Information about Fees and Other Compensation

Morgan Stanley is part of a global financial services firm and, together with our Affiliates; Morgan Stanley is engaged in the investment banking, securities and investment management businesses. As part of these businesses, we are engaged in securities underwriting, distribution, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. In connection with these various activities, certain conflicts of interest may arise.

Trading Activities

  • When Morgan Stanley executes trades of financial instruments (e.g., stocks or bonds) on behalf of investors, Morgan Stanley generally earns more revenue if we purchase or sell the product from our own or an Affiliate’s inventory (a principal trade) than we would if we executed the trade with a third party in the market.
  • Orders for certain securities transactions are routed through an Affiliate of Morgan Stanley and could generate additional revenue for Morgan Stanley from third parties, through payment for order flow or other compensation arrangements. Trades can also be routed to exchanges or venues in which Morgan Stanley has a financial interest.
  • When executing a securities transaction at the request of an investor, the timeliness or speed with which the trade is completed, and/or the price at which the trade is executed could negatively impact the investor while positively impacting Morgan Stanley, an Advisor or another Morgan Stanley client.
  • Morgan Stanley’s and its Affiliates’ trading patterns, including (among other things) trading and hedging activities, may negatively impact the price or availability of securities that an investor holds, or would like to hold.
  • As part of its trading or Investment Management activities Morgan Stanley or its Affiliates may hold a security that is also held by an investor, but the two parties may have conflicting interests in the direction of price movements (e.g., Morgan Stanley is net short a stock, while the investor is net long). In addition, Morgan Stanley may take a position with respect to a corporate action, such as a bankruptcy, reorganization or other voting matter that conflicts with the interests of investors.
  • In situations where a limited quantity of a product is available, Morgan Stanley and/or an Advisor must decide to which investor a particular product is offered, resulting in conflicts between Morgan Stanley’s clients.
  • Content generation and ideas for trades and other investment activities may in some cases be produced by areas within the Firm that hold positions or engage in other investment activities that are the subject of the content and trade or other investment ideas

Investment Banking and Underwriting Activities

  • Morgan Stanley’s Affiliates provide investment banking and other services to a wide variety of clients. Investors may hold securities of these clients and Morgan Stanley may, from time to time, recommend the purchase or sale of these securities. These activities may occur while Affiliates of Morgan Stanley are assisting the issuers of those securities in connection with transactions that may adversely impact investors’ transactions in those securities. These other client relationships create a Material Conflict of Interest.
  • There may be periods during which Morgan Stanley is not permitted to recommend or initiate certain types of transactions in the securities of issuers for which Morgan Stanley or its Affiliates are providing broker-dealer or investment banking services or where Morgan Stanley or its Affiliates have material non-public information about such issuers.

Investment Management Activities

  • In connection with its Investment Management business, Affiliates of Morgan Stanley may hold positions in securities that are also held in investor accounts. The investor and Morgan Stanley’s Affiliates may have different interests in the direction of price movements in these securities (e.g., Morgan Stanley is long a stock, but investor is short the same stock).

Research Activities

  • Morgan Stanley and its Affiliates do and seek to do business with companies and funds covered by its research departments. As a result, investors should be aware that Morgan Stanley and/or its Affiliates have a conflict of interest that could affect the objectivity of its research and other investment materials.

It is important that you carefully review this information at the time we provide you with a recommendation or solicitation. Should you have any questions or need any additional information, please contact your Financial Advisor/Private Wealth Advisor or the Manager at the branch office where you maintain your account(s).

General Information

Lending Services Fee Disclosures

How Morgan Stanley Compensates Your Financial Advisor

For lending products, a Financial Advisor’s compensation will include commissions paid for referring clients to loans, including loans made by MSSB affiliates. For Margin, Express Credit Lines, Liquidity Access Lines, Financial Advisors are credited with up to 65 basis points of the balance of the loan depending on the spread of the individual loan. For letters of credit issued under a Liquidity Access Line, Financial Advisors also receive compensation equal to 15% of the standby letter of credit fees referred to below. For Tailored Lending, Financial Advisors are credited the product of up to 12% of the loan’s spread times the loan’s average monthly balance for the life of the loan depending on the spread of the individual loan. Financial Advisors may also be credited for up to 12% of closing fees and/or upfront facility fees paid on a Tailored Lending credit facility. For letters of credit issued under a Tailored Lending credit facility, Financial Advisors also receive compensation equal to 12% of the standby letter of credit fees. For residential mortgages, Financial Advisors are credited with either 60 or 75 basis points of the original principal balance. For CREF, Financial Advisors are credited the product of 12% of the loan’s spread times the loan’s average monthly balance for the life of the loan. Morgan Stanley also has partnerships with third-party lenders. Your Financial Advisor may receive a fee for placing certain non-mortgage loans with third-party lenders. The fees vary according to the specific third-party program.

