Company History
HMII is a corporation organized in the State of Maryland. HMII serves the teachers, administrators,
school business officials and support personnel who make up the educational community. HMII was
approved for registration as a broker dealer by the SEC on September 9, 1957 and was registered
with the National Association of Securities Dealers (“NASD”) on April 8, 1983. HMII registered with the
SEC as an investment adviser on February 23, 2015. HMII is dedicated to helping provide lifelong
financial well-being for educators and their families through personalized service and a full range of
tailored financial products. With the addition of investment advisory services, HMII offers a full
spectrum of amenities to help educators make the most of their future.
HMII is a wholly-owned subsidiary of Horace Mann Educators Corporation (NYSE: HMN), (“HMEC”),
a publicly held company. The terms “Client,” “you,” and “your” are used throughout this document to
refer to person(s) or organizations who contract with us for the services described within this
Disclosure Brochure. “HMII,” “we,” “our,” and “us” refer to Horace Mann Investors, Inc.
Our philosophy can be summarized by a series of beliefs every HMII registered representative
(“RR”), investment advisor representative (“IAR”) and associate shares:
• We believe educators are taking care of our children’s future, and we need to take care of
their future.
• We believe peace of mind should be available to every educator.
• We believe in respect; we treat others as we would like to be treated.
• We believe we can help advise and educate the educator.
• We believe in helping educators through a lifetime of changing needs.
• We believe we are uniquely qualified to do all of this because we were Founded by Educators
for Educators®.
HMII offers investment management and financial planning services to their Clients. HMII also offers
marketing services to independent, non-affiliated registered investment advisers.
Investment Management Services
HMII IARs offer investment management services to Clients that include access to the model
portfolios of third-party investment advisory firms (“TPIA”), with whom HMII has contracted in a Co-
Advisor or Sub-advisory relationship. These third party investment firms include:
• BNY Mellon (“BNY” formerly Lockwood Advisory) a wholly-owned subsidiary of The Bank of
New York Mellon Corporation (NYSE:BK) and an affiliate of Pershing LLC;
• Envestnet Asset Management, a subsidiary of Envestnet, Inc. (NYSE:ENV)
Through a personal discussion with the Client, the HMII IAR will obtain personal information that will
be entered into a computer program. This program will analyze the information provided by the client
in an effort to determine the most appropriate product to assist in meeting the client’s individual
investment needs (the “Client Profile”). If the program selects an investment management brokerage
account (“Account, Accounts”), the Client will work with the HMII IAR to select the best model portfolio
to meet that client’s individual goals, risk tolerance and investment guidelines.
The Client, with assistance from the IAR, will review and select a series of model portfolios offered
by our TPIAs that covers an appropriate spectrum of asset allocations. Using the Client Profile, the
Client’s IAR will make a recommendation regarding an appropriate model portfolio in line with the
Client’s risk tolerance and goals. Ultimately, it is the responsibility of the Client to choose the most
appropriate strategy to meet their objectives, needs, and risk tolerance.
In the Investment Management Agreement between HMII and a Client, the Client will grant
authorization to HMII to delegate discretionary authority on the Client’s behalf to the TPIA. The TPIA
will have discretionary authority to select securities, allocate assets, and determine the timing and
amounts of securities transactions. This does not provide HMII or the TPIA the ability to withdraw
monies or securities unless otherwise agreed to by the Client. All Client Accounts will be maintained
with a Custodian, who is not affiliated with HMII.
The TPIA will provide financial advisory and related support services to HMII on the Client’s behalf,
including model portfolio management and monitoring, client fee billing, and access to additional
software to assist with the client’s and IAR’s monitoring of the account. HMII, as fiduciary, maintains
sole responsibility for determining the appropriateness of any model portfolio allocation selected by
the Client.
There generally is a minimum of $10,000 for certain model strategies managed by BNY. These
minimums are determined by BNY. HMII may negotiate with the TPIA a lower minimum initial
investment for all Clients. Clients should understand that for such accounts, only certain model
portfolios may be available, and
a higher asset-based management fee may be imposed. Clients most
appropriate for the investment management services are those willing to pay more (via higher fund
management fee and operating expenses) for ongoing account monitoring services and the potential
to outperform the market or benchmark indices over the long term, but should also be aware the
potential to underperform is just as great.
