Our Financial Professionals1 aim to serve the interests of our clients and build long lasting, mutually valuable client relationships. To be more consistent with that aim, our Financial Professionals and managers do not receive commissions on the products they sell. They are paid a salary with the opportunity to receive additional incentives through fully discretionary bonuses.
Our Financial Professionals' personal performance against established key performance indicators and balanced scorecard objectives is considered in determining whether and how much to award each individual on a discretionary basis. Individual variable pay decisions will consider the effective management of risk, compliance, quality and values, as well as other factors, including the funding of the discretionary plan. Our Financial Professionals' personal performance is impacted by factors including their activities in meeting with clients and fulfilling clients' financial needs, the accumulation of assets, and the generation of income to HSBC Securities resulting from client investments.
In addition, our Financial Professionals and other agents are eligible to receive other benefits, which may be based on a Financial Professional's personal performance. Financial Professionals may participate in HSBC recognition programs involving travel and entertainment, and they are also permitted by law and by HSBC Securities (USA) Inc.'s (HSBC Securities) policy to receive certain forms of compensation from third parties (including mutual fund and annuity product providers) such as meals, occasional ticket to events, and gifts of a nominal value as permitted by industry regulations. Also, a mutual fund or annuity provider may sponsor events for educational purposes to which individual representatives may be invited. Such benefits also include transportation related to the above, and access to certain industry related conferences.
Participation in recognition programs is based upon personal performance, which is impacted by the factors noted above including the accumulation of assets and income for HSBC Securities, and therefore your Financial Professional has further incentives to recommend that a client invest assets with HSBC Securities.
HSBC Securities (USA) Inc. and HSBC Insurance Agency (USA) Inc. reserve the right, at their discretion and without prior notice to change the methods by which they compensate their sales professionals.
When acting as a broker, HSBC Securities (USA) Inc. earns revenue based on the proprietary and third party products and services provided to our clients. This includes commissions generated in connection with client transactions in funds, equities and fixed income products and revenue from other products we may recommend to you. For example, HSBC Securities (USA) Inc. earns revenue based on sales loads, commissions, or concession in connection with the offering of various packaged products, such as mutual funds, exchange traded funds (ETFs) or 529 College Savings Plans.
Further, HSBC Securities brokerage accounts are subject to fees and commissions as detailed in our published Fee and Commission Schedule. The Fee and Commission Schedule differs, depending upon whether the account is assigned an individual advisor, or is serviced exclusively through our Wealth Services Desk without an assigned advisor as a self-directed brokerage account with no available investment advice.
For investment advisory managed products, including Spectrum and MPA ("Managed Products"), HSBC Securities (USA) Inc. is the sponsor of the HSBC Securities (USA) Inc. Managed Products. HSBC Securities (USA) Inc. is a federally registered investment adviser (with the Securities and Exchange Commission) that serves as the Investment Adviser and receives management fees. HSBC Global Asset Management (USA) Inc. ("AMUS"), which is also a registered investment adviser, in connection with the Managed Products, provides administrative and other services to HSBC Securities (USA) Inc., and AMUS receives a portion of the management fee for the Managed Product from HSBC Securities for its services. AMUS also serves as the adviser and administrator of HSBC Funds, which may be among the underlying investments in the Managed Products; specifically the HSBC Money Market Mutual Funds are used as some of the underlying liquidity fund investments. Foreside Distribution Services, L.P., member FINRA, is the distributor of the HSBC Funds and is not affiliated with the Financial Professional. HSBC Securities (USA) Inc., member NYSE, FINRA and SIPC is a sub-distributor of the HSBC Funds.
Mutual funds (including ETFs) outside of the HSBC Fund family are also offered as options in the Managed Products and are advised by investment managers unaffiliated with HSBC Securities (USA) Inc., who also receive a fee for their investment services.
HSBC Securities clients may elect to have their idle cash balances swept into money market funds including funds that are managed by AMUS and affiliates, and for which they receive advisory fees. HSI clients may pay these fees, as well as their Program fee as permissible by law. Similar to the process described above, program fees for retirement accounts are reduced by the amount of advisory fees for the money market funds advised by AMUS.