In addition, Financial Advisors may be eligible for bonuses, based on the total gross revenue he or she generates during the year, his or her length of experience in the wealth management industry, his or her clients’ Margin, Liquidity Access Line, Express Credit Line and Tailored Lending balances, and the number of new lending units opened during the year.

How Morgan Stanley is Compensated by You

Morgan Stanley offers a variety of lending products to individuals and businesses. We are compensated for these services in two ways: through fees when the loan or line of credit is initially established and/or through ongoing interest charges. These fees and payments depend on the type, structure and duration of the advance. For margin and Express CreditLine, you are not charged upfront fees. Normally, ongoing interest charges are calculated and paid based on a variable interest rate. Principal is usually repaid at your discretion, although we may exercise our rights under our agreement with you at any time if there is a collateral shortfall.

For a Liquidity Access Line, clients are typically not charged upfront fees to set up the line of credit. Various loan structures can be established in one loan account, including a variable rate advance and fixed rate advance. Fixed rate advances may carry prepayment fees. The ongoing principal and interest payments depend on the type, structure and duration of the loan. Principal is usually repaid at the client’s discretion, although Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A., as applicable, may exercise its rights under its agreement with you at any time, including if there is a collateral shortfall. You can also establish a standby letter of credit. Fees on standby letters of credit are based on the issuance amount of the letter of credit. Fees, interest and principal payments are paid to Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A., as applicable. Liquidity Access Line is a securities-based loan/line of credit product, the lender of which is Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A., as applicable, each, an affiliate of Morgan Stanley Smith Barney LLC. Clients may be responsible for fees of a third-party law firm engaged by Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A. to review complex Liquidity Access Line transactions (e.g., review of trust agreements). Clients will also be charged a fee for the issuance of a letter of credit, prepayment of principal on fixed rate advances and upon a client’s request for certain cash management services (e.g., duplicate statement and check reorders).

Morgan Stanley Private Bank, National Association, an affiliate of Morgan Stanley, offers a variety of Tailored Lending loan solutions; some may require closing fees and/or upfront facility fees in addition to interest and/or principal payments based on the type, structure and duration of the loan. Fixed rate advances may carry prepayment fees. You can also establish a standby letter of credit. Fees on standby letters of credit are based on the issuance amount of the letter of credit. Fees, interest and principal payments are paid to Morgan Stanley Private Bank, National Association.
Residential mortgage loans are made by Morgan Stanley Private Bank, National Association, an Equal Housing Lender, an affiliate of Morgan Stanley Smith Barney LLC. Some mortgage loans may involve an origination or underwriting fee, which is retained by Morgan Stanley Private Bank, National Association. In all residential mortgage loans, clients will pay closing costs to third parties who are not affiliated with Morgan Stanley.

Additional information by investment product

529 Plans

The fees and expenses commonly associated with 529 Plan investments include the following. A more complete description is available here: http://www.morganstanley.com/wealth-investmentsolutions/pdfs/529plan.pdf

State Administration Fees

To help pay for the operation of the plan, some state sponsors of 529 savings plans charge a state administration fee assessed as a percentage of portfolio assets. This fee is charged by the plan, if applicable, and not by Morgan Stanley.

Annual Maintenance Fees/Enrollment Fees/Termination Fees

These fees are generally imposed as a specific dollar amount, and apply at specified times or upon certain events (e.g., initial purchase, termination or on the account anniversary). This fee is charged by the plan, if applicable, and not by Morgan Stanley.

Revenue Sharing and Administrative Service Fees

Morgan Stanley receives a support fee, also known as revenue sharing, based upon Morgan Stanley clients’ mutual fund holdings, including some Section 529 plan holdings. Revenue-sharing fees are paid from the assets, revenues or profits of the fund or plan’s investment manager and/or other service providers — not from the fund or plan itself. Morgan Stanley also receives fees for administrative support services provided to mutual fund families and some 529 plans.

