Understanding how Janney and Your Financial Consultant are Compensated

Janney and its Financial Consultants receive compensation from the insurance company when you invest in annuities. The amount of compensation varies based on the type of annuity, the issuing insurance company, and the amount invested. You should discuss with your Financial Consultant the form of compensation she or he receives.
The amount of compensation, also known as a commission, is typically a percentage of the amount invested. In the case of variable annuities, Janney and its Financial Consultants may receive ongoing payments from insurance companies which are known as “trails.”

Through our relationship with insurance companies, Janney and our Financial Consultants may also receive other forms of compensation that do not directly affect the amounts our clients are charged for annuity transactions, including revenue sharing arrangements and promotional assistance.  These forms of additional compensation are generally referenced but may not be discussed in detail by an annuity’s prospectus or statement of additional information.  These forms of compensation are meant to cover a variety of initiatives and expenses incurred by Janney, including expenses associated with marketing annuities to investors, educating Financial Consultants, and performing administrative services for clients.  Since Janney and our Financial Consultants do not receive these forms of additional compensation from every insurance company with which we do business, we have a greater financial incentive to promote those insurance companies that do offer additional compensation.  However, our Financial Consultants frequently recommend, and you are free to choose, investments in fund families that do not offer additional compensation.

Revenue Sharing Arrangements

Janney incurs a variety of expenses in connection with educating its Financial Consultants and clients regarding annuity investments, and providing marketing and sales support to insurance companies.  Insurance companies may enter into revenue sharing arrangements with Janney in connection with the distribution of their annuities through our Financial Consultants.  Some insurance companies may also enter into revenue sharing arrangements to off-set the costs associated with Janney’s educational and marketing initiatives.  In exchange for entering into revenue sharing arrangements, Janney may provide insurance companies opportunities to (i) participate in Janney’s seminars with Financial Consultants and clients; (ii) distribute information regarding annuities to Janney’s Financial Consultants; (iii) review Janney sales data relating to certain Financial Consultants and annuities; and (iv) access Financial Consultants in Janney’s branches. 

Under a revenue sharing arrangement, an insurance company will agree to pay Janney a portion of the revenue generated from the sale and management of annuities in clients’ accounts.  Where Janney has entered into a sales-based revenue sharing arrangement with a particular insurance company, Janney typically requests a fee equivalent to .20%  of  the participating insurance company’s gross sales made through Janney during a given timeframe.  Where Janney has entered into an asset-based revenue sharing arrangement with a particular insurance company, Janney typically requests a fee equivalent to .10% per year of the assets managed by the participating insurance company for Janney’s clients.  Our Financial Consultants do not directly share in the fees received by Janney pursuant to its revenue sharing arrangements.

Janney attempts to impose a standard fee schedule upon all insurance companies whose annuities are sold through Janney and requests a minimum contribution of forty thousand dollars ($40,000).  Certain insurance companies, however, may not agree to comply with Janney’s standard fee schedule or minimum contribution amounts.  Other insurance companies who distribute annuities through Janney may elect not to participate in a revenue sharing arrangement with Janney.

For 2007, Janney has entered revenue sharing arrangements with the following insurance companies:

Insurance Company                                                         

• Allianz Life
• AXA
• Hartford Life
• ING
• Jackson National
• John Hancock Life
• Lincoln National
• MetLife Investors
• Nationwide
• Pacific Life
• Prudential
• Sun Life

During calendar year 2007, Janney received a total of $456,217.67 in revenue sharing payments from insurance companies. 

Promotional and Educational Assistance

Janney, our Financial Consultants and our clients may, from time to time, receive from insurance companies and their marketing representatives (known as wholesalers) occasional nominal gifts, meals, tickets to sporting events or other comparable entertainment, or payment or reimbursement in connection with conferences or meetings held for the purpose of training or educating clients, prospective clients or Financial Consultants.  From time-to-time, our Financial Consultants may also be invited to attend conferences or meetings sponsored by insurance companies.  These activities are also intended to result in the promotion of the insurance products marketed by the wholesalers.

Additional information is available on the Securities and Exchange Commission website http://www.sec.gov/investor/pubs/varannty.htm