CHECKLIST B: Rollover from ERISA Plan to New Commissions-Based IRA Account

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1 CHECKLIST B: Rollover from ERISA Plan to New Commissions-Based IRA Account If the FA is making a recommendation for the client to roll over or otherwise transfer assets from an ERISA Plan to a new IRA arrangement, where such transitioned account would be maintained and advised on a commission-basis (the New Commission-Based IRA Account ), the FA must complete this Checklist B. An ERISA Plan includes any tax-qualified benefit plan sponsored by an employer that covers its employees and that is subject to the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). If any check the box description does not accurately reflect the situation, comments should be included in the appropriate spaces provided below. All-In Costs. Calculating an all-in cost allows for a more direct comparison of the overall compensation and expenses being paid. Viewing compensation and expenses from an all-in cost perspective addresses the range of varying structures and arrangements for service payments due to different service delivery mechanisms and associated compensation and expenses; and especially for ERISA Plans, per plan, per participant and asset-based compensation and expense types. By rolling all services and compensation and expense types into an all-in cost, the data can be analyzed more consistently to compare and discern different compensation and expense levels. For the purpose of completing this Checklist, the all-in cost should be was based on three general service cost elements: 1. Administration, recordkeeping, communication and education; 2. Investment management; and 3. ERISA Plan sponsor investment consulting/financial advice or financial advice to investors/participants. Costs for specialized participant activities such as self-directed brokerage, managed accounts, loans, QDROs and distributions are not included in the all-in cost. While these specific activity related costs are an important consideration for participants engaging in the activity, they are not part of the core expense of administration. Account Owner, Trustee, Executor, Administrator, Minor if custodial First Name Middle Name Last Name Account Number Date of Birth MM DD YYYY Social Security or Taxpayer ID Number Daytime Phone Evening Phone 1. Reasons for Recommendations. I have identified the specific reason or reasons for concluding that the recommendation is in the best interest of the customer as indicated by the checked box(es) below. Check all that apply. Federal Tax Benefits. I have considered the fact that, if a distribution from the current employer s ERISA Plan ( Existing ERISA plan ) on behalf of the client were rolled over to an IRA, no amount would be subject to federal taxation. Do not check this box if the client s account in the Existing ERISA plan includes designated Roth contributions and the 5-taxable-year period has not yet lapsed. Certain tax benefits are available to participants who take a distribution of designated Roth contributions or roll over such contributions to a Roth IRA after the 5-taxable-year period has passed, which are lost if such amounts are received or rolled over within the 5-taxable-year period. Investment Options. I have concluded that an IRA would be beneficial to the client for the following reasons: Generally, there is a broader range of investment options that are available in an IRA in comparison to those available to the Existing ERISA plan or any new employer s ERISA Plan ( New ERISA Plan ). In my view, the overall quality of the investment options available under an IRA is higher in comparison to those available in the Existing ERISA plan or in any New ERISA Plan. Other Page 1 of 8 Reasons for Recommendations continues on next page.

2 Reasons for Recommendations Continued Check all that apply. Costs and Expenses. I have concluded that the costs of an IRA are either comparable to those of the Existing ERISA Plan or those of any New ERISA Plan, or the costs are not unreasonably greater than the cost of the Existing ERISA Plan or any New ERISA Plan. Existing ERISA Plan Complete A, B, or C Name of Existing ERISA Plan Vendor A B C Based upon the participant benefit statements provided by the client, or the client has stated that the annual all in cost for the Existing ERISA Plan is. The client does not have actual cost information for the Existing ERISA Plan, but the average all in cost for similarly sized plans (based on assets) is indicated by the checked box below. Median cost information for similarly sized plans: 1 Plan Asset Size Less than $1M $1M - $10M $10M - $100M $100M - $500M $500M or more Average All In Cost for Existing ERISA Plan Not available (average fee is above 1.27) For ERISA Plan Size, find 5500 on freeerisa.benefitspro.com From Worksheet One: For the Existing ERISA Plan, the estimated ongoing annual all in cost is and the up-front sales charge (for alternatives or mutual funds), if any, is. New ERISA Plan, if any. Complete D, E, or F Name of New ERISA Plan Vendor D E Based upon the participant benefit statements provided by the client, or the client has stated that the annual all in cost for the New ERISA Plan is. The client does not have actual cost information for the New ERISA Plan, but the average all in cost for similarly sized plans (based on assets) is indicated by the checked box below. Median cost information for similarly sized plans: Plan Asset Size Average All In Cost for New ERISA Plan Less than $1M $1M - $10M $10M - $100M $100M - $500M $500M or more Not available (average fee is above 1.27) For ERISA Plan Size, find 5500 on freeerisa.benefitspro.com F From Worksheet One: For the New ERISA Plan, the estimated ongoing annual all in cost is and the upfront sales charge (for alternatives or mutual funds), if any, is. Recommended IRA Name of Recommended IRA Vendor G From Worksheet One: For the Recommended IRA, the estimated ongoing annual all in cost is and the up-front sales charge (for alternatives or mutual funds), if any, is. 1 Inside the Structure of Defined Contribution/401(k) Plan Fees, 2013, Survey Conducted by Deloitte Consulting LLP for the Investment Company Institute (August 2014). See also The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2015 ICI Research Perspective Vol. 22, No. 4 (July 2016). Page 2 of 8