Sales Charges, Distribution and/or Service Fees

Depending upon the Share/Unit Class selected, a front-end sales charge of up to 5.75% may be assessed on your purchase. In addition, annual distribution and/or service fees may apply. These fees, similar to the “12b-1” fees charged by some mutual funds, generally range between 0.25 percent and 1.25 percent of your investment, annually. Your Financial Advisor receives a portion of these sales charges and distribution fees as ongoing compensation for selling and servicing the 529 plan.

Program Management Fee

The program manager of each 529 savings plan generally receives a program management fee. The program management fee compensates the manager for providing investment advisory, distribution, marketing, accounting and other services to the plan. The fee is generally assessed as a percentage of portfolio assets. This fee is charged by the plan, if applicable, and not by Morgan Stanley.

Alternative Investments (AI)

Administrator, General Partner and Ongoing Operating Expenses

Fees charged to clients by the fund to pay fund administrators and any ongoing fund expenses. Morgan Stanley does not earn these fees.

In some limited cases a sponsor fee may be included. This is paid by the client whoever receives the service, and is used to compensate the General Partner for certain administrative and reporting services, and ongoing operation of the feeder fund.

Please refer to the Private Placement Memorandum [PPM] for additional detail.

Fund Management Fee(s)

Fee charged by the underlying fund sponsor for managing the fund assets. This usually ranges from 0-2.25%.

Please refer to the Private Placement Memorandum [PPM] for additional detail.

Manager Revenue Sharing Fee(s)

Fee paid by the fund sponsor to Morgan Stanley to maintain and enhance the product platform including the ongoing support of the sales infrastructure. This fee is applicable to certain AI products sold on a placement/brokerage basis for which Morgan Stanley acts as the placement agent. This usually ranges from 1.5-2.5%.

Performance Incentive Fee(s) or Allocation(s) [Carried Interest]

Fund sponsor gets paid or allocated a certain percentage of the fund's net profits. For certain funds, the fund sponsor does not receive this share of the net profits until the return achieved by an investor has crossed a threshold or hurdle. The percentage usually ranges from 0 - 25%.

Program Participation Fee

Fee charged by program manager from Morgan Stanley for proprietary feeder hedge fund platform.

Minimum Investment:    Minimum Investment: $100,000
Fees for Non-Advisory (Placement) Clients
(Aggregate Invested) Upfront Fee Upfront Compensation
Up to $249,999 3.00% 3.00%
$250,000 to $999,999 2.00% 2.00%
$1,000,000 and above 1.00% 1.00%
 
(Aggregate Invested) Program Participation Trailing
Less than $5,000,000 1.00% 0.75%
$5,000,000 or Greater 0.65% 0.50%
 
Fees for Advisory Clients
(Aggregate Invested) Upfront Fee Upfront Compensation
Up to $249,999 None None
$250,000 to $999,999 None None
$1,000,000 and above None None
 
(Aggregate Invested) Program Participation Trailing
Up to $4,999,999 None Advisory Fee
$5,000,000 and above None Advisory Fee

Referral Fee

Morgan Stanley may be compensated by the fund sponsor or investment manager (who may be an affiliate) for introducing or referring an investor to the fund sponsor and/or investment manager. These fees typically are either structured as a one-time payment from the fund sponsor to Morgan Stanley that generally ranges from 0.50% to 1.00% or as an on-going periodic payment to Morgan Stanley that generally ranges from 0.10% to 0.25% of the aggregate amount of investments by referred investors who invest in the products or services of the fund sponsor.

Service Agreements Fee(s)

Fee paid by fund sponsor to Morgan Stanley for the provision of ongoing services relating to an Alternative Investment (AI) position that was purchased by the investor at a prior broker-dealer and subsequently was transferred to Morgan Stanley. This usually ranges from 0-1.0%.

Trailer Fee and Investor Servicing Fee(s)

Fee paid by the fund or clients compensating Morgan Stanley for assistance with the sales, distribution, retention of interests, investor servicing, and/or other services provided. This usually ranges from 0-2%.

Training, Education, and Data Analytics Payments

Fees paid by Asset Managers to Morgan Stanley for data analytics and reimbursements for training and education. Fees are up to $300,000 per annum for training and education, and up to $50,000 per annum for data.

Upfront Placement Fee(s)

Fee paid by an investor or the underlying fund sponsor to Morgan Stanley as the distributor for introducing the investor to the fund. This fee is a percentage of the commitment or investment amount and changes based on the size of the investment. Generally it is up to 3%.

Solicitation Fee(s)

Fee paid to Morgan Stanley by the fund sponsor or investment manager (who may be an affiliate). Solicitation fees are not charged to advisory clients. This is often applied when the firm is not acting as a placement agent or investment adviser and can also be used when introducing clients to investment managers who will manage client portfolios of alternative investments.