If you would like a current copy of the ADV Part 2 for any of the parties involved in the management of the managed products, including applicable advisors, please contact an HSBC Securities (USA) Inc. Financial Professional. These documents contain complete information relating to the services and fees of the managed products.
As insurance agencies, HSBC Securities (USA) Inc. and HSBC Insurance Agency (USA) Inc. earn commissions for the sale of insurance and annuity products. The amount of commission is based on the premium that you pay for your insurance policy or annuity contract.
Please note that certain types of products (including different share classes of mutual funds) pay greater compensation than others to HSBC Securities (USA) Inc. or HSBC Insurance Agency (USA) Inc. Feel free to ask your Financial Professional about our compensation for any particular service or product that you purchase.
It is permissible for HSBC Securities (USA) Inc. and HSBC Insurance Agency (USA) Inc. to receive compensation from other sources, including reimbursements from third parties (including mutual fund and annuity product providers) for the cost of education programs and seminars for employees and clients or internal HSBC employee recognition programs or events. Third party support for education programs, marketing/advertising initiatives and seminars is approved and accepted on occasion, however it is HSBC's current practice not to accept third party financial support for internal HSBC employee recognition programs. The amount of these payments are not directly related to the level of assets you, or any other of our clients, invest in or with the product sponsor. Based on historic trends, HSBC Securities does not expect to receive gifts (and other non-cash compensation) in excess of the de minimis thresholds under the DOL regulations with respect to a Retirement Account.
The receipts of these payments are not connected, in whole or in part, with or to any specific or particular client transaction.
As stated above AMUS is an affiliate of HSBC Securities' (USA) Inc. (and HSBC Insurance Agency (USA) Inc.) and it earns additional revenue, including management fees, if you choose to buy a HSBC Fund. When offering mutual funds, our representative may recommend an HSBC Fund in a brokerage account other than a Retirement Account. Please refer to the fund prospectus and statement of additional information for more information about fees payable to HSBC affiliates.
Additionally, HSBC Securities (USA) Inc. may sell and be compensated for other proprietary products, including, for example, the sale of structured products issued by HSBC Bank USA, N.A. or HSBC USA Inc. affiliates. Our affiliates also earn revenue as described in the applicable offering documents.
Please note: After June 9, 2017, for IRA accounts or other qualified ERISA accounts ("Retirement Accounts") other than within a managed account that is subject to an investment advisory agreement, our Financial Professionals will make no mutual fund and no structured product recommendations whatsoever - whether proprietary or third party.
Further, as noted above, HSBC Securities (USA) Inc. is sponsor for managed products and it engages AMUS to perform certain services in connection with those managed products.
After June 9, 2017, new Department of Labor rules apply to retirement accounts when advice is given for compensation. HSBC Securities has simplified its offering for Retirement Accounts to focus on:
HSBC Financial Professionals will no longer provide investment recommendations on retirement assets in brokerage accounts, or with respect to adding premiums to, or making exchanges of, retirement variable annuities and retirement fixed deferred annuities.
If you have or are considering a retirement account with HSBC Securities for which you seek advice, please consider HSBC Securities (USA) Inc. Disclosure Regarding Our Services for Retirement Accounts available through the link to the right of this page.
|ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES||ARE NOT FDIC INSURED||ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY||ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES||MAY LOSE VALUE|
1 Financial Professional refers to Premier Wealth Advisors (PWA), Premier Relationship Advisors (PRA) and Financial Advisors (FA). PWA/PRAs primarily focus on a full suite of Premier products and services while FAs primarily focus on a full suite of Advance products and services. Both offer bank products through HSBC Bank (USA) N.A., investments and certain insurance products, including annuities, through HSBC Securities (USA) Inc. and traditional insurance products through HSBC Insurance Agency (USA) Inc.
© HSBC Securities (USA) Inc. 2017.
All Rights Reserved.