3 Reasons for Recommendations Continued Check all that apply. Employer s Payment of Plan Fees. I have asked the client for information on whether the existing employer pays the administrative expenses for the Existing ERISA plan, and whether any new employer pays the administrative expenses for any New ERISA Plan. Such information, if provided, is reflected for either the Existing and/or New Plan in the checked box(es) below. Existing ERISA Plan (if provided): The employer pays such expenses. The employer pays a portion of such expenses. The employer does not pay such expenses. New ERISA Plan (if provided): The employer pays such expenses. The employer pays a portion of such expenses. The employer does not pay such expenses. Commission-Based Services. I have concluded that certain additional services, which generally are not available under an ERISA Plan, will become available to the client through an IRA as indicated by the checked box(es) below. Personalized services from a financial adviser, specifically myself, as the financial adviser of choice. Initial consultation to assess investment objectives and risk profile. Access to a broad range of investment strategies, models or third party asset managers. Recommendations for investment strategy, model or third party asset managers. Ongoing consulting and recommended changes to investment strategy, model or third party asset managers as necessary. Individualized advice for client s New Commission-Based IRA Account. Other Penalty-Free Withdrawals. The client has confirmed that he or she has already attained age 59-½ and, therefore, may be immediately eligible to take penalty-free withdrawals from an IRA. Do not check this box if the client is younger than age 59-½. If the client is younger, an ERISA Plan may have a tax advantage over an IRA. The client may be eligible to take penalty-free withdrawals from an ERISA Plan as early as age 55 (as opposed to age 59-½ in the case of an IRA). Loans. The client has confirmed that he or she is not in need of a loan, including a loan for the purchase of his or her principal residence. Do not check this box if the client is in need of a loan, including a loan for the purchase of his or her principal residence, and loans are available from Existing Plan. The ability to take a loan will be lost if assets from Existing Plan are rolled over to an IRA. Outstanding qualified plan loans should be repaid before the client takes a rollover. Protection from Creditors. The client has confirmed that there is no reasonably foreseeable need for him or her to seek protection from creditors and lawsuit judgments. Do not check this box if the client is unable to provide such confirmation. An ERISA Plan may have an advantage over an IRA by providing greater protection from creditors and lawsuit judgments. Reasons for Recommendations continues on next page. Page 3 of 8