The ongoing referral fee usually ranges from 0.500-0.625%.

American Depository Record (ADRs)

Middle Markets

The Equity Middle Markets business serves certain qualifying institutional accounts at Morgan Stanley Smith Barney and facilitates trading on Morgan Stanley & Company’s (MSCO) trading platforms. Commission is charged by Morgan Stanley Wealth Management (MSWM), and MSCO with respect to such equity trades (other than some preferred stock trades) when MSWM and MSCO serves as a broker for its client.

ADR Custody Fee(s)

Fee charged by the ADR Agent for holding the ADR, maintaining records and managing dividend payments to the investor. Please refer to the prospectus for additional detail.

ADR Dividend Fee(s)

Fee charged by the ADR Agent when an investor receives dividends from their ADR investment. Please refer to the prospectus for additional detail.

ADR Exchange Fee(s)

Fee charged by the ADR Agent to the investor when the investor exchanges ADRs for foreign ordinary shares, or vice versa. Please refer to the prospectus for additional detail.

ADR Termination Fee(s)

Fee charged by the ADR Agent to the investor when the investor terminates ADRs and receives cash. Please refer to the prospectus for additional detail.

Processing Fee

Transaction processing fee charged by Morgan Stanley applied to certain executed orders (e.g. equities, fixed-income, transactional futures, UITs, mutual funds and precious metals) and applies to all account types (excluding advisory accounts, 529 Plans and Choice Select). The fee is charged only once per security, per day, for trades done on the same side of the market (multiple buy trades, or multiple sell trades of the same security, on the same day, the charge will only be added to one of the trades. $6 is charged per E-delivery per transaction, $6.50 is charged per paper per transaction. This fee does not apply to Middle Markets virtual branch clients.

Stamp Duty (Foreign Transaction Tax)

Fee charged by France and Italy on both buy and sell transactions for equities issued by French or Italian companies. The following formula is used to calculate the maximum fee amount:

French Maximum Fee Amount = PV* 0.3%

Italian Maximum Fee Amount = PV * 0.2%

Supplemental Transaction Fee

Additional fee charged by MS on all exchange traded products for the cost of processing trade transactions. This fee is 0.002310% of the principal value of the trade, rounded up to the next penny. For a $1 million principal trade this fee would be $23.10.

Trading Commission

Commission charged by Morgan Stanley with respect to trades when Morgan Stanley serves as a broker for its client accounts with respect to such transactions.

Effective May 1st, 2017 the maximum commission amount charged to clients for trades is a percentage of Principal Value (PV) ranging from 0.50% to 2.50%, depending on the Principal Value of the trade. The commission for a given trade is determined on a marginal basis, meaning clients will be charged progressively lower percentage rates at higher Principal Value amounts. Therefore, the higher the Principal Value of the trade, the lower the effective percentage rate that will be applied.

Voluntary Reorganization Fee

Fee charged by Morgan Stanley for when a stock splits and results in a delivery of new shares and/or payout. $25 per/transaction.

Annuities

Understanding Variable Annuities

Administrative & Distribution Fee

Represents the cost associated with servicing the annuity, including transferring funds between subaccounts, record keeping [confirms and statements] and customer service. Administrative fees are deducted from the value of the subaccounts and typically range from 0% to 1.20% annually. This fee may vary per state and year of purchase.

Contract Maintenance fee (or "Annual Fee")

Annual flat fee charged by insurers for record keeping and administrative purposes. The fee typically ranges from $30 to $50 and is deducted on the contract anniversary. This fee is typically waived for contract values over $50,000. This fee may vary per state and year of purchase.

Meeting reimbursement fee/marketing distribution fee

For carriers that have products currently available for sale, Morgan Stanley may be given a lump sum by insurers typically in the range of $65,000 to $245,000 to offset expenses incurred by Morgan Stanley for internal sales events and training programs, as well as client seminars, conferences and meetings held in the normal course of business. Fee varies based on insurer participation in all events. Expenses are reimbursed and amount left over will be rolled to next year.

Mortality and Expense Risk (M&E)

The M&E charge compensates the insurance company for insurance risks and other costs it assumes under the variable annuity contract. M&E charges are deducted from the value of the subaccounts (i.e., the investment options selected). This fee may vary per state and year of purchase. [Depending on the insurer, this fee may include the Administrative & Distribution fee].

