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Investor Information

Product Partnerships, Compensation and the Educational Partners Program

Product Partnerships

This disclosure offers the clients of Hornor, Townsend & Kent, Inc. (HTK) additional information concerning the marketing and compensation arrangements HTK has with approved product sponsor firms.

HTK is a Registered Broker-Dealer and Registered Investment Advisor based in Horsham, Pennsylvania. The firm has approximately 900 registered representatives and approximately 500 investment advisory representatives (IARs). HTK has formed partnerships with a variety of product companies who sponsor the various products and services our registered representatives sell. HTK's registered representatives sell these investment products to their clients in order to help clients achieve their financial goals.

As a result of the partnerships HTK has with its approved product sponsors, those firms may engage in activities with HTK's registered representatives to help facilitate the education and distribution of their products, such as educating registered representatives to make them more knowledgeable about such products or services. Some of those activities may include the following:

  • One-on-one consulting
  • Hosting due diligence events or presentations
  • Providing teleconferences or webinars
  • Distributing sales literature or other collateral materials
  • Hosting group breakfasts, luncheons or dinners.

Compensation

HTK and its registered representatives receive compensation for the sale of securities products, including mutual funds, money market funds, investment advisory services, variable products, stocks, bonds, UITs, non-traded REITs and business development corporations. This compensation may be in the form of:

  • Commissions and sales loads based on specific transactions affected.
  • Advisory fees based on the amount of assets under management or financial planning function performed by the Investment Advisory Representative of HTK. These fees are disclosed in the client's Investment Advisory contract with HTK.
  • Recurring distribution fees based on assets held in an account (i.e. 12b-1 and/or management fees). Note that the fees and expenses associated with mutual fund and variable product sales are disclosed in the product sponsors' prospectus for that specific investment.
  • Cash payments to HTK from product sponsors as a reimbursement for training and educational expenses incurred by registered representatives or HTK home office associates when attending educational meetings or conferences held by HTK or by a product company.
  • Cash payments through HTK to registered representatives as reimbursements for certain client educational efforts or attendance at due diligence meetings.

HTK has a policy of not allowing the absorption of ticket charges by product sponsors and not participating in directed brokerage transactions. In addition, HTK receives compensation calculated on cash balances in money market funds in accounts held at Pershing, as well as margin debt interest. Registered representatives may participate in some of this compensation, based upon a client's aggregate money market holdings.

Educational Partners Program

HTK’s Educational Partners Program is a fee-based program designed to offer access to HTK's network of registered representatives and IARs for training and education purposes. Because of the large number of HTK approved product sponsors with whom we have selling agreements, forming a focused group of educational sponsors enables HTK to make the most efficient use of its resources in order to educate our registered representatives and IARs. The type of access HTK’s Educational Partners receive may include participation in the following:

  • Educational Conferences
  • Webinar trainings for our representatives
  • Lists of Registered Representatives and Investment Advisory Representatives
  • Trainings conducted in our offices
  • Digital marketing within our intranet site

As part of the program, HTK may publicize and/or promote the products, sales ideas, white papers or other educational materials from these sponsors. The aforementioned materials are designed to educate HTK's registered representatives and IARs on the firm’s products. Examples include:

  • HTK Connection, HTK's newsletter for its representatives and IARs
  • HTK's intranet site for its registered representatives and IARs.

All approved product sponsors of mutual funds, advisory products and direct participation programs are provided the opportunity to participate in HTK's Educational Partners Program. If firms are interested in participating in the program, they make payments to HTK, which enables them greater access and opportunity to educate our representatives and IARs. There is no requirement for an HTK representative or IAR to market or sell the products of the firms participating in the Educational Partners Program.

HTK does not allow additional commission or other compensation to be paid to its representatives or IARs for recommending an investment or product from a firm participating in the Educational Partners Program. Our representatives and IARs may recommend a product from any HTK approved product sponsor, with their recommendation based upon the client’s stated investment objectives and needs.

HTK, its representatives and IARs may receive other reimbursements from product sponsors in the form of attending a sponsor partner’s conference or seminar for educational purposes. The firm may reimburse or pay for travel and other related expenses incurred by HTK representatives and IARs to attend such conferences or seminars.

The following firms are participating in various educational activities in 2017 and may be part of the HTK’s Educational Partners Program. As such, some of these firms may have a fee arrangement to participate in the educational activities. The payments range from $1,000 to $120,000 annually.

  • Allianz Life
  • American Funds
  • AssetMark, Inc.
  • Brinker Capital, Inc.
  • City National Rochdale
  • Envestnet
  • Franklin Square Investment Corporation IV
  • Griffin Capital Essential Asset REIT II, Inc.
  • Griffin-American Healthcare REIT IV
  • Hines Global REIT II, Inc
  • Midland National Life Insurance Company
  • Morningstar Investment Services, Inc.
  • Nationwide
  • NorthStar Real Estate Income II
  • OppenheimerFunds
  • Putnam Investments
  • SEI Investment Management Corporation

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