum premiums of at least $75,000. The most popular minimum premium is $10,000, which accounts for the vast majority of products on the market. Another category that many products fall into is minimum premiums of $10,000 for non-qualified funds / $5,000 for qualified fund minimums. On the other end of the spectrum, Lafayette Life has two annuities with minimum premiums of only $1,000. Minimum premiums of greater than $10,000 have become much more prevalent since 2009. Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 79 AR067037 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 141 of 153 Wink’s Product Report 4th Quarter, 2014 Moving Parts/Pricing Levers Not a single new crediting method had been developed in 2007, 2008, 2009, or 2010 …until Sammons’ inverse performance triggered crediting method hit the streets late-October of that year. It was nearly four years until a new crediting method was brought into the indexed annuity market upon the introduction of this method, which credits a positive gain if the performance of the index is negative (or stays the same) over a one-year period. And now it has been nearly another four years without the introduction of a new crediting method in the indexed annuity market. Variations of monthly averaging, term end point, annual point-to-point, and performance triggered have been utilized to make the rainbow crediting strategy/multiple index strategy popular. As a result of designs that do not “fit the mold” from a product development standpoint, you will see products on this list with moving parts other than Participation Rates, Caps, and Asset Fees. Allianz Life Allianz 222 Annuity Caps and Asset Fees reset annually Allianz 360 Annuity Caps and Asset Fees reset annually Allianz 365i Annuity Caps and Asset Fees reset annually Allianz Core Income 7 Annuity Caps and Asset Fee reset annually Allianz Signature 7 Annuity Caps and Asset Fee reset annually Endurance Plus Caps and Asset Fee reset annually Essential Income 7 Caps reset annually MasterDex X Caps and Asset Fee reset annually American Equity Investment Life Advantage Gold Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term Benefit Gold Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term Bonus Gold Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term CT Gold Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term Foundation Gold Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term Heritage Gold Cap resets annually Integrity Gold Participation Rates & Caps reset annually, Specified Rate resets each 1-year index term Retirement Gold Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term Traditions Gold Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term American General Life AG Choice Index 10 Annuity Caps reset annually Power Advantage Series Caps and Asset Fee reset annually Power Index Plus Annuity Caps reset annually Power Index Plus Income Annuity Caps reset annually Power Index 5 Plus Annuity Caps reset annually Power Index 7 Plus Annuity Caps reset annually Power Protector Series Caps and Asset Fee reset annually Power Select Series Caps reset annually and Asset Fees annually & biennially Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 80 AR067038 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 142 of 153 Wink’s Product Report 4th Quarter, 2014 American General Life Power Index Choice Annuity Cap resets annually American National Life Strategy Indexed Annuity Plus 7 Participation Rates & Caps reset annually, triennially & quiqennially Strategy Indexed Annuity Plus 10 Participation Rates & Caps reset annually, triennially & quiqennially Value-Lock 10 No Moving Parts American United Life Freedom Builder 5 Participation Rates & Caps reset annually Freedom Builder 7 Participation Rates & Caps reset annually Freedom Builder 9 Participation Rates & Caps reset annually Americo Life Future Provider Series Specified Rate resets each 1-year index term, Participation Rates, Cap and Asset Fees reset annually LibertyMark Series Participation Rates reset annually, biennially & triennially & Caps reset annually Ultimate One Index Series Participation Rates & Caps reset annually Ameritas Life Compass Index Annuity Caps reset annually Annuity Investors Life FlexMax Series Caps reset annually SingleMax 10 Caps reset annually Athene Annuity & Life Assurance Company ATHENE Performance Elite Series Caps reset annually & biennially & Asset