4 Required Minimum Distributions. The client has confirmed that he or she does not intend to work beyond age 70-½. Do not check this box if the client intends to move to a new employer and work into his or her 70s. In this situation, a New Plan may have an advantage over an IRA, since the New Plan may not require minimum distributions to commence until actual retirement (as opposed to an IRA which generally requires commencement at age 70-½ even if the individual has not actually retired). Employer Stock. The client has confirmed that he or she does not beneficially own any employer stock through his or her Existing Plan. Do not check this box if the Existing Plan is a defined contribution plan and the client beneficially owns employer stock through such plan. Certain tax benefits are available to participants who take in-kind distributions of employer stock, which are lost if such amounts are rolled over to an IRA. Estate Planning. I have concluded that there may be more estate-planning options available to the client and to client s beneficiaries if ERISA Plan assets are rolled over to an IRA. The client may have the ability to stretch (i.e., allowing heirs of inherited IRAs to withdraw the assets over the course of their lifetime, stretching the tax consequences over that time period), to disclaim or name certain beneficiaries that were not allowed in the ERISA Plan or any New Plan, and the ability to split the account into multiple accounts for different beneficiaries, which generally are not available under an ERISA Plan or any New Plan, which will become available to the client through an IRA. 2. Consideration of Alternatives. In concluding that the recommendation meets the best interest of the customer, I have considered all of the following items as confirmed by the checked boxes below. The FA must be able to check ALL of these boxes. Alternatives to Rollover. Based on the information provided by client, I have considered the alternatives to rolling over the client s distribution from the Existing ERISA plan to an IRA, including but not limited to leaving all or a portion of such amounts in the Existing ERISA plan or receiving a partial distribution from the Existing ERISA plan and rolling over the remainder to an IRA, if permitted. Alternative Fees and Expenses. Based on the information provided by client, I have considered the different fees and expenses associated with the Existing ERISA plan, any New ERISA Plan and an IRA. Alternative Services and Investments. Based on the information provided by client, as applicable, I have considered the different levels of services and investments available under the Existing ERISA plan, any New ERISA Plan and an IRA. Yes No Born on or after January 2, Based on information provided by the Client, who is a participant in a 401(k) plan born before January 2, 1936, I have considered the special income averaging taxation distribution option available from a tax-qualified retirement plan if certain criteria are met. continues on next page. Page 4 of 8

5 WORKSHEET ONE: Rollover from ERISA Plan to New Commission or Fee-Based IRA Account Cost and Expense Comparison Instructions for FA: All figures should be annualized. Transfer Total Estimated Charge Answers to Section 1, Page Two, of Checklist A or B Initial Account Value $ 1. If not using default all-in cost from Section 1. of Checklist A or B, for the Existing ERISA Plan Name of Existing ERISA Plan Vendor bps OR OR $ Options and Rider Fees (For Annuity Purchases Only) Options and Rider Fees Money Management Advisory Fee (Investment Advisor Fee for Managed Accounts Only) Account Maintenance Fee (For Brokerage Account Only) Account Maintenance Fee Account Maintenance Fee Account Maintenance Fee bps OR OR $ Trading Fees (Ticket Charges and Related Charges Brokerage Only) $ per trade X estimated number of trades annually Up-Front Sales Charge for Alternatives or Mutual Funds (if any) = Money Management Advisory Fee Account Maintenance Fee Trading Fees Up-Front Sales Charge for Alternatives or Mutual Funds 2. If not using default all-in cost from Section 1. of Checklist A or B, for the New ERISA Plan Name of New ERISA Plan Vendor bps OR OR $ Options and Rider Fees (For Annuity Purchases Only) Options and Rider Fees Money Management Advisory Fee (Investment Advisor Fee for Managed Accounts Only) Account Maintenance Fee (For Brokerage Account Only) Account Maintenance Fee Account Maintenance Fee Account Maintenance Fee bps OR OR $ Trading Fees (Ticket Charges and Related Charges Brokerage Only) $ per trade X estimated number of trades annually Up-Front Sales Charge for Alternatives or Mutual Funds (if any) = Money Management Advisory Fee Account Maintenance Fee Trading Fees Up-Front Sales Charge for Alternatives or Mutual Funds Page 5 of 8 Worksheet One continues on next page.

6 3. For the Recommended IRA Name of Recommended IRA Vendor bps OR OR $ Options and Rider Fees (For Annuity Purchases Only) Options and Rider Fees Money Management Advisory Fee (Investment Advisor Fee for Managed Accounts Only) Account Maintenance Fee (For Brokerage Account Only) Account Maintenance Fee Account Maintenance Fee Account Maintenance Fee bps OR OR $ Trading Fees (Ticket Charges and Related Charges Brokerage Only) $ per trade X estimated number of trades annually Up-Front Sales Charge for Alternatives or Mutual Funds (if any) = Money Management Advisory Fee Account Maintenance Fee Trading Fees Up-Front Sales Charge for Alternatives or Mutual Funds Instructions for FA: Transfer Total Estimated Charge Answers to Section 1, Page Two, of Checklist A or B For the purpose of completing this Worksheet One, the estimated first-year and annual all-in cost should be based on three general service cost elements: 1. Administration, record-keeping, communication and education; 2. Investment management; and 3. ERISA Plan sponsor investment consulting/financial advice or financial advice to investors/participants. This Worksheet One has been completed based on information believed to be reliable by the financial adviser, but may not include all costs, fees, and expenses that may be applicable. Estimates about annual expenses are subject to change. As investment options selected change in the account, the customer may wish to check with the financial adviser to determine whether such changes affect the ongoing expenses with respect to the customer s investment account. Page 6 of 8