Support Fee

Beginning in Q2 2017, each current variable annuity provider pays a quarterly support fee of $125,000 to Morgan Stanley. This payment helps offset administration and distribution expenses for maintaining MS annuity platform.

Revenue Share

For annuity products that have been offered or are currently offered, Morgan Stanley collects a revenue sharing payment from insurance companies. Insurance companies currently pay 0.11% on all variable and index assets under management. —including assets invested in fixed rate subaccounts within variable annuities—invested in contracts for which Morgan Stanley is designated as the broker-dealer or agent of record. Revenue sharing payments and Product Support Fees are paid out of the insurance company’s revenues or profits and not from a client’s contract value or the assets invested in the subaccounts. It is important to note that our Financial Advisors/Private Wealth Advisors receive no additional compensation as a result of these revenue sharing payments.

Rider fee

Fee charged by insurer for the election of certain or many benefits (i.e., living or death). The fee varies depending on rider type and carrier. The current cost for optional death benefits typically ranges from 0.20% to 1.50% annually.

The cost for optional living benefits typically ranges from 0.30% to 2.00% annually. The costs (or fees) may be identified as static or dynamic. Dynamic fees may go up or down, with the range bound by contractual limitations, and in certain instances are tied to a specific benchmark (e.g., VIXX or U.S. 10-Year Treasury). This fee may vary per state and year of purchase. Review the prospectus for specific details.

State Premium Tax

Premium tax is levied by the clients resident state, and may be processed/collected through the insurer . Please speak with your tax professional for more details.

Surrender Charge (CDSC)

Fees charged for early termination or a partial withdrawal (in excess of a specified permitted amount) during the surrender period of the annuities contract. Calculation methodology is carrier and product specific. CDSC typically ranges from 0% to 9% and subsequently declines to zero over the typical range of 0-10 years. This fee may vary per state and year of purchase.

Technology & Data Support Fee

Morgan Stanley may be paid a fixed amount by insurers to offset expenses incurred by Morgan Stanley for Technology & Data maintenance and development. This fee varies across insurers typically in the range of $10,000 to $20,000 and is paid annually. Fee varies by size of insurer annuity product offering.

Upfront Commission

Commission paid to Morgan Stanley for sales-related activities in relation to each annuity investment. Commissions may vary based on product category [e.g. variable, fixed etc.], commission option elected, and the owner's age.

Trail Commission

Commission paid to Morgan Stanley by providers for providing ongoing customer support and services for in-force variable annuity contracts. Trail commissions/service fees are payable after a specified time period from the investment date and provide recurring compensation to Morgan Stanley.

 

Product Purchase age Upfront Commission Annual Trail Trail Start
Fixed Annuity - All Carriers / All Products - 3 Year Surrender Period 0 - 80 years 2.000% 0.250% Month 37
81 - 85 years 1.000% 0.250% Month 37
86 - 90 years 0.500% 0.250% Month 37
Fixed Annuity - All Carriers / All Products - 4 Year Surrender Period 0 - 80 years 2.250% 0.250% Month 49
81 - 85 years 1.125% 0.250% Month 49
86 - 90 years 0.570% 0.250% Month 49
Fixed Annuity - All Carriers / All Products - 5 Year Surrender Period 0 - 80 years 2.500% 0.250% Month 61
81 - 85 years 1.250% 0.250% Month 61
86 - 90 years 0.630% 0.250% Month 61
Fixed Annuity - All Carriers / All Products - 6 Year Surrender Period 0 - 80 years 2.750% 0.250% Month 73
81 - 85 years 1.375% 0.250% Month 73
86 - 90 years 1.375% 0.250% Month 73
Fixed Annuity - All Carriers / All Products - 7 Year Surrender Period 0 - 80 years 3.000% 0.250% Month 85
81 - 85 years 1.500% 0.250% Month 85
86 - 90 years 0.750% 0.250% Month 85
Fixed Annuity - All Carriers / All Products - 8 Year Surrender Period 0 - 80 years 3.250% 0.250% Month 97
81 - 85 years 1.625% 0.250% Month 97
86 - 90 years 0.810% 0.250% Month 97
Fixed Annuity - All Carriers / All Products - 9 Year Surrender Period 0 - 80 years 3.500% 0.250% Month 109
81 - 85 years 1.750% 0.250% Month 109
86 - 90 years 0.880% 0.250% Month 109
Fixed Annuity - All Carriers / All Products - 10 Year Surrender Period 0 - 80 years 3.750% 0.250% Month 121
81 - 85 years 1.875% 0.250% Month 121
86 - 90 years 0.950% 0.250% Month 121
Variable Annuity B Share - All Carriers / All Products - Commission Option 1 0 - 80 years 5.800% 0.250% Month 1
81 - 85 years 3.300% 0.250% Month 1
86 - 90 years [additions only] 1.800% 0.250% Month 1
Variable Annuity B Share - All Carriers / All Products - Commission Option 2 0 - 80 years 2.500% 1.000% Month 16
81 - 85 years 1.250% 1.000% Month 16
86 - 90 years [additions only] 0.500% 1.000% Month 16
Variable Annuity B Share - All Carriers / All Products - Commission Option 3 0 - 80 years 4.500% 0.500% Month 1
81 - 85 years 2.500% 0.500% Month 1
86 - 90 years [additions only] 1.500% 0.500% Month 1
Variable Annuity 4 Year Liquidity - All Carriers / All Products – Commission Option 1 0 - 80 years 5.800% 0.250% Month 1
81 - 85 years 3.300% 0.250% Month 1
86 - 90 years [additions only] 1.800% 0.250% Month 1
Variable Annuity 4 Year Liquidity - All Carriers / All Products – Commission Option 2 0 - 80 years 2.500% 1.000% Month 16
81 - 85 years 1.250% 1.000% Month 16
86 - 90 years [additions only] 0.500% 1.000% Month 16
Variable Annuity 4 Year Liquidity - All Carriers / All Products – Commission Option 3 0 - 80 years 4.500% 0.500% Month 1
81 - 85 years 2.500% 0.500% Month 1
86 - 90 years [additions only] 1.500% 0.500% Month 1
Variable Annuity Investment Only - All Carriers / All Products - Commission Option 1 0 – 75 years 4.800% 0.250%

