Our financial professionals are compensated with cash compensation. For brokerage services, “commissions” are charged on each investment. Commissions are paid to the Firm, which retains a portion and then pays the remainder to your Representative.

Stocks and ETFs: Generally, the customer pays a fixed dollar amount as a commission for the purchase or sale, which does not change based on the amount of the investment. This commission is usually added to the price of the shares you are purchasing, or is deducted from the proceeds of a sale you are making.

Mutual Funds: Generally, in brokerage but not in advisory accounts, a commission is charged on each purchase (a “front-end load.”) The commission is a percentage of your initial investment, and decreases the money invested in the fund. The mutual fund pays the commission to the firm, who retains a portion and pays the remainder to the representative. Additionally, mutual funds often, but not always, have trail fees. These are as high as 1% each year, but are commonly lower. Trail fees are paid to the firm by the fund. In brokerage, the firm retains a portion and pays the remainder to the representative. In advisory accounts, where ESI provides the brokerage services, trails are refunded to your account.

With stocks or ETFs, this fee is usually a separate commission. With other investments, such as bonds, this fee might be part of the price you pay for the investment (called a “mark-up” or “mark-down”). With mutual funds, this fee (typically called a “sales load”) that is charged by the fund and reduces the value of your investment.

Variable annuities are not held in brokerage accounts, but the insurance company issuing the contract pays the Firm a commission when their product is sold. The Firm then retains a portion of this commission, and pays the remainder to the Representative. The commission will not lessen the value of your investment at the time of purchase. However, the insurance company typically assesses a “surrender charge” if you surrender some or all of your investment too soon. In part, these charges recover the cost of commissions on investments that are not held as long as expected.

Fixed Indexed Annuities: Fixed Indexed Annuities (FIAs) are not securities. However, ESI does sell a number of these products through its registered representatives who may also be dually registered as IARs, in their capacity as insurance agents. The insurance company issuing the contract pays a commission, a portion of which is paid to the representative, a portion is paid to the Firm, and the balance is paid to the representative's supervisor. Representatives also typically receive marketing and other benefits by insurance marketing organizations. The insurance company typically assesses a “surrender charge” if you surrender all or some of your investment too soon; surrendering or replacing FIAs earlier and more frequently will result in costs to you, including reducing the total cash value of your annuities upon surrender. Fees and costs of FIAs differ by product. For a detailed description of fees, expenses, and revenue from the sale of these products, please see ESI's Regulation Best Interest disclosure document at www.equity-services.com.

For advisory services, the asset-based fees described above are deducted from your account and paid to ESI, who then retains a portion and pays the remainder to the representative(s) associated with your account. As discussed in the Firm's ADV Part 2A and 2A-Appendix 1 brochures, your representative is allowed to negotiate with you the asset-based fee for your advisory account, subject to the parameters established by the Firm. In general, when negotiating an asset-based fee, representatives will negotiate a fee that is based on the amount of work and the nature of services they will provide, in addition to their level of experience and expertise. Representatives will generally accept, as a fee, a lower percentage of the assets being managed, when your account is larger.

Non-cash Compensation. ESI also provides various non-cash incentives based on the achievement of sales numbers (based upon all sales), including promotions in which representatives receive awards such as travel to conferences with educational content, merchandise, computer hardware and/or software; paying for occasional meals, lodging and/or entertainment; and making cash payments in lieu of business expense reimbursements; and/or; employee benefits, such as health insurance, Social Security contributions, etc.

EQUITY SERVICES

Timonium, MD 21093

Shannon Ryan Addicks

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