7 CHECKLIST B-1: Switching from ERISA Plan Fees to New Commission-Based IRA Account If the FA is making a recommendation for the client to switch from a fee-based arrangement where brokerage and other investment-related services are provided on behalf of an ERISA Plan (an Existing Fee-Based ERISA Plan Account ), to a new IRA arrangement, where such transitioned account would be maintained and invested through a commission-based product, (the New Commission-Based IRA Account ), the FA must complete this Checklist B-1. If any check the box description does not accurately reflect the situation, comments should be included in the appropriate spaces provided below. Not Applicable. This Checklist B-1 is not applicable because the FA is NOT making a recommendation for the client to switch from a fee-based ERISA Plan account to a new IRA arrangement, where such transitioned account would be maintained and advised on a commission-basis (i.e. the Plan and the new IRA are both commission-based). Reasons for Recommendation I have identified the specific reason(s) for concluding that the recommendation is in the best interest of the customer as indicated by the checked box(es) below. Check all boxes that apply. Commission-Based Product Advantages. I have concluded that switching to a New Commission-Based IRA Account would be beneficial to the client based on the following factors: Generally, there is a broader range of benefits, features, and product solutions that are available in a New Commission-Based IRA in comparison to those available in the Existing Fee-Based ERISA Plan Account. In my view, the overall quality of the benefits, features, and product solutions available under a New Commission-Based IRA is higher in comparison to those available in the Existing Fee-Based ERISA Plan Account. The client is interested in receiving transaction-based recommendations for individual securities and investment products, as opposed to receiving investment advisory services. The client is not interested in discretionary investment management services. The client is interested in paying a transaction-based fee, rather than a regular asset-based fee. Based on the frequency of the trading activity for the client s Existing Fee-Based ERISA Plan Account, it would be suitable for the client to switch to a New Commission-Based IRA Account. Other Commission-Based Services. The following services will be available to the client through a New Commission-Based IRA Account as indicated by the checked box(es) below. Personalized services from a financial adviser. Initial consultation to assess investment objectives and risk profile. Access to a broad range of investment strategies, models or third party asset managers. Recommendations for investment strategy, model or third party asset manager. Ongoing consulting and recommended changes to investment strategy, model or third party asset manager as necessary. Individualized advice for client s New Commission-Based IRA Account. Other continues on next page. Page 7 of 8

8 FOR CHECKLIST B AND B-1 Best Interest of the Customer Standard. FA must sign below. I have concluded that the recommendation for the client to roll over assets from an ERISA Plan to an IRA that would be maintained and advised by me as the financial adviser and if applicable, I have also concluded that the recommendation for the client to switch from an Existing Commission-Based Account to a New Fee-Based IRA Account, meets the Best Interest of the Customer Standard for retirement advisors (as defined below). Under the Best Interest of the Customer Standard, my recommendation to the client must, at the time of such investment recommendation, reflect the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, based on the client s investment objectives, risk tolerance, financial circumstances, and needs, without regard to the financial or other interests of myself, the broker-dealer and/or registered investment advisor that I represent, or any other party. Print Financial Adviser (FA) Name Financial Adviser (FA) Signature Date MM - DD - YYYY FOR CHECKLIST B AND B-1 Client Acknowledgment. The client must sign below. By signing the applicable Checklist(s), I, the undersigned client, acknowledge that the Financial Adviser (FA) has made a diligent and prudent effort to obtain information about the Existing and/or New Plan, including the review of Form 5500 and the participant fee disclosure provided by me to the FA. Where the FA was unable to obtain necessary information, and after the significance of such information was explained to me, I understand that the FA relied upon alternative data sources with respect to typical fees and expenses for the Existing and/or New Plan. I acknowledge and understand that the FA does not provide tax, legal or accounting advice and that I should consult with my own tax, legal and accounting professionals. I further acknowledge that the FA and I have discussed each of the reasons for the recommendation(s) stated above, and I agree that the above recommendation(s) are in my best interest. Client Name Client Signature Date MM - DD - YYYY SIGN SIGN Page 8 of 8