0.500%
Months 13-60

Months 61+
Variable Annuity Investment Only - All Carriers / All Products - Commission Option 2 0 – 75 years 4.050% 0.250%

1.000%
Months 13-60

Months 61+
Variable Annuity Investment Only - All Carriers / All Products - Commission Option 3 0 – 75 years 1.700% 1.000% Month 16
Variable Annuity Investment Only - All Carriers / All Products - Liquidity Option 0 – 75 years 1.500% 1.000% Month 13
Variable Annuity Prudential Defined Income 0 – 80 years 3.700% 0.250% Month 1
81 - 85 years 1.850% 0.250% Month 1
Variable Annuity Market Linked / Buffered Solutions - All Carriers - 3 year CDSC 0 – 75 years 3.000% 1.000% After CDSC
Variable Annuity Market Linked / Buffered Solutions - All Carriers - 5 year CDSC 0 – 75 years 5.000% 0.000% N/A
Variable Annuity Market Linked / Buffered Solutions - All Carriers - 6 year CDSC 0 – 75 years 6.000% 0.000% N/A
Index Annuity - All Carriers / All Products - 5 Year Duration Commission Option 1 0 - 80 years 3.500% 0.000% N/A
81 - 85 years 2.000% 0.000% N/A
86+ years 0.000% 0.000% N/A
Index Annuity - All Carriers / All Products - 6 Year Duration Commission Option 1 0 - 80 years 4.000% 0.000% N/A
81 - 85 years 2.250% 0.000% N/A
86+ years 0.000% 0.000% N/A
Index Annuity - All Carriers / All Products - 7 Year Duration Commission Option 1 0 - 80 years 4.500% 0.000% N/A
81 - 85 years 2.500% 0.000% N/A
86+ years 0.000% 0.000% N/A
Index Annuity - All Carriers / All Products - 8 Year Duration Commission Option 1 0 - 80 years 5.000% 0.000% N/A
81 - 85 years 2.750% 0.000% N/A
86+ years 0.000% 0.000% N/A
Index Annuity - All Carriers / All Products - 9 Year Duration Commission Option 1 0 - 80 years 5.500% 0.000% N/A
81 - 85 years 2.800% 0.000% N/A
86+ years 0.000% 0.000% N/A
Index Annuity - All Carriers / All Products - 10 Year Duration Commission Option 1 0 - 80 years 6.000% 0.000% N/A
81 - 85 years 2.875% 0.000% N/A
86+ years 0.000% 0.000% N/A
Index Annuity - All Carriers / All Products - 5 Year Duration Commission Option 2 0 - 80 years 1.750% 0.250% Month 13
81 - 85 years 1.150% 0.250% Month 13
86+ years 0.000% 0.250% Month 13
Index Annuity - All Carriers / All Products - 6 Year Duration Commission Option 2 0 - 80 years 2.000% 0.250% Month 13
81 - 85 years 1.200% 0.250% Month 13
86+ years 0.000% 0.250% Month 13
Index Annuity - All Carriers / All Products - 7 Year Duration Commission Option 2 0 - 80 years 2.500% 0.250% Month 13
81 - 85 years 1.250% 0.250% Month 13
86+ years 0.000% 0.250% Month 13
Index Annuity - All Carriers / All Products - 8 Year Duration Commission Option 2 0 - 80 years 3.000% 0.250% Month 13
81 - 85 years 1.300% 0.250% Month 13
86+ years 0.000% 0.250% Month 13
Index Annuity - All Carriers / All Products - 9 Year Duration Commission Option 2 0 - 80 years 3.100% 0.250% Month 13
81 - 85 years 1.400% 0.250% Month 13
86+ years 0.000% 0.250% Month 13
Index Annuity - All Carriers / All Products - 10 Year Duration Commission Option 2 0 - 80 years 3.250% 0.250% Month 13
81 - 85 years 1.500% 0.250% Month 13
86+ years 0.000% 0.250% Month 13
Index Annuity - All Carriers / All Products - 7 Year Duration Commission Option 3 0 - 80 years 1.200% 1.000% Month 13
81 - 85 years 0.700% 1.000% Month 13
Index Annuity - All Carriers / All Products - 8 Year Duration Commission Option 3 0 - 80 years 1.250% 1.000% Month 13
81 - 85 years 0.750% 1.000% Month 13
Index Annuity - All Carriers / All Products - 9 Year Duration Commission Option 3 0 - 80 years 1.300% 1.000% Month 13
81 - 85 years 0.800% 1.000% Month 13
Index Annuity - All Carriers / All Products - 10 Year Duration Commission Option 3 0 - 80 years 1.350% 1.000% Month 13
81 - 85 years 0.850% 1.000% Month 13
Single Premium Immediate Annuity (SPIA) - All Carriers All 4.000% 0.000% N/A
Deferred Income Annuity (DIA) - All Carriers All 5.000% 0.000% N/A

