Compensation
Program Overview
Thrivent Investment Management Inc. (“Thrivent” or “we”
or “us”) is an investment adviser and broker- dealer
registered with the Securities and Exchange
Commission. The words “you” and “your” refer to the
person(s) who signs the Thrivent Investment
Management Inc. AdvisorFlex Managed Variable Annuity
Client Agreement (the “Agreement”) whether one or
more individuals or entities. Thrivent sponsors the
Thrivent AdvisorFlex Managed Variable Annuity™
program (“AdvisorFlex Program”) a non-discretionary
investment advisory and managed accounts program
that is described in this Brochure and is a part of
Thrivent’s overall Managed Accounts Program
(“Program”).
The Program also includes a number of other investment
advisory, managed account programs sponsored by
Thrivent with the objective of managing
a portfolio of assets on both a discretionary and
nondiscretionary basis. These programs include:
• Thrivent Advisor (“Advisor”)
• Thrivent Advisor Guided (“Advisor Guided”)
• Thrivent Advantage Managed PortfoliosTM
(“Advantage”) (closed to new investors)
• Thrivent SELECT Managed PortfoliosTM
(“SELECT”)
• Thrivent Income-Focused Managed
PortfoliosTM (“Income-Focused”)
• Thrivent Genesis Managed PortfoliosTM (“Genesis”)
• Thrivent Shepherd Managed Portfolios®
(“Shepherd”)
• Thrivent Impact Managed PortfoliosTM
(“Impact”)
• Thrivent Shield Managed PortfolioTM (“Shield”)
• Thrivent Separately Managed Account (“SMA”)
• Thrivent Unified Managed Account 2.0
(“UMA”)
If you are interested in learning more about these
other programs, ask your financial advisor (“Financial
Advisor”) for a copy of the Thrivent Investment
Management Inc. Managed Accounts Program Brochure
(“Managed Accounts Program Brochure”).
The AdvisorFlex Program enables you to receive
ongoing investment advice and related services,
including performance, custody and transaction
reporting in connection with your Thrivent AdvisorFlex
Variable Annuity™—for an asset-based fee (“Program
Fee”). Participation in the AdvisorFlex Program
may cost you more or less than purchasing these
services separately.
Envestnet Asset Management, Inc. (“Platform
Manager”), an unaffiliated registered investment
adviser provides services for the AdvisorFlex Program.
Investment advisory services for the AdvisorFlex
Program will be provided to you by Thrivent and your
Financial Advisor.
To participate in the AdvisorFlex Program, you will sign
an AdvisorFlex Variable Annuity Application to establish
an annuity contract (“Contract”) with Thrivent Financial
for Lutherans, an affiliated fraternal benefit society.
Thrivent Financial for Lutherans is also the issuer of the
Contract and will serve as the custodian for the assets in
the Contract.
Generally, you will pay a Program Fee based on the
accumulated value of the Contract assets. The Contract
is the only investment in the AdvisorFlex Program. No
other securities may be purchased or otherwise held
within the AdvisorFlex Program. Review the AdvisorFlex
Program chart below and the Thrivent Investment
Management Inc. AdvisorFlex Managed Variable
Annuity Client Agreement (“Client Agreement”) for more
information about the Contract assets.
The investment options available in your Contract are
referred to as subaccounts (“Subaccounts”). You also
have the option of investing a portion of your Contract
assets in a fixed account (“Fixed Account”). Portfolios of
the Thrivent Series Fund, Inc. are among the
Subaccount options (“Thrivent Financial for Lutherans
Subaccounts”) available for purchase within the
Contract. Thrivent Financial for Lutherans, the issuer of
the Contract, also serves as the investment manager for
the Thrivent Series Fund, Inc. portfolios and receives a
management fee for its services. Thrivent Financial for
Lutherans may also earn administrative service fees
or revenue-sharing fees from the use of certain non-
proprietary portfolio Subaccount options available for
purchase in the Contract.
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As a shareholder of portfolio(s) invested in a
Subaccount, you will pay your proportionate share of
the portfolio’s underlying expenses, which may include
advisory fees and other operating expenses. Thrivent
Financial for Lutherans, the issuer of the Contract, may
also charge you a fund facilitation fee to make certain
non-proprietary portfolios available as investment
options in a Subaccount. These fees are in addition to
the Program Fee you pay. Not all portfolios
have fund facilitation fees. Generally, it is more profitable
for us if you purchase investment products that are
underwritten, distributed or advised by Thrivent and/or
its affiliates, such as portfolios of the Thrivent Series
Fund, Inc. Carefully review the sections titled “Fees and
Compensation—Other Charges, Fees and
Expenses”and “Item 9—Additional Information—
Third-Party and Thrivent-Based Financial
Incentives” for further information related to this conflict
of interest.