Fee resets biennially Choice 10 Caps reset annually Enhanced Choice Series Caps reset annually Athene Annuity and Life Company BalancedChoice Annuity 8 Allocation Percentage & Fixed Rate reset biennially BalancedChoice Annuity 10FL Allocation Percentage & Fixed Rate reset biennially BalancedChoice Annuity 10S Allocation Percentage & Fixed Rate reset biennially BalancedChoice Annuity 12 Allocation Percentage & Fixed Rate reset biennially Benefit 10 Caps reset annually Income Preferred Series Caps reset annually TargetHorizon Series Caps and Asset Fees reset annually Bankers Life & Casualty Security Builder Growth Point Cap resets annually Sec. Builder Premium Bonus IA Participation Rate resets annually CUNA Mutual Life MEMBERS Index Series Cap resets annually Eagle Life Insurance Company Eagle Select Series Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 81 AR067039 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 143 of 153 Wink’s Product Report 4th Quarter, 2014 EquiTrust Life Insurance Company Builder Bonus Index Participation Rate resets annually & Caps reset annually & biennially MarketBooster Index Participation Rate and Caps reset annually MarketPower Bonus Index Participation Rate resets annually & Caps reset annually & biennially MarketTen Bonus Index Participation Rate resets annually & Caps reset annually & biennially MarketTwelve Bonus Index Participation Rate resets annually & Caps reset annually & biennially EquiTrust Life Insurance Company MarketValue Index Participation Rate resets annually & Caps reset annually & biennially Farm Bureau Life Insurance Company Income Guard Indexed Annuity Caps reset annually Fidelity & Guaranty Life AdvanceMark Ultra Series Caps reset annually & Asset Fee resets triennially FG AccumulatorPlus Series Caps reset annually FG Index-Choice 10 Caps reset annually, biennially & triennially Income and WealthBuilder 7 Caps reset annually, Specified Rate resets each 1-year index term Income and WealthBuilder 10 Caps reset annually, Specified Rate resets each 1-year index term LegendMark Series Caps reset annually Performance Pro Caps reset annually, biennially & triennially & Asset Fee resets every five years Prosperity Elite Series Caps reset annually, Specified Rate resets each 1-year index term Safe Income Plus Caps reset annually, Specified Rate resets each 1-year index term SpectraMark Series Caps reset annually & triennially Fidelity & Guaranty Life of New York FGNY Index- Safety 7 Caps reset annually FGNY Index-Choice 10 Caps reset annually Forethought Life Bonus Advantage Caps resets annually ForeAccumulation 6-Year Caps reset annually & Asset Fee resets triennially ForeAccumulation 8-Year Caps reset annually & Asset Fee resets triennially ForeFront Series Caps resets annually ForeIncome 6-Year Caps reset annually & Asset Fee resets triennially ForeIncome 8-Year Caps reset annually & Asset Fee resets triennially Forethought Income 125+ Caps reset annually Forethoguht Income 150+ Caps reset annually & Asset Fee resets triennially Index Bonus 115 Caps reset annually Genworth Life & Annuity Insurance Company SecureLiving Growth+ Specified Rates reset each 1-year index term, Caps reset annually SecureLiving Index 5 Specified Rate reset each 1-year index term, Caps reset annually SecureLiving Index 7 Specified Rate reset each 1-year index term, Caps reset annually SecureLiving Index 10 Plus Specified Rate reset each 1-year index term, Caps reset annually Great American Life American Custom 10 Participation Rate & Caps reset annually American Freedom Liberty 6 Caps reset annually American Freedom Liberty 8 Caps reset annually American Legend III Caps reset annually and over 18 months American Valor 10 Caps reset annually AssuranceProtect 6 Cap resets annually Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 82 AR067040 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 144 of 153 Wink’s Product Report 4th Quarter, 2014 Great American Life AssuranceSelect 7 Caps reset annually Safe Outlook Caps reset annually Safe Return Caps reset annually Greenfields Life Insurance Company Income Guard Indexed Annuity Caps reset annually Guggenheim Life & Annuity Preserve Plus 3-Year Cap resets triennially Preserve Plus 5-Year Cap resets every five years Preserve Plus 7-Year Cap resets every seven years Horace Mann Life Insurance Company Destination FIA Series Participation Rate & Cap reset annually Integrity Life