Model Portfolio Programs
Model Portfolio Programs are fee-based diversified investment portfolios with models constructed
by the BNY. These diversified investment portfolios can include dozens of carefully examined
investment options and multiple investment vehicles, including mutual funds, exchange-traded funds
(“ETFs”), or a combination of mutual funds and ETFs. A variety of Model Portfolio Programs are
available to be selected by HMII Clients and IARs:
• BNY AdvisorFlex Portfolios a flexible mutual fund and ETF wrap account product available
in the BNY Program with a $50,000 minimum investment. BNY is both the sponsor of the
Program and the Portfolio Manager.
• BNY/American Funds Core Portfolios a discretionary mutual fund and ETF wrap account
product with a $10,000 minimum investment. Serving as the Portfolio Manager, BNY
allocates investor assets systematically across multiple asset classes and styles using
American Funds mutual funds and other select ETFs in a single account. BNY determines
the asset allocation strategy and selects investment vehicles for each investment style in the
portfolio, based upon proprietary modeling strategies, economic outlook and investment
research discipline. BNY is solely responsible for the fund selection and construction of
BNY/American Funds Core Portfolios.
• BNY Third Party Model Portfolios BNY performs due diligence on various Third Party Model
Providers and contracts with those Third Party Model Providers to provide the Models for the
Third Party Model Providers product. BNY continues to monitor contracted Third Party Model
Providers and the Models on an ongoing basis.
• BNY Wealth Start Portfolios a multi-manager, multi-asset class ETF/mutual fund portfolios
managed by BNY. Twelve portfolios, six tax-aware and six traditional, span the risk spectrum
targeting emerging to mass-affluent investors. The portfolios are designed
for investors seeking BNY’s investment vehicle research and portfolio management using
predominantly ETF portfolios. As of the date of this report, portfolios consist solely of ETFs.
However, these portfolios may consist of open and closed-discretion.
• BNY Asset Allocation Portfolios a multi-manager ETF/mutual fund wrap accounts managed
by BNY. Five traditional, risk-based portfolios span the risk spectrum targeting mass-affluent to
high-net-worth investors. The portfolios provide investors with investments researched by BNY
and asset allocations based on BNY’s capital market views
• Envestnet Fund Strategist Programs offers portfolios that may consist solely of mutual
funds, ETFs or may combine both types of funds to pursue different investment strategies
and asset class exposures. These portfolios are closed to new investors.
For more specific information on these portfolios offered through our TPIAs, please refer to the
TPIA’s respective ADV Part 2A brochure.
Independent Registered Investment Adviser Marketing Services
HMII has entered into agreements with the following independent registered investment advisers
whereby HMII solicits prospective Clients to enroll in the investment advisory services of those
independent registered investment advisers:
• AssetMark, Inc.,
• ARIS Retirement Services, a division of AssetMark, Inc.,
• ProNvest, Inc.
HMII provides general information about the services of the independent registered investment
adviser to certain, current and prospective retirement plan Clients including a contact form, which
allows prospective Clients to engage the independent registered investment adviser directly for
managed account services.
Marketing services for the ProNvest, Inc. program is conducted solely by HMII. HMII IARs perform
the marketing activities with respect to the marketing of AssetMark’s and ARIS Retirement Services’
investment advisory services.
Assets Under Management
In its business as a registered investment adviser, HMII does not directly manage the assets of any
Client and as such reports $0 regulatory assets under management. HMII provides continuous and
regular supervisory or management services to its Clients; however, the assets are directly managed
by our TPIAs through our Co-advisory or Sub-advisory agreements.
As of December 31, 2023, HMII Clients had $62,122,049 managed in the model portfolio programs
mentioned in this section. For the total amount of assets under management for each of the TPIAs,
please refer to their respective disclosure brochure.