Robert J. Caldwell

• Principal Fees and Costs: For MMLIS Managed Accounts and Solicitor Programs, these include advisory fees, product fees, and account fees. You pay more in fees as the assets in your account increase; which means we have an incentive to encourage you to increase the assets in your account. For financial planning services, the principal fee is a financial planning fee.

• Advisory Fees: You pay an advisory fee, generally on a quarterly or monthly basis, based on the amount of assets in your account. If your account is a “wrap” program, the advisory fee covers certain fees and costs for account transactions; if not, you pay transaction fees on trades in your account. The advisory fee for wrap programs is typically higher than the advisory fee for non-wrap programs because the advisory fee covers transaction fees. In most cases, the advisory fee for wrap programs and non-wrap programs will be higher over time than commissions or fees paid for brokerage services. For some accounts, there are optional services you can select for an additional fee.

• Product Fees: Product fees for investments in MMLIS Managed Accounts and Solicitor Programs work the same as they do for securities held in brokerage or directly held accounts.

• Account Fees: You may pay an annual account fee as well as service fees (for things like wire transfers or account closures). These fees are deducted directly from your account. For certain MMLIS Managed Accounts and Solicitor Programs you pay a separate custody and clearing fee.

• Financial Planning Fees: Financial planning fees generally range from $500 to $25,000 per year. Fees can be paid in full or in installments.

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 to you. Here are some examples to help you understand what this means.

• Asset-Based Compensation: For MMLIS Managed Accounts, you pay us asset-based advisory fees. When MMLIS acts as a sub-manager, we also receive an additional fee. For Solicitor Programs, the investment adviser pays us a part of the advisory fee it receives from you. Because you pay more in fees as the assets in your account increase, we have an incentive to encourage you to increase the assets in your account.

• Third-Party Payments: We receive 12b-1 fees from certain mutual funds held in your account as well as fees from some product issuers. These fees create an incentive for us to promote and select those funds and products and encourage you to increase the amount of assets in your account. We credit the 12b-1 fees we receive back to your account.

• Revenue Sharing: Many product issuers, investment managers, and other third parties, such as our clearing firm, share some of the revenue they earn on your account assets with us, including payments in connection with the cash sweep options. These payments create an incentive for us to offer and recommend their products and services and to encourage you to invest in them. We do not share this revenue with our financial professionals.

• Proprietary Products: Products issued, managed, administered, or distributed by MassMutual® and its affiliates are available in our managed accounts. Offering these products is a conflict for us because our affiliates receive compensation if we select them as investments for you.

• Certain MMLIS Managed Accounts: We are the broker-dealer for some MMLIS Managed Accounts. In that situation, we receive a higher percentage of the advisory fee and more revenue sharing. This creates an incentive for us to offer and recommend these accounts over others and to encourage you to increase the amount you invest.

• Commissions and advisory fees vary by investment and service. Our financial professionals can also adjust the commissions on individual securities trades and the advisory fees for managed accounts and financial plans, within approved ranges. We pay our financial professionals a portion of these commissions and advisory fees. The portion we pay a financial professional varies based on a number of factors including the financial professional’s prior compensation and total client assets, as well as total advisory fees and asset growth in certain products and services. While our financial professionals have to act in your best interest and not put their interest ahead of yours, this creates an incentive for our financial professionals because they earn more as they gather more assets (both brokerage and managed), sell more investments and advisory services, generate more fees and commissions, and increase brokerage and managed account assets (both overall and in the products and services that increase their compensation more than others).

• Most of our financial professionals are licensed to sell variable insurance products on behalf of MassMutual. Most of our financial professionals are agents of MassMutual but some are brokers. To maintain their agent status, financial professionals are required to meet minimum sales thresholds of MassMutual annuity and insurance products. Sales of MassMutual variable insurance products count toward financial professionals’ eligibility for MassMutual health and retirement benefits as well as rewards, recognition, and trips provided by MassMutual or MMLIS. Some of our financial professionals must meet minimum sales thresholds related to investments and advisory services.

• Product issuers and sponsors provide our financial professionals with business entertainment; expense reimbursement for travel associated with educational or other business meetings; financial assistance to cover the cost of investment tools, marketing expenses, and sales events; and business courtesies, such as branded merchandise. We place reasonable limits on what our financial professionals may accept, but the receipt of these gifts, entertainment, and payments is a conflict of interest because financial professionals may be more likely to recommend products or services that offer them.