Insurance Company Indextra FIA 7-Year Participation Rate resets triennially & Caps reset annually Indextra FIA 10-Year Participation Rate resets triennially & Caps reset annually Jackson National Life Elite Choice Series Caps reset annually & biennially Elite Choice Rewards Series Caps reset annually & biennially Jackson AscenderPlus Select Series Caps reset annually Select Annual Reset 7-Year Caps reset annually Lafayette Life Marquis Centennial Series Caps resets annually Life Insurance Co. of the Southwest Lone Star SecurePlus Elite Participation Rate & Cap reset annually SecurePlus Elite Participation Rate & Cap reset annually SecurePlus Elite 3 & 5 Caps reset annually SecurePlus Gold Participation Rate & Cap reset annually SecurePlus Marquee 3 & 8 Participation Rates & Caps reset annually SecurePlus Paramount 5 Participation Rate & Caps reset annually SecurePlus Platinum Participation Rate & Cap reset annually SecurePlus Preferred 2 & 6 Participation Rates & Caps reset annually SecurePlus Reliance Participation Rate & Cap reset annually Lincoln Life & Annuity Co. of NY OptiChoice NY 5, 7 & 9 Base and Specified Rate reset each 1-year index term Lincoln National Life New Directions 6 & 8 Specified Rate resets each 1-year index term, Cap resets biennially OptiChoice 5, 7 & 9 Specified Rate resets each 1-year index term, Cap and Asset Fee reset annually OptiPoint 8 & 10 Specified Rate resets each 1-year index term, Caps reset biennially Midland National Life Capstone Series Caps reset annually Innovator Choice Series Caps and Asset Fees reset annually LiveWell Fixed Index Annuity Cap resets annually Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 83 AR067041 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 145 of 153 Wink’s Product Report 4th Quarter, 2014 Midland National Life Mainstreet Four Caps reset annually MNL Endeavor 4 & 6 Caps reset annually & biennially MNL Endeavor 8 & 12 Series Caps reset annually MNL IncomeVantage Series Participation Rates, Caps and Asset Fees reset annually, Specified Rate resets each 1-year index term MNL Pinnacle Participation Rates & Caps reset annually MNL Prosper Series Specified Rate resets each 1-year index term, Caps reset annually & biennially MNL RetireVantage Series Participation Rates, Caps & Asset Fees reset annually, Specified Rate resets each 1-year index term MNL SecureVantage Series Participation Rates, Caps & Asset Fees reset annually Paragon Plus Series Participation Rates & Caps reset annually Prosperity Choice Series Participation Rates & Caps reset annually Select Series Caps resets annually National Western Life Global Lookback Participation Rates, Caps & Asset Fees reset annually NWL Impact Series Participation Rates, Caps & Asset Fees reset annually Ultra Benefit Participation Rate & Asset Fee reset annually Ultra Classic Participation Rate, Cap & Asset Fee reset annually Ultra Future Participation Rate, Cap & Asset Fee reset annually Ultra Value Participation Rate, Cap & Asset Fee reset annually Nationwide Clear Horizon Cap resets annually Nationwide Life & Annuity Insurance Company Nationwide New Heights Allocation Percentage & Fixed Rate reset biennially North American Company Charter Series Caps reset annually Freedom Choice Series Caps reset annually NA Performance Choice Series Caps reset annually NAC IncomeChoice 10 Participation Rates reset annually & Caps reset annually & triennially, Specified Rate resets each 1-year index term NAC RetireChoice Series Participation Rates reset annually & Caps reset annually & biennially, Specified Rate resets each 1-year index term NAC SecureChoice Series Participation Rates reset annually & triennially & Caps reset annually North American Pillar Participation Rates & Caps reset annually Precision Series Participation Rates & Caps reset annually Prizm Plus Series Participation Rates & Caps reset annually Ten Cap resets annually Oxford Life Royal Select Fixed IA Caps reset annually Select Fixed IA Caps reset annually Silver Select Fixed IA Caps reset annually Pacific Life Pacific Index Choice Series Caps reset annually & biennially Pacific Index Select Series Caps resets annually, Specified Rate resets each 1-year index term Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 84 AR067042 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 146 of 153 Wink’s Product Report 4th Quarter, 2014 PHL Variable CommandMark Series Caps resets annually Personal