 

Underlying subaccount fees and expenses

Fees and expenses charged on subaccounts; include management fees paid to investment adviser responsible for making investment decisions; expenses include cost of buying and selling securities and administering trades, and marketing of the fund. These asset-based expenses will vary by subaccount (e.g. investment type) and typically range from 0.28% to 3.26% annually. This fee may vary by year of purchase. [Depending on the insurer, there may also be a Fund Facilitation Fee - this is not a fund expense but a contract level fee that is applied daily to assets invested in certain sub-accounts. This fee is dynamic up to a maximum amount as required by the Insurance company in the range of 0.10% to 1.00%]. Review the prospectus for specific details.

Auction Rate Securities

Auction Rate Securities ("ARS") are municipal bonds, corporate bonds, interests in trusts or other special purpose vehicles (“SPVs”) or preferred stocks, in each case with interest rates or dividend yields that are periodically re-set through auctions, typically every 7, 14, 28, or 35 days.

Remarketing Fee

In relation to an investment in ARS, pursuant to our agreements with ARS issuers, there is a remarketing fee paid by the issuer to Morgan Stanley Smith Barney LLC and its affiliates (“Morgan Stanley”) ranging from 0 basis points to 25 basis points. These amounts are paid to Morgan Stanley for its on-going role as a participating broker dealer in the relevant ARS program. More specifically, the fee is paid for our role in facilitating any customer auction orders (i.e., passing through the orders for inclusion in an auction) and implementing the results of the auction (e.g., a new re-set rate, failed auction rate, or transfer of the ARS). Prior to investment, please contact your Financial Advisor or Private Wealth Advisor for the information related to the specific ARS.

