Judy Desepoli

You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying. Below is a summary description of the fees and costs you will pay based upon the services you select.

• Every time you buy or sell an investment, you will pay a transaction-based fee. A transaction-based fee is commonly known as a “commission.” The commission rate or amount you will pay for a transaction varies depending on the investment and the size or amount of the transaction.

• In addition to commissions, certain products, including mutual funds and variable annuities, have ongoing fees, such as 12b-1 fees and “trail commissions,” that will be paid to us for as long as you own the investment. Additional fees can include custodian fees, mutual fund expenses, and other fees and charges in connection with a specific type of account. These include transaction service fees, variable annuity and insurance product management fees, mortality and expense charges, rider fees, deferred sales or “surrender” charges on mutual funds and variable insurance products, and other miscellaneous account and service fees.

• Information regarding the fees and costs of mutual funds, annuities, and similar investments is available in the prospectus for the specific product. Contact your financial professional or call the product sponsor company for a copy of the prospectus.

• Brokerage account investors will be charged more when there are more trades in their accounts. As a result, Commonwealth has an incentive to encourage investors to trade often.

Commonwealth has prepared an Investor Disclosure Brochure to assist you in locating detailed information on fees, costs, and conflicts of interest involved in our brokerage services. This brochure can be found at www.commonwealth.com/for-clients.

When we provide you with a recommendation as your broker/dealer or act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the recommendations and investment advice we provide you. Here are some examples to help you understand what this means.

Commonwealth receives payments from third-party sponsor companies, such as unaffiliated mutual fund and insurance companies, in the form of due diligence fees, conference fees, and revenue sharing. Your financial professional does not share in these payments. This additional compensation to Commonwealth presents a conflict of interest because we have a greater incentive to make available or recommend investments that provide these additional payments to us over investments that don’t. Since the compensation we receive varies among and between issuers and different investments and types of investments that we offer as a broker/dealer, we have an incentive to sell you those investments that pay us more compensation.

Commonwealth’s clearing relationship with National Financial Services (“NFS”) provides us with substantial economic benefits and incentives to use NFS as our clearing firm and recommend investments on NFS’s platform. The money and benefits we receive from NFS create conflicts of interest between us and our clients. For example, Commonwealth and your financial professional share in the commissions you pay on buy/sell transactions executed through NFS, including the “markups” you pay when you buy or sell a security with us on a principal (dealer) basis. A markup is the amount you pay that is greater than the price of the security bought or sold. In addition, Commonwealth receives revenue from NFS based on the types of transactions recommended and the investments held in client accounts at NFS, including cash you hold in your Core Account Sweep Program. This program creates substantial financial benefits for Commonwealth and NFS. Your financial professional does not receive any of these payments. Investors should review items 5, 12, and 14 of Commonwealth’s Form ADV Part 2A Brochure, available at www.commonwealth.com/for-clients/disclosure/adv-part-2a, for more information about how we make money when providing advisory services and the conflicts of interest relating to our advisory business.

Investors should review our Investor Disclosure Brochure for more information about how we make money when providing brokerage services and the conflicts of interest relating to our brokerage business.

Commonwealth’s financial professionals are compensated based on a variety of factors, such as the amount of client assets they service; the time and complexity required to meet your needs; and the products, programs, or services offered or sold to you.

In addition to receiving commissions and/or advisory fees, your financial professional has the opportunity to receive “noncash compensation” in the form of reimbursements for marketing expenses and business development costs, as well as with invitations to conferences and due diligence meetings where travel-related costs, expenses, meals, and entertainment are paid for or subsidized by the investment product providers. This additional compensation presents a conflict of interest because it provides a financial incentive for your financial professional to recommend particular investment products that offer additional compensation over those that do not.