Protection Choice Participation Rates, Caps & Asset Fees resets annually & biennially Phoenix Index Select Gold Bonus Participation Rates, Caps & Asset Fees resets annually & biennially Phoenix Next Generation Annuity Specified Rate resets each 1-year index term, Caps reset annually & biennially Phoenix Next Generation Bonus Specified Rate resets each 1-year index term, Caps reset annually & biennially Phoenix Personal Income Annuity Participation Rates, Caps & Asset Fees resets annually & biennially PHX Personal Retirement Choice Participation Rates, Caps & Asset Fees resets annually & biennially Phoenix Reflections Gold Bonus Specified Rate resets each 1-year index term, Participation Rate & Caps reset annually Premier Lifestyle Annuity Participation Rates & Caps reset annually and biennially Secure Lifestyle Bonus Annuity Participation Rates & Caps reset annually and biennially Physicians Life Vista Index Accelerator Series Caps resets annually Vista Index Advantage Series Caps resets annually Protective Life Insurance Company Protective IA II Series Specified Rate resets each 1-year index term, Cap resets annually Reliance Standard Keystone Index Series Caps reset annually Sagicor Life Platinum Series Sage Advantage Participation Rate & Cap reset annually Security Benefit Life Foundations Annuity Series Caps reset annually Secure Income Annuity Caps reset annually & Asset Fee resets biennially Total Value Annuity Cap resets annually & Asset Fees reset every five years Sentinel Security Life Insurance Company Summit Bonus Index Annuity Caps reset annually The Standard Index Growth Series Cap resets annually Index Select Series Cap resets annually Symetra Financial Edge Pro FIA Series Caps reset annually Thrivent Financial for Lutherans Security Preference FIA 5-Year Cap resets annually Security Preference FIA 7-Year Cap resets annually Security Preference FIA 9-Year Cap resets annually The United States Life Ins. Co. in the City of NY Power Index 7-Year Cap resets annual Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 85 AR067043 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 147 of 153 Wink’s Product Report 4th Quarter, 2014 Voya Insurance and Annuity Company Voya Secure Index Five Caps reset annually Voya Secure Index Opp. Plus Caps reset annually Voya Secure Index Outlook Caps reset annually Voya Secure Index Seven Caps reset annually Voya Wealth Builder Eight AnnuityCaps reset annually, Specified Rate resets each 1-year index term Voya Wealth Builder Six Annuity Caps reset annually, Specified Rate resets each 1-year index term Washington National Patriot Caps reset annually Multiple Indices Although the S&P 500 index is the dominant external index utilized on indexed annuities, other indices are used. Today 24 carriers offer equity or bond indices beyond the S&P 500. Nine of these carriers offer strategies based on an international index specifically. Phoenix Life offers products based on iShares bond indices as well as a series of indexed annuities benchmarked to the Gold Commodity. Symetra features a commodities index on their Edge Pro indexed annuities; the S&P GSCI. Of the more unique methods is Jackson National’s proprietary benchmark, the Multi-Strategy Index* and Security Benefit Life’s own proprietary Annuity Linked Trader Vic Index**, which is offered on the Total Value Annuity. Hybrid indices, or indexes which consist of other indexes, have become a recent trend, as insurance companies seek a method for their marketing groups to promote “uncapped” crediting methods. Often these new hybrid indices are “volatility controlled.” 3-Month London Interbank Offered Rate Fixed Account Voya Insurance and Annuity Company Allianz Life American Equity Investment Life 10-Year U.S. Swap Rate American General PHL Variable American National Life American United Life Afternoon (PM) London Gold Market Fixing Price Americo Americo Ameritas Life Midland National Life Annuity Investors Life North American Company Athene Annuity & Life Assurance Athene Annuity and Life Company Annuity Linked TVI Index** Bankers Life & Casualty Security Benefit Life Eagle Life Insurance Company EquiTrust Barclays ARMOUR II Farm Bureau Life Insurance Co. Forethought Life Fidelity & Guaranty Life Fidelity & Guaranty Life of NY Barclays Dynamic Balance Forethought Life Allianz Life Genworth Life Great American Life CS Tactical Multi Asset Index Greenfields Life Insurance