Services
The Ameritas Investment Partners Mercury Wrap Fee Program (“Wrap Fee” or “Program”) is a proprietary investment program. Ameritas Investment
Company, LLC (“AIC”) is a registered broker/dealer. Ameritas Advisory Services, LLC (“AAS”) is a registered investment adviser. The Mercury
program offers investors the opportunity to obtain customized professional investment and brokerage services for one all-inclusive fee based upon
the assets under management. Any account within the Program shall be referred to as a “Wrap Fee Account” or “Program Account.” AIP, AAS and
AIC are affiliates of each other and the Ameritas Companies, with a common ultimate parent of Ameritas Mutual Holding Company (“AHMC”).
Under the Mercury program, AAS through its Investment Adviser Representative (“IAR”), will introduce potential investors (“Investor(s)”) to the
Program that they determine to be suitable following AAS’s policies and suggested account minimums. The IAR may recommend Programs, or
they may recommend AAS sponsored or unaffiliated advisory programs if they believe such other programs would be in the investor’s best interest.
The IAR assists Investors in completing required new account paperwork to obtain necessary information concerning their financial condition,
risk tolerance, cash flow expectations, etc. Using this information, the IAR will help the investor to determine the Program Account’s investment
objectives, including an asset allocation strategy and any related portfolio restrictions or limitations. The IAR may ask for additional information to
assist in determining the prudence of investing in a managed account Program and to recommend an investment strategy. The Investor is expected
to inform their IAR of any material changes in this information during the term of the Program Agreement, and the IAR will make recommendations
based on the information provided, but the ultimate decision on an investment policy rests with the Investor. AIP’s Wealth Management team reviews
the IAR’s analysis and recommendations and will follow-up accordingly to ensure that it is exercising its fiduciary duty to provide personalized advice
that is suitable for and in the best interest of the investor. The IAR will review these objectives annually to assist in maintaining their alignment with
investor needs. AIP and AAS (including the IAR) each receive a portion of the fee for the services they provide.
AIC acts as the introducing broker/dealer for and provides brokerage services to the Wrap Fee Programs. AIC generally introduces Program Accounts
to National Financial Services LLC (“NFS”), 245 Summer Street, Boston, MA, 02210 as the clearing broker/dealer and custodian on a fully disclosed
basis. On a limited basis, an alternate qualified custodian may be employed at the client’s request and expense, and in these cases, NFS will remain
the clearing broker. Such investors will not pay additional brokerage commissions than other clients who utilize NFS as the qualified custodian for
their accounts.
AIP provides investment advisory services for Mercury Accounts that are tailored to each client’s investment objectives and risk tolerances. Once
a strategy is determined as discussed above, an AIC brokerage account is opened and funded and an Investment Advisory Agreement is executed
between the client, AAS and AIP. AIP then develops and manages, on a discretionary basis, a customized portfolio using exchange-traded funds
(“ETFs”), mutual funds, and other pooled investments consistent with the Program and the strategy. If multi-share class funds are held in an
investment portfolio, we will utilize the lowest cost share classes available to us through NFS.
If you own multi-share class mutual funds in a discretionary or non-discretionary account, AIP or AAS will direct the broker/dealer, clearing firm or
custodian of your account to convert the mutual fund shares you own to the lowest cost share class available to us for the same funds at no cost or
tax consequences to you. Such conversions will be made without notice.
AIC directs all purchase and sale orders placed by AIP to NFS. NFS also maintains custody of all Program Account assets and performs normal
custodial and record keeping functions with respect to such Accounts.
Fees
Clients of the Mercury program pay a fee quarterly at the beginning of each quarter for services to be provided in that quarter, based a percentage
of your account value as of the last business day of the previous quarter and include all positions in the account including cash, money market funds
and brokered CDs unless specifically excluded by policy or by agreement with your IAR. Fees generally are deducted directly from client assets.
The standard fee schedule appears below. The minimum size for a Mercury account is $100,000 but may be waived at AIP’s sole discretion.
