Newport Group, Inc. and its affiliates (“Newport Group”) provide recordkeeping, plan administration, trust and custody, consulting, investment advisory, investment management, insurance and brokerage services. Newport Group Securities, Inc., an affiliate of Newport Group, Inc. (“NGS”), functions as a broker-dealer for the sale and administration of securities products, including variable insurance products, mutual funds and other securities, and as a registered investment advisor. InterServ, LLC (“InterServ”), also an affiliate, provides registered investment advisory services.
Business Continuity Plans
Newport Group maintains a number of active business continuity plans that are designed to respond to possible future business disruptions. Newport Group’s business continuity strategy addresses the issues associated with both short-term and long-term disruptions, including business processes and systems, data and technology, personnel, facilities, as well as internal and external communications. Alternative recovery and physical operations site arrangements are in place in order to facilitate uninterrupted processing of customer business activities in the event of a short-term or long-term disruption. In addition, alternative technology recovery sites have been established for all proprietary applications required to process Newport Group business activities. Each alternative technology recovery site is of significant distance from any affected location so that localized disruptions do not impact the ability to activate the recovery site. In addition, each technology recovery site utilizes separate utility services from those used by our primary operations. Newport Group’s technology recovery strategies also include redundant technology and communications systems designed to maintain uninterrupted contact with employees, customers, partners and vendors.
Newport Group’s plan is designed to quickly recover and resume normal business operations after a significant business disruption and respond by safeguarding employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing its customers to transact business. A copy of the NGS Business Continuity Plan is available to customers of NGS upon written request.
Compensation and General Business Arrangements
Newport Group receives compensation for providing services in a variety of ways, in accordance with applicable law and regulations. For example, Newport Group may receive fees from customers for consulting, administrative services and recordkeeping services. Newport Group’s SEC-registered affiliates may receive compensation for qualified plan investment advisory and investment management services. Expense reimbursements, and/or compensation from financial institutions such as insurance companies, mutual funds and fund management companies may be received for placement of insurance or other financial products.
Newport Group’s retirement plan recordkeeping, administration, trust and custodial services are provided on a fee-for-services basis. When providing these services, Newport Group may receive indirect compensation from mutual fund providers. These amounts are applied toward service fees or as otherwise provided in the service agreement with a customer.
NGS is dually registered with the SEC as an investment adviser and broker-dealer. InterServ is an SEC-registered investment adviser (“RIA”). Investment products constituting securities are sold through NGS while investment advisory and investment management services may be provided through NGS or InterServ. Non-securities insurance products are sold through The Newport Group, Inc.
Newport Group has entered into selling agreements with leading financial services firms, which allow it to conduct business with a broad range of mutual fund and insurance product providers. Investment providers contract with Newport Group’s qualified plan recordkeeping business line enabling Newport Group to offer mutual funds, collective funds, ETFs and other investment products to qualified retirement plan customers as available investment options for plan participants. Newport Group may receive indirect servicing fees from investment providers to assist those providers in fulfilling their legal recordkeeping obligations. Newport Group discloses indirect compensation to plan fiduciaries and other parties in accordance with the requirements of applicable law.
Newport Group also contracts with insurance carriers contract enabling the marketing of general account and variable account insurance products. Carriers typically pay commissions, in the form of first-year commissions based on premium, and pay trailing commissions based on renewals and/or cash values in exchange for policy servicing provided by Newport Group. Commissions on variable products are disclosed in the applicable prospectus or private placement memorandum. General account commissions may be disclosed upon request. Insurance products are typically marketed to corporations to finance executive benefit programs, to banks and casualty and other non-life insurance companies and to welfare benefit funds (VEBA trusts) to finance retiree medical programs.
NGS may also market mutual funds to corporations as an informal financing tool for executive benefit programs. When doing so, NGS acts in its broker-dealer capacity. Commissions on these products are disclosed in the applicable prospectus and Statement of Additional Information.
Investment advisory services are provided on a fee for service basis with no third-party compensation to NGS or InterServ. When servicing ERISA-covered plans, no third-party compensation is received with respect to investment advisory recommendations made by NGS or InterServ. NGS does not receive third-party compensation when advising non-qualified plans as an RIA, unless expressly disclosed to the customer. Further information on NGS and InterServ’s services is available through their Form ADV-Part- 2A filings. These Form ADV-Part 2A filings provide information regarding the qualifications and business practices of these Newport Group affiliates. Copies of the Form ADV-Part- 2A filings for NGS and InterServ are available upon written request.
Newport Group may also enter into supplemental arrangements related to certain insurance products that may provide additional revenue. These arrangements include, but are not limited to, technology development and support, policy administration or service-related compensation related to the amount of in-force policies. Payment through any such arrangement comes from the general revenues of an insurance carrier and is not attributable to any customer or policy. This type of payment generally is not shared with any registered representative and does not increase the cost to a purchaser of any product. Payments from such arrangements are expected to be less than 1% of revenue of the Newport Group companies.
Marketing and Educational Expenses/Potential Conflicts of Interest
Additionally, certain third-party institutions provide financial support to NGS in its broker-dealer capacity on a voluntary basis for marketing Newport Group services through educational and sales meetings. No such support is based upon any sales or distribution quotas or other metrics. Currently, the following institutions provide such support: American Century Investments, American Funds, Artisan Funds, BlackRock, Charles Schwab, Delaware Investments, Eaton Vance, Fidelity Investments, Franklin Templeton Investments, Goldman Sachs, Great-West Life, Hartford Funds, Janus Capital Group, Lake Partners, Lincoln Financial Group, MainStay Funds, MassMutual Life, Matrix Financial Solutions, Morley Financial, Nationwide Financial Services, Natixis Asset Management, Neuberger Berman, New York Life, Oppenheimer Funds, Philadelphia Financial, PIMCO, Principal Funds, Prudential Investments, Reliance Trust, Symetra Insurance, T. Rowe Price, Thornburg Investments, Titan Legacy Fund Advisors, Valmark Securities, Inc., Van Eck Funds, Voya Investment Management and Wilmington Trust Company. Collectively, payments from these types of arrangements are expected to be less than approximately 1% of the revenue of Newport Group companies.
Newport Group may make payments to selected persons for a variety of purposes, that may include paying for Newport Group employee’s attendance at educational seminars or paying such persons for marketing related or administrative activities. This type of payment does not affect the product cost to Newport Group customers.
As with any financial intermediary, certain aspects of our relationships with the firms with whom we do business may have the potential to create incentives for Newport Group to promote or to recommend one product over another product.
Additional detailed information regarding any of these arrangements is available upon written request. Newport Group reviews this Disclosure Page periodically and may make changes or updates at any time and from time to time without prior notice. Any modifications will be effective upon posting.
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