The managed account programs and investment-
related advice and services your Financial Advisor is
able to provide depend on the securities licenses and
registrations they hold and the programs to which
Thrivent has granted them access. In order to offer
managed account programs, your Financial Advisor is
required to be registered with Thrivent as an investment
advisor representative (i.e., they must hold a Series 65
or 66 license).
Your Financial Advisor will recommend an appropriate
managed account program for you based upon your
investment objectives, financial situation and needs.
The decision to select the AdvisorFlex Program and to
establish a Contract is solely yours.
Review the chart below for an at-a-glance view of the
AdvisorFlex Program, including the investment selection
process and the Program Fee Schedule.
AdvisorFlex Guided Program Overview
Investment Advisory Structure Non-discretionary
Asset Allocation Strategy Financial Advisor recommends; client approves
or rejects recommendation
Eligible Program Assets AdvisorFlex Variable Annuity
Subaccount and Fixed Account/Investment Selection Financial Advisor recommends; client approves
or rejects recommendation
Minimum Initial Investment1 $25,000
Rebalancing and Reallocation Financial Advisor recommends; client approves
or rejects recommendation
The AdvisorFlex Program Fee Schedule is outlined in “Item 4—Services, Fees and Compensation” below.
Financial Advisors may work with you either individually,
as a team or in partnership with other Financial Advisors
and/or support staff. If your Financial Advisor works
with other Financial Advisors or support staff, these
individuals may have access to your Contract and
other information and may be responsible for certain
aspects of servicing your participation in the AdvisorFlex
Program. For example, these other Financial Advisors
may enter trades at your request, participate in the
preparation of the portfolio reviews, perform investment
research, and be available to answer general questions
you may have related to the AdvisorFlex Program.
Investing involves risks, including the potential for loss
of principal invested. Strategies and recommendations
provided may have tax or legal consequences that you
should consider.
Thrivent and its Financial Advisors do not provide tax or
legal advice. Consult your tax professional and attorney
for such advice. The “Services” section below describes
the AdvisorFlex Program in greater detail.
1You may be eligible to participate in the AdvisorFlex Program below the initial minimum investment listed in the chart. Review
the Contract prospectus and “Item 5—Account Requirements and Types of Clients” for additional information.
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Services
The AdvisorFlex Program is a non-discretionary
investment advisory program that gives you access to
a Thrivent AdvisorFlex Variable Annuity Contract. Your
Financial Advisor will help you develop an asset
allocation strategy, select from the Subaccounts
available in your Contract, and determine how much of
your premium (payments you make) to allocate into
each of the Subaccount(s) and/or the Fixed Account
within the Contract. Your Financial Advisor may use a
variety of methods and resources to develop a
recommended asset allocation strategy.
Due to changing market conditions, the asset allocation
among the Subaccounts within your Contract may
change or deviate from its original allocation. In light
of this, your Financial Advisor may recommend that you
participate in the automatic asset rebalancing program,
which is an option available in the Contract. If you do not
choose to participate in the asset rebalancing program,
your Financial Advisor will recommend that you
rebalance or reallocate the Subaccounts and the Fixed
Account assets. It is solely your decision to implement
any rebalancing or reallocation recommendations
provided by your Financial Advisor. You may also contact
your Financial Advisor to rebalance or reallocate the
Subaccounts and the Fixed Account assets.
Where permitted by applicable law and business need,
Thrivent Financial for Lutherans reserves the right to
make certain changes to the structure and operation of
the Contract. These changes include, among others, the
right to:
• Remove, combine or add new Subaccounts in its
sole discretion.
• Substitute shares of one portfolio for another, which
may have differences including different fees,
expenses, objectives and risks.
• Restrict or prohibit additional allocations, and/or
payments to Subaccounts.
Review the AdvisorFlex Variable Annuity
prospectus (“Prospectus”) for more information
about these changes.
Thrivent Financial for Lutherans aggregates multiple
client transaction orders to seek the most favorable
price and/or lower execution costs at the time of
execution. All aggregated client transaction orders
receive the same price.
Cash Management
There are no cash management features in the
AdvisorFlex Program. All cash must be invested
in a Subaccount and/or the Fixed Account within
the Contract.
Refer to the Client Agreement for information about
additional payments and surrenders.
Program Account Reviews and Reports
Performance reporting, custodial statements and trade
confirmations are features available in the AdvisorFlex
Program. You should review these documents
upon receipt and promptly notify Thrivent of any
discrepancies.
Performance Reporting
You and your Financial Advisor will receive quarterly
performance reports detailing the following:
• Portfolio Subaccount and Fixed Account
appraisal—Reports your portfolio’s holdings,
current market value of all positions, and unrealized
gains/losses.
• Quarterly performance—Summarizes the
current quarterly performance of the portfolio.
• Performance history—Summarizes the
performance of the Subaccount(s) and compares it
to various market indexes.
