During the normal course of business with an investment adviser representative (“IAR”) from Kestra Advisory Services, LLC or Kestra Private Wealth Services, LLC, (“Kestra”) you may be presented with marketing materials that describe an investment’s performance, the performance of a proposed portfolio of securities or the performance of an investment adviser. Performance information can be presented in many different ways and past performance does not predict future results. Hypothetical performance is one type of performance and refers broadly to backward looking or future looking return information that is not the actual returns of client accounts. Before making any investment decision, including selecting an investment adviser, you should understand how any performance representation is calculated and presented. Effective November 4, 2022, The U.S. Securities and Exchange Commission (“SEC”) prohibits investment advisers from showing hypothetical performance unless it is relevant to your likely financial situation and investment objectives, provides sufficient information to enable you to understand the criteria used and assumptions made when calculating such hypothetical performance, and provides sufficient information to you to understand the risks and limitations of using such hypothetical performance in making investment decisions. Further, investment advisers must ensure that when receiving hypothetical performance materials, you have access to the resources necessary to independently analyze hypothetical performance information through your IAR or otherwise and you have the financial expertise to understand the risks and limitations of hypothetical performance presentations. The purpose of this document is to define several types of hypothetical performance and discuss the risks associated with hypothetical performance presentations so that you understand the limitations of this type of information. Kestra makes additional resources available concerning performance information on our public website at https://www.kestrafinancial.com/disclosures. After reviewing this document, the resources Kestra makes available on our public website, and speaking with your IAR, we ask that you confirm your understanding of the risks and limitations of hypothetical performance presentations by signing below. You will not be provided hypothetical performance information unless you have signed this form.
Model performance represents the results of a model investment portfolio, and includes performance results generated by a model portfolio managed with the same investment philosophy used by the adviser for actual client accounts and consisting of the same securities recommended by the adviser to clients during the same time period, with variances in specific client objectives being addressed via the asset allocation process (i.e., the relative weighting of stocks, bonds, and cash equivalents in each account). This type of performance is hypothetical because although the model consists of the same securities held in client accounts, the asset allocation process results in performance results that were not actually achieved by any client. Models are often designed to represent the appropriate balance of securities for a client’s portfolio based on defined investment objectives and risk tolerance. Backtested performance represents results created by applying a strategy to market data from a prior time period when the strategy was not actually used during the prior time period. These presentations aim to show returns that theoretically would have been achieved if the strategy had been used during the time period shown and is often used when no actual track record exists or when actual results are only available for less than five years. Backtested results are constructed with the benefit of hindsight. As a result, an adviser can tweak a strategy to obtain favorable performance results. There is no assurance that the backtested results could, or would, have been achieved had actual client accounts been managed during the time presented. Likewise, there is no guarantee that the same allocations underlying for the strategy would have been selected if actual client accounts were managed during the period presented. The strategy underlying the backtested results may be changed at any time with the benefit of hindsight in order to obtain and show more favorable performance results and the allocations may continue to be tested and adjusted in the future. Targeted performance presentations reflect aspirational performance goals. Similarly, projected performance reflects an estimated return, which is often based on historical data and assumptions. Hypothetical performance can be misleading if not properly presented or kept in proper perspective. Please consider the following when evaluating any hypothetical performance and remember that your IAR is available to answer all of your questions regarding any of this information:
- The description of the model or strategy, assumptions, inputs and quantitative parameters necessary to interpret the theoretical results (e.g. all securities shown were available for the full time period; model assumes markets were sufficiently liquid to accommodate the model’s trades etc.). This information is typically included in the advertisement itself, within the body of the communication or disclosed through footnotes;
- The results are theoretical and do not reflect the performance of actual client accounts;
- Whether advisory fees, trading costs, or other fees were deducted from the performance figures;
- Any material changes to the model, assumptions, inputs or any other factors impacting results over the reflected time period;
- Any actual performance with respect to the client portfolios managed during the period of time pursuant to the model or strategy;
- Assumptions regarding cash balances and external cash flows;
- The treatment of reinvestment of income, capital gains, and withholding taxes;
- The possibility of loss;
- The dates over which the theoretical performance applies;
- Whether backtested data covers reasonable time periods and varying market conditions (both good and bad);
- Targets and projections are hypothetical in nature and should not raise unrealistic performance expectations;
- The hypothetical performance results do not represent the impact that material economic and market factors might have on the adviser’s s decision making process if the adviser were actually managing client money;
- Backtested hypothetical returns are dependent on the market and economic conditions that existed during the backtested period;
- Future market or economic conditions can adversely affect the returns; and
- Hypothetical backtested characteristics related to positions (e.g., volatility and cost), position sizes and sector weights might differ materially from actual client portfolio(s).