Account BalanceMaximum Annual Wrap Fee
$100,000 to $5,000,0001.50%
Over $5,000,000Negotiable
In certain cases, that portion of the fee payable to AIC, AAS and its IAR may be decreased and, as a result, a lower fee may be charged to the account
holder. In addition, an existing client in another advisory program sponsored by AIP
maybe allowed to become a Mercury client and maintain their
current fee schedule. As a result, existing and new clients may pay different fees and have different account minimums. The program fee is charged
at inception on a prorated basis to reflect the number of days remaining in the initial calendar quarter. If an Agreement is terminated within five
(5) business days from the date of inception, all fees paid in advance will be refunded. In the event that a Mercury Account is terminated during a
quarter, fees will be pro-rated and a refund issued to the client; such accounts may be terminated by the account holder at any time on written notice.
There are no sales loads, termination or surrender fees associated with the Mercury Account.
The total costs associated with a Mercury Account may be more or less than purchasing brokerage and advisory services separately. The factors
that bear upon the relative costs of any program include the number of and timing of transactions, solicitor’s fees, management and advisory fees,
custody charges, regulatory compliance, administrative charges, research costs, and promotional material costs. These and other factors may affect
the cost of obtaining these services separately.
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Account fees generally are payable quarterly in advance, as of the last business day of the previous quarter. If an Agreement is terminated within
five (5) business days from the date of inception, all fees paid in advance will be refunded. If an account is terminated during a quarter, fees will be
prorated, and a refund issued to the client. Such accounts may be terminated at any time on written notice. Fees generally are deducted from client
assets by AIC and NFS and allocated to each affiliate based on an agreed-upon percentage for the services provided.
Other Fees and Expenses
No other fees are assessed in addition to the Program fee. However, transaction-based assessments or taxes imposed by governments, self-regulatory
organizations, exchanges, etc. are not included in the Program fee and will be passed through to the account holder. Also, certain indirect costs
may be associated with securities purchased or held in an account. Examples of such indirect costs include advisory fees and operating expenses
associated with ETFs, mutual funds, or other pooled investments that pay these expenses from their assets and pass them along proportionately to
all their shareholders. While the client may be indirectly charged these fees, the client is not assessed a separate Program Account fee for them and
directly pays only the fee under the contract.
As further described in Item-9 Additional Information, AIC receives compensation from NFS in the form of transition assistance, credits to cover costs
of technology fees, mark-ups to account activity fees, margin interest, credit interest, and volume discounts on trading costs based on the number
of trades processed on the NFS platform. AIC retains net profits that result from the correction of trade errors in program accounts. All losses
incurred by clients, due to error, will be removed from either the IAR’s compensation or AIC’s revenues, depending on the cause of error. These
revenues and compensation related to both advisory and brokerage accounts custodied on the NFS platform, create substantial financial benefits to
AIC and NFS. This compensation represents a conflict of interest for us as AAS and AIC are under common ownership of our parent company. AAS
has an incentive to recommend AIC as the introducing broker/dealer and NFS for the custodian and clearing firm for our advisory programs. This
compensation is not shared with your IAR.
AIP has arranged for Chicago Clearing Corporation (“CCC”) to provide class action litigation monitoring and securities claim filing administration
for client accounts that chose to participate in this service. CCC charges a contingency fee of 15% of the amount of each claim settlement award
which is deducted from the client’s award at the time of payment. There are no minimum fees or other fees deducted from an account related to this
service, and AIP receives no portion of the fee or a rebate from the provider.
Compensation
Account fees are allocated to each of AIP, AIC, AAS and the respective IAR based on an agreed-upon percentage for the services provided. Fees
are charged based on a percentage of your account value and include all positions in the account including cash, money market funds and brokered
CDs unless specifically excluded by policy or by agreement with your IAR. The IAR receives compensation for providing various services to Program
investors, including: recommending the Program, assisting them in developing and maintaining investment objectives and asset allocation limits, and
ongoing financial planning. The amount of this compensation may be more than would be received if the investor participated in other programs of
the sponsor or paid separately for investment advice, brokerage, and other services. Therefore, the person recommending the Program to you may
have a financial incentive to recommend this investment Program over other programs or services.