Company PHL Variable Guggenheim Life & Annuity Horace Mann DJ Us Real Estate Risk Control 10% Index Integrity Life Insurance Company Fidelity & Guaranty Life Jackson National Life Lafayette Life Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 86 AR067044 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 148 of 153 Wink’s Product Report 4th Quarter, 2014 Dow Jones U.S. Real Estate Fixed Account Americo Life Insurance Co. of the Southwest Allianz Life Lincoln Life & Annuity Co. of NY American Equity Investment Life Lincoln National Life Athene Annuity & Life Assurance Midland National Life Horace Mann National Western Life Midland National Life Nationwide Life Insurance Co. North American Company Nationwide Life & Annuity North American Company Euro Stoxx 50 Oxford Life Allianz Life Pacific Life Athene Annuity and Life Company PHL Variable Physicians Life Protective Life Insurance Company Reliance Standard Euro Stoxx 50 Sagicor Life Midland National Life Security Benefit Life National Western Life Sentinel Security Life Ins. Co. North American Company Symetra Financial PHL Variable The Standard Sagicor Life Thrivent Financial for Lutherans The US Life Ins. Co. in the City of NY Voya Insurance and Annuity Company Voya Insurance and Annuity Company Washington National FTSE 100 Allianz Life Gold Commodity Fidelity & Guaranty Life PHL Variable GS Momentum Builder Multi-Asset Class Index Integrity Life Insurance Company Hang Seng Athene Annuity and Life Company Midland National Life National Western Life North American Company Sagicor Life iShares Barclays Aggregate Bond Fund PHL Variable iShares MSCI Hong Kong Index Fund PHL Variable Lenwood Volatility Control Index Athene Annuity & Life Assurance ML Strategic Balanced Index American General Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 87 AR067045 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 149 of 153 Wink’s Product Report 4th Quarter, 2014 MSCI ACWI Pacific Life MSCI EAFE Ameritas Life MSDA Index Security Benefit Life Multi-Strategy Index* Jackson National NASDAQ 100 Allianz Life Americo Midland National Life North American Company PHL Variable Nikkei 225 National Western Life Russell 2000 Allianz Life Ameritas Life Life Insurance Co. of the Southwest Midland National Life North American Company Sagicor Life Shiller Barclays Cape US Sector Risk Controlled 10% USD Total Return Index Athene Annuity and Life Company S&P 500 Aristocrats Daily Risk Control 5% Index American Equity Investment Life Eagle Life Insurance Company S&P 500 Average Daily Risk Control 10% Excess Return Americo S&P 500 Daily Risk Control 5% Total Return Athene Annuity and Life Company S&P 500 Daily Risk Control 10% Total Return Athene Annuity and Life Company S&P GSCI Symetra Financial S&P 500 Low Volatility Daily Risk Control 5% Midland National Life North American Company Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 88 AR067046 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 150 of 153 Wink’s Product Report 4th Quarter, 2014 S&P Midcap 400 Midland National Life North American Company SPDR Gold Shares Great American Life Transparent Value Blended Index Security Benefit Life U.S. 10-Year Treasury Bond American Equity Investment Life Eagle Life Insurance Company * The Multi-Strategy Index is a proprietary benchmark created by and for the sole use of Jackson National Life Insurance Company. The index is constructed by applying five predetermined election criteria and contains approximately 100 stocks. The index includes stocks from large, midsized and smaller U.S. and international companies, based on market capitalization. ** The Annuity Linked TVI (ALTVI) Index is a proprietary index that was developed by EAM Partners L.P. This index is both calculated and owned by the Royal Bank of Scotland (RBS) via an exclusive license agreement. The ALTVI index was derived from another index, the Trader Vic Index™ Excess Return (TVI™ Index). An index cost and volatility control overlay both apply to the index, and will reduce the potential positive change in the ALTVI Index. This will also reduce the amount of interest that will be credited to indexed annuities utilizing this index. In order to compute the value of the Annuity Linked TVI Index, RBS deducts an 'index cost' of 1.25% of the daily return of the TVI from the TVI Index per annum. The index cost is deducted from the daily return of the TVI on a pro-rata