Regulus Revenue, Fees and Conflicts of Interest
This page is dedicated to the additional information not provided in the Regulus Client Relationship Summary (CRS). If you have not yet reviewed the CRS provided to you by your representative, please do so as it contains the basic information about Regulus and the relationship you can expect to have with your assigned representative. Below you will find additional disclosure of fees and the potential conflicts of interest that may exist for Regulus and any affiliated representatives. While not all the specific disclosures related to your representative will be listed on this page, there are links to additional sources of information on your specific representative.
The following list is a breakdown of the sources of Revenue collected by Regulus some of this revenue is kept by Regulus and some if passed along to the representative assigned to your account. Payout % paid to the representative on your account will differ based on the total Gross production by the representative according to the table below.
- The following table shows the Regulus standardized payout grid based on the gross production tiers listed. The rep will receive a payout percentage based on their gross production amounts; Regulus keeps the remaining percentage as revenue. General securities trades through Pershing are subject to an additional 10% override.
|Gross Production Amounts||Payout Percentage|
|$0 – $49,999||60%|
|$50,000 – $74,999||70%|
|$75,000 – $99,999||75%|
|$100,000 – $124,999||77.5%|
|$125,000 – $149,999||80%|
|$150,000 – $174,999||82.5%|
|$175,000 – $199,999||85%|
|$200,000 – $299,999||87.5%|
|$300,000 – $499,999||90%|
|$500,000 – $999,999||91%|
- The grid above applies to production levels, commissions and investment advisory fees, generated for both Regal Investment Advisors and Regulus, depending on affiliation. The product types listed below encompass the Regulus product suite.
- Please proceed to the next section on fees paid by the client for more details on the fees paid by the investor based on product type.
- Mutual fund trades
- Mutual fund trails
- Variable annuity purchases
- Variable annuity trails
- Variable life
- 401k, 403b, 401a and other retirement plan purchases
- 401k, 403b, 401a and other retirement plan trails
- 529 purchases and trails
- Equity trades
- REIT trades
- UIT trades
- Mutual fund trades
- Mixed income trades
- Options trades
- Alternative investment trades
Regulus also received Insurance Overrides from Insurance Marketing Organizations that are paid to Regulus from the product types listed below:
- Fixed Index Annuity purchases
- Life Insurance purchases
- Long Term Care Insurance purchases
Regulus also receives revenue from representatives for affiliation fees related to:
- Service items
- Other miscellaneous items
Fees Paid by the Investor: Fees Paid by the Investor may detract from the total return.
- The front-end sales charge: Deducted from the initial investment on certain share classes, this charge normally ranges from 0.00% to 5.75%. Some purchases may qualify for a reduced front-end sales charge due to breakpoint discounts and rights of accumulation. In addition, some purchases may qualify for a sales charge waiver based on the type of account or other qualifiers.
- Custodian Fees: You may also pay fees related to the custodian that holds your accounts.
- BDC Fee Description: In addition to the commissions paid to the selling representative, BDCs may charge management fees, incentive fees, as well as other fees associated with servicing loans.
- REIT Fee Description: In addition to the commissions paid to the selling representative, REIT may also be subject to servicing and other management fees depending on the structure of the REIT.
- Variable Annuities: Fees including but not limited to contract fees, mortality and expense charges, sales charges, management fees and surrender charges.
- 529 Plans: Fees including but not limited to a front-end sales charge and management fees.
- Stocks, bonds and Exchange-Traded Funds (ETFs): Stock, bond and ETF fees are usually a separate commission negotiated with the customer.
Bonds: With 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 “load”) reduces the value of your investment. Mutual fund loads may be a front-end sales charge, or deferred sales charge. They also may charge annual distribution fees, management fees, and 12b-1 fees.
- The following impact your Representative’s income: The production levels in the table above are the combined annual gross revenue generated for both Regal Investment Advisors and Regulus, depending on affiliation.
- Payout rate is reassessed each year at the beginning of the year. The review is based on the previous 2 years of average production.
- Payouts for new representative are based on expected production levels set forth in their affiliation offer These are based on where the representative is expected to fit in the standardized grid. Payouts are reviewed at nine months post-affiliation to ensure itt is congruent with the representatives production trajectory. Payout may be adjusted at this time.
- Fixed annuity production which does not flow through the broker/dealer grid does not count toward gross production
- Any producer group or OSJ overrides are in addition to the above grid unless a negotiated and approved exception has been made in writing by the Regal executive team.
- Example: An Affiliate that produces $135,000 is on an 80% payout, meaning Regal has a 20% production If the Affiliate has a branch manager who receives a 5% override on the Affiliate’s gross production, the Affiliate will be on a net 75% payout, with 5% going to their branch manager and Regal maintaining its 20% override.
Outside Business Activities: A general conflict typically exists when an employee engages in a business activity outside of the firm for compensation. Regulus monitors the outside business activities of our financial professionals and ensures any relevant outside business is disclosed via the financial professionals U4. Please search for your representative via Brokercheck https://brokercheck.finra.org/, for a detailed report on any disclosures or outside business activity specific to their registration with Regulus.
Monthly payment from North Star based on the value of the former Regal Total Return Fund.
- Pursuant to an agreement in place with North Star Investment Management Corporation (NS), Regulus receives an annual fee of 0.45% of assets invested in certain North Star funds by investors referred by Regal Investment Advisors, an affiliate of Regulus. This presents a conflict of interest as Regal has an incentive to encourage representatives, or clients through financial planning services, to invest in certain mutual funds managed by North Star.
NorthStar / Durand / Regal Relationship
- NorthStar Capital Management Corporation (NS) assists in the investment management of the Durand portfolios for the Regal Holdings (Regal) Lionshare platform. NS provides services for the Durand funds limited to investment selections and decisions regarding both securities acquisitions and disposals in accordance with the established investment principles, parameters and criteria of the portfolios. The services do not include trade execution, rebalancing, performance reporting, fund accounting or regulatory reporting. Compensation for the services will be 10% of the fees collected for investment management by Regal after any payouts to distribution partners. Additional compensation will be provided to NS based on the incentives below:
- Asset Growth Incentive: A 10% bonus will be paid annually if the total assets under management (AUM) exceeds the previous years AUM but greater than 15% beyond the market growth of the portfolio.
- Benchmark Achievement Incentive: A 1-% bonus will be paid of 5% if the portfolios relevant benchmark s exceeded by 15% and an additional 5% if the portfolios benchmark is exceeded by 25%.
- Qualified Retirement Plan (QRP) to a brokerage Rollover Individual Retirement Account (Rollover IRA) – fee changes
- Payment or reimbursement for the costs associated with education or training ( ie. going to product due diligence meetings)
- RR may receive gifts
- RR may be motivated to place trades ahead of clients (or some other trading scheme)
- Reimbursement for products, research or technology
- Distinction between holding products directly with sponsor or in a brokerage account