- No client of the investment adviser had the performance
When Kestra or your IAR displays hypothetical model portfolio results, the performance shown is based on various assumptions that rest on how asset classes and securities behaved in relation to each other in the past. Many of these assumptions will not hold true in the future or rest on hypotheses that do not exist in the real world. And in the case of backtested performance, Kestra or your IAR had the ability (with the benefit of hindsight) to change the model to obtain favorable performance results and the allocations may continue to be tested and adjusted in the future. Accordingly, the results do not represent the impact that material economic and market factors might have had on Kestra’s or your IAR’s decision making process in connection with the management of actual accounts during the time shown. There is no assurance that the hypothetical results could, or would, have been achieved by Kestra or your IAR in connection with their management of actual client accounts during the time presented. Likewise, there is no guarantee that Kestra or your IAR would have selected the same allocations or securities in connection with their management of actual client accounts during the period presented. It is important to consider the foregoing limitations with hypothetical performance when reviewing such results.
WealthPoint Important Disclosures
This material is intended for informational purposes only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax advisor or plan provider. The information included has been taken from sources, which we believe to be reliable, but there is no guarantee as to its accuracy. It is not a replacement for any account statement or transaction confirmation issued by the provider. Please compare these documents to your custodial statements for accuracy, as applicable. WealthPoint has made reasonable steps to accurately reproduce the information from your official account custodians. Differences in positions and valuations may occur due to the reporting dates used and differences in valuation sources and methods. Please contact the carrier or your financial representative if you have any questions about your statements. In the event of a discrepancy your official account statement valuations would prevail.
An investment in variable life insurance is subject to fluctuating values of the underlying investment options and entails risk, including the possible loss of principal. The performance of your account will vary and you may receive more or less than the amount invested. Product guarantees, including the death benefit, are subject to the claims-paying ability of the issuing insurance company. Loans and partial withdrawals will decrease the death benefit and cash value and may be subject to policy limitations and income tax.
An insurer’s financial strength rating represents an opinion by the issuing agency regarding the ability of an insurance company to meet its financial obligations to its policyholders and contract holders. A rating is an opinion of the rating agency only, and not a statement of fact or recommendation to purchase, sell or hold any security, policy or contract. These ratings do not apply to the safety or performance of any separate account.
This is a supplemental illustration and must be read in conjunction with the basic illustration. The basic illustration contains values using the same underwriting assumptions as this supplemental illustration and both have guaranteed charges and guaranteed interest rates and contains other important information. The Policy values reflect current policy charges, current cost of insurance rates, current mortality and expense risk charges, average fund expenses and the stated hypothetical gross rate of return. The policy values are hypothetical for illustration purposes only and may not be used to project or predict investment results. Policy values will vary based on the actual performance of sub-account investments selected, actual insurance charges over the life of the plan and the timing of the premium payments.
Illustrated Performance Disclosures
All policy values reflect current policy charges, current cost of insurance rates, current mortality and expense risk charges, average fund expenses and the stated hypothetical gross rate of return. The policy values are hypothetical for illustration purposes only and may not be used to project or predict investment results. Policy values will vary based on the actual performance of sub-account investments selected, actual insurance charges over the life of the plan and the timing of the premium payments. This summary is not complete without the actual illustration. Please refer to the actual illustration for more information about
the guaranteed elements of the policy and other important details.
Sub Account Performance Disclosures (for Variable Universal Life policies)
The fund performance data shown in this report was obtained through Morningstar and represents the individual net returns of the underlying funds shown in the report. Morningstar is a non-affiliated third party investment research and management firm that provides mutual fund information, news, commentary, portfolio analysis, comparison reporting and other services. Past performance does not guarantee future results. The fund performance data is being provided for informational purposes only and does not reflect the actual returns of the sub accounts in the variable component of the insurance policies that are invested in those funds, which may be lower or higher than the performance quoted due to the timing of cash flows, holding periods, sub account allocation changes, policy fees and other expenses. Policy fees or expenses include premium loads, cost of insurance, administration fees, mortality and expense risk charges, or any other charges that may be incurred under the policy. Policy returns would be significantly lower after all policy fees and expenses are deducted.
Securities offered through Kestra Investment Services LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. WealthPoint is a member firm of PartnersFinancial. Kestra IS and Kestra AS are not affiliated with WealthPoint, LLC or PartnersFinancial. WealthPoint, LLC is independently owned and operated. WealthPoint, the WealthPoint logo and Know your story are all registered trademarks of WealthPoint, LLC. Investor Disclosure: https://bit.ly/KF-Disclosures.
Life insurance services are provided through WealthPoint, LLC DBA WealthPoint Insurance Solutions, CA Insurance License #0N03255