• Cost basis—Provides cost basis information in
year-end summary statements.
Consolidated quarterly performance reports may be
available if you or members of your household have
the AdvisorFlex Program and multiple accounts in the
Program with the same taxpayer identification number
and/or household mailing address.
Custodial Statements
Thrivent Financial for Lutherans will send you statements
at least quarterly. These statements contain information
including, but not limited to, the accumulated value
of your Contract, the current market value of each
Subaccount invested in, the amount of the Fixed Account
and transaction activity for the previous quarter period. In
certain instances, Thrivent will also send you a quarterly
statement describing certain activity during the previous
quarter. We encourage you to carefully review and
compare the Contract statements that you receive from
Thrivent Financial for Lutherans with those you receive, if
any, from Thrivent.
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Trade Confirmations
Thrivent Financial for Lutherans will also send you confirmations of each purchase or surrender transaction effected in
your Contract and/or any other transaction for which it is obligated to send you a confirmation.
Fees and Compensation
You will be charged a quarterly Program Fee for each AdvisorFlex Program not to exceed the fee rate from the fee
schedule(s) provided below.
AdvisorFlex Program Fee Schedule
Accumulated Value of
Household*Contract(s)
Maximum Program Fee
(annual as a % of assets)
Up to $100,000 2.00%
$100,000–$249,999 1.85%
$250,000–$499,999 1.70%
$500,000–$999,999 1.55%
$1,000,000–$2,999,999 1.45%
$3,000,000–$4,999,999 1.25%
$5,000,000–$9,999,999 1.00%
$10,000,000 and above 0.90%
Fee for funds in the Fixed Account. For funds held in the Fixed Account, the Maximum Program Fee
is 0.50%. *Household includes all of your Contracts and/or managed accounts within the Program with
the same SSN/TIN or mailing address.
The Program Fee will vary among clients and may
be negotiable under certain circumstances. Factors
typically considered to determine your Program Fee
include:
• The managed account program(s) you have
selected.
• The amount of assets in your Contract.
• Your personal financial needs, objectives and
complexity of your financial situation.
• The level of anticipated or actual trading within the
Subaccounts.
• The experience level and credentials of your
Financial Advisor.
• The amount of household assets you have within
the Program, where Contracts and/or managed
accounts have the same taxpayer identification
number and/or home mailing address.
Thrivent and your Financial Advisor may receive a
financial benefit by you not paying a reduced fee should
you qualify for, but opt out of, householding. However,
your negotiated fee for individual Contracts may be lower
than the fee you qualify for with householding.
To address this conflict, in addition to the information
described in “Item 9—Additional Information—
Review of Accounts” below, Thrivent trains its
Financial Advisors to review householding with clients
when appropriate.
Calculation of Program Fees
The Program Fee is based on the accumulated value of
your Contract assets as of the last business day
of the end of the quarter and in accordance with the
Client Agreement. Thrivent, in its sole discretion,
determines which assets are billable and included in the
calculation of the Program Fee.
Thrivent Financial for Lutherans will deduct your Program
Fee from either a bank account that you designate or this
Contract. If your Program Fee is deducted from your
Contract, it will reduce the value of your Contract.
National Financial Services LLC (“NFS”) will deduct
your Program Fee if you select a Thrivent brokerage
or managed account as the billing account for the
AdvisorFlex Program. Review “Item 9—Additional
Information—Other Financial Industry Activities and
Affiliations” for more information about NFS. Thrivent is
not affiliated with NFS.
Allocation of the Program Fee
A portion of your Program Fee is paid to Thrivent,
your Financial Advisor and the Platform Manager for
their services. The amount of the fees paid to your
Financial Advisor and/or Thrivent depends upon
the Program Fee that you negotiate with your
Financial Advisor and the amount of the fee payable
to your Financial Advisor pursuant to Thrivent’s
compensation policies.
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Other Charges, Fees and Expenses to Consider
If you invest in Thrivent Series Funds, Inc. and certain
non-proprietary portfolios, you will receive an offset
credit in the amount by which the total of certain fees
received by Thrivent exceed 0.45% annually of your
Contract’s accumulated value. If these fees received by
Thrivent do not exceed 0.45%, you will not receive a
credit. The types of fees included in the offset if received
by Thrivent are provided below.
Thrivent Series Fund, Inc.:
• Investment advisory fees charged by the
investment manager of the funds.
• The offset does not include administrative fees,
transfer agent fees, sub-transfer agent fees or
networking fees.
Non-proprietary portfolios:
• Reimbursement payments.
• Administrative fees.
• Transfer agent fees or other servicing and account
maintenance fees paid to us or our affiliate related
to this program.
The credit will be applied to the same source you
authorized Thrivent Financial for Lutherans to deduct
your Program Fee.