daily basis and represents the costs charged (and expenses incurred) by RBS to maintain the ALTVI Index. The volatility control overlay is a rules-based adjustment, which is applied in computing the daily values of the ALTVI Index. It measures how much the TVI Index's price is changing. The volatility control overlay reduces the impact of a fall in price, as well as increases in the price of the TVI Index. The volatility control overlay calculation is not made publicly available. It should be noted that because the volatility overlay is expected to reduce the overall volatility of the ALTVI Index, it will also reduce the cost to Security Benefit Life in hedging its interest crediting risk for index annuities utilizing the ALTVI crediting option. Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 89 AR067047 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 151 of 153 Wink’s Product Report 4th Quarter, 2014 Companies that Have Exited the Indexed Annuity Market Aid Association for Lutherans AIG Annuity Allianz Life of New York ALLIED Life AmeriBest Life American Investors Ameritas Life Insurance Corporation of New York Aviva Life Beneficial Life Citicorp Insurance Clarica Columbus Life Community National Conseco Life Country Life Dearborn National Farmers New World Life First Variable Life General Life Glenbrook Life GPM Life Guarantee Life Hartford Life & Annuity Insurance Company The Independent Order of Foresters ING Life Insurance and Annuity Company Interstate Assurance Investors Insurance Corporation John Hancock Liberty Life Life Investors Lincoln Benefit Life Loyal American Massachusetts General The Midland Minnesota Life Modern Woodmen Monumental Life Northbrook Life Northern Life Pekin Life Provident Life & Accident ReliaStar Life RiverSource Life Security-Connecticut Shenandoah Life Southland Life Standard Life & Accident Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 90 AR067048 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 152 of 153 Wink’s Product Report 4th Quarter, 2014 Companies that Have Exited the Indexed Annuity Market Sun Life Transamerica Life Transamerica Occidental United Life & Annuity Unity Mutual West Coast Life Western Reserve Life Western United Life Woodmen of the World Companies that Have Exited the Indexed Annuity Market, then Re-entered AIG Annuity (Western National) American General American National Farm Bureau Great American Life Integrity Life Investors North American Oxford Life Physicians Life Principal Life Protective Life Washington National Insurance Company Companies that Have Exited the Indexed Annuity Market, Re-entered, and Exited Again (at least one time) Allstate Life Delta Life Genworth Symetra Financial Wink’s Sales & Market Report is published by Wink, Inc. 5148 E. University Avenue, Pleasant Hill, IA 50327 (855) ASK- WINK. Subscription: One Year $2,100, Single Copies $600 each. No part of this report may be sourced, copied or duplicated without prior consent. 03/15 Copyright 2015. All Rights Reserved 91 AR067049 Case 1:16-cv-01035-RDM Document 33-3 Filed 08/10/16 Page 153 of 153 NASAA Statement on SEC Equity-Indexed Annuity Rule WASHINGTON, D.C. December 17, 2008- The following is a statement from the North American Securities Administrators Association on the vote today by the U.S. Securities and Exchange Commission (SEC) to subject equity-indexed annuities (EIAs) to regulation under the federal securities laws. NASAA's membership consists of the securities administrators in the 50 states, the District of Columbia, the U.S. Virgin Islands, Canada, Mexico and Puerto Rico. "Equity-indexed annuities are extremely complex investment products that have often been used as instruments of fraud and abuse. For years, they have taken an especially heavy toll on our nation's most vulnerable investors, our senior citizens for whom they are clearly unsuitable. "This important rule will enable the SEC to address these abuses with the regulatory tools available under the federal securities laws, ranging from mandatory registration and disclosure requirements to strong suitability standards and antifraud remedies. NASAA commends the SEC and Chairman Cox in particular for removing the regulatory uncertainty surrounding EIAs and allowing the investing public to benefit from all of the protections this rule will provide." For more information: Bob Webster, Director of Communications 202-737-0900 1/1 AR068639