Fees and charges that are not included in the Program
Fee, but may be incurred in addition to the Program
Fee, include:
• Surrender charges.
• Transfer charges.
• Mortality and expense charges.
• Charge for a maximum anniversary death
benefit rider.
• Operating expenses of the Subaccount(s) that
you select.
• Fund facilitation fees for certain Subaccounts.
• Electronic fund, banking and wire transfer fees.
• Other miscellaneous or service charges.
Additional Compensation and Charges Applicable to
Your Financial Advisor and Thrivent
Your Financial Advisor recommending and providing
advice with respect to the Program receives additional
compensation as a result of your participation in the
AdvisorFlex Program. The amount of this compensation
may be more or less than what your Financial Advisor
would receive if you received other Thrivent services
or paid separately for investment advice, brokerage
and other services (e.g., the cost of the services if
provided separately and the trading activity in the
client’s Contract or account(s)).
Therefore, your Financial Advisor may have a
financial incentive to recommend one of Thrivent’s
managed account programs over other programs or
services. In addition, your Financial Advisor may get
paid a higher percentage of the Program Fee,
depending upon the program(s) you select and
Thrivent’s compensation payout criteria. This creates
a conflict of interest on the part of your Financial
Advisor, which Thrivent manages through its new
account or best-interest review process, surveillance
and by training Financial Advisors regarding the
Program and related services.
Linking Programs/Accounts
If you have an AdvisorFlex Program and other accounts
within the Program with the same taxpayer identification
number and/or home mailing address, you may link
those Programs/Accounts for purposes of billing by
selecting a primary account (“Primary Account”) from
which to pay the Program Fees on behalf of the other
linked Programs/Accounts on a quarterly basis. The
accounts do not need to be within the same managed
account program. This linking is only available if you
elect to have the AdvisorFlex Program Fee deducted
from a non-qualified brokerage or managed account.
The Primary Account may not be a retirement account.
A retirement account, as used in this Brochure, is a plan
subject to the provisions of Title I, Part 4 of the Employee
Retirement Income Security Act of 1974 (ERISA), a tax-
qualified plan of self-employed persons, or an individual
retirement account or other plan within the meaning of
section 4975(e) of the Internal Revenue Code of 1986,
as amended.
Factors to Consider in Assessing AdvisorFlex
Program Costs
There are a number of factors to consider when
assessing the costs of the AdvisorFlex Program. These
factors include:
• The combination of investment advisory, custodial
and related services and the Contract available
through the AdvisorFlex Program may not be
available separately.
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• The source of investible assets and the time period
for which you have held the assets or any surrender
charges paid to sell those assets could affect
whether the assets are included in the Program
Fee calculation.
• Whether you have previously paid a sales load to
Thrivent or its affiliates within a 24-month period
prior to enrollment in the AdvisorFlex Program.
• Whether you have paid a surrender charge to
Thrivent or its affiliates immediately prior to enrolling
in the AdvisorFlex Program.
Is the Program Appropriate for You?
Your Financial Advisor and/or Thrivent may recommend
to you one or more programs. The decision to select one
or more managed account programs is solely yours.
Discuss, among other things, the following with your
Financial Advisor to determine if the recommended
program is appropriate for you:
• Whether it is more advantageous for you to enroll
in the AdvisorFlex Program or to pay separately for
other products or services that may not offer the
combination of investment advisory, custodial and
brokerage services and advisory services, as part
of the Program.
• The cost, potential benefits and potential risks of the
AdvisorFlex Program.
• Your investment objectives and the complexity of
your investment strategy.
• The types of and number of investments you hold
and intend to make, including the percentage of
the overall portfolio that you intend to hold in the
Fixed Account.
• Your desire for diversification across Subaccount(s).
• The frequency with which you expect to trade in
your Subaccount(s).
• Your anticipated use of other services and features
specific to AdvisorFlex.
• The payment preference of an asset-based fee
for ongoing investment advice and other related
services compared to a commissioned-based
variable annuity.
At any time, a Contract can vary greatly in the size,
number and diversity of the Subaccounts held, due
to, among other things, market conditions and your
current investment needs and objectives. Generally, it
is recommended that you diversify your holdings in
an effort to help reduce your portfolio’s overall market
risk. Investment diversification does not ensure a profit
or guarantee against loss. If you intend to hold a
concentrated portfolio, including a concentrated position
in the Fixed Account, for an extended period of time, you
should consider other Contract options (i.e., investing
in a commissioned-based variable annuity) that may be
more economically advantageous for you.
Your Financial Advisor receives training related to
offering and servicing Contracts in the AdvisorFlex
Program. Training includes understanding factors
relative to client needs and the suitability of product
and service recommendations, expected trading or
transaction frequency, fee preference (e.g., asset-based
fee or a commission-based fee arrangement), and desire
for ongoing investment advice.