Bank Deposit Program (BDP)

Bank Deposit Program Disclosure Statement

Account-based Flat Fee

The Bank Deposit Program (""BDP"") automatically deposits client cash into bank deposit accounts established for the client by and in the name of Morgan Stanley Smith Barney LLC (""Morgan Stanley"") at Morgan Stanley Bank, N.A. (""MSBNA"") and/or Morgan Stanley Private Bank, National Association (""MSPBNA"") (collectively the ""MS Banks"") up to a total deposit of $2,000,000 across both MS Banks. Once the deposited funds reach $2,000,000, any additional funds will be swept into the applicable money market mutual fund (""Sweep Fund""). The MS Banks are national banks, affiliates of Morgan Stanley and members of the Federal Deposit Insurance Corporation (""FDIC""). A client may hold deposits at the MS Banks through the BDP and those deposits are eligible for FDIC insurance of up to $250,000 per client per bank, in each insurable capacity. The MS Banks currently pay Morgan Stanley an annual account-based flat fee of $53 per account. The amount of the fee received by Morgan Stanley may affect the interest rate paid by the Sweep Banks on a client's deposit accounts. Morgan Stanley's compensation from the MS Banks represents reimbursement for administrative costs, including recordkeeping and account maintenance.

Financial Advisors receive no commissions on Brokerage BDP balances. The asset – based fee charged within Advisory accounts applies to BDP balances.

Revenue Sharing with MSIM

Our affiliate, Morgan Stanley Investment Management ("MSIM"), serves as the investment advisor to the Sweep Fund. Morgan Stanley receives revenue-sharing compensation from MSIM based on the amount of Sweep Fund assets held by clients in brokerage accounts of up to 0.25% per year ($25 per $10,000 of assets).

Account Servicing Fee Paid by the MS Banks

Total revenue is equal to the annual per account servicing fee times the number of brokerage accounts. From January 1, 2016 to June 30, 2016 the annual per account servicing fee was $50. From July 1, 2016 to December 31, 2016 the annual per account servicing fee was $58. The fee is currently $53. The revenue is then allocated to the individual banks based on the proportional number of bank subaccounts. Morgan Stanley does not receive any compensation from the MS Banks for BDP deposits held by retirement advisory accounts.

 

Choice Select

Sliding scale commission is charged monthly in arrears, based on the PV (value of the position traded in the month). The more PV trades throughout the Choice Select year, the lower the commission rate charged for transactions.

Morgan Stanley Choice SelectSM Annual Commission Schedule

Principal Volume Tier Marginal Rate
$0-$249,999.99 2.50%
$250,000.00-$499,999.99 2.00%
$500,000.00-$999,999.99 1.50%
$1,000,000.00-$2,499,999.99 1.00%
$2,500,000.00-$9,999,999.99 0.75%
$10,000,000.00 + 0.50%

 

*If no Morgan Stanley Choice SelectSM eligible equity or option trades are placed during the month, then no Morgan Stanley Choice SelectSM commissions are charged for that month.

Closed-End Funds (CEFs) – Primary

Management & Underwriting Fee

Management and Underwriting Fee(s) are determined as a percentage of total sales by Morgan Stanley of a particular closed end fund. This is Morgan Stanley & Co. revenue and is not shared with Morgan Stanley (generally 0.5%)

Structuring Fee

Structuring Fee is a fee paid to Morgan Stanley from Morgan Stanley & Co. for Morgan Stanley's assistance in the marketing and structuring of new closed end funds.

Structuring Fee(s) are determined as a percentage of the total sales of a particular closed end fund by Morgan Stanley Financial Advisors and Private Wealth Advisors. Pursuant to an intercompany agreement, Morgan Stanley & Co. generally pays Morgan Stanley 75% of the Structuring Fee that it receives for Morgan Stanley providing assistance and consulting on the marketing and structuring of new closed end fund IPOs (generally between 0.5% and 1.35%).

Syndication Fee

Syndicate Selling Fee is a percentage paid to Morgan Stanley from Morgan Stanley & Co. for Morgan Stanley's assistance in the underwriting of new closed end fund IPOs.

Syndicate Selling Fee(s) are determined as a percentage of total sales by the selling syndicate of a particular closed end fund (excluding sales by Morgan Stanley Financial Advisors and Private Wealth Advisors). Pursuant to an intercompany agreement, Morgan Stanley & Co. generally pays Morgan Stanley 25% of the Syndicate Selling Fee that it receives for Morgan Stanley providing assistance to Morgan Stanley & Co. on new closed end fund IPOs where Morgan Stanley & Co. is a lead underwriter (generally between 0.5% and 0.75%).

Closed-End Funds (CEFs) – Secondary

Securities Processing Fee(s)

Transaction processing fee charged by Morgan Stanley applied to certain executed orders (e.g. equities, fixed-income, transactional futures, UITs, closed end funds, mutual funds and precious metals) and applies to all account types (excluding advisory accounts, 529 Plans and Choice Select). The fee is charged only once per security, per day, for trades done on the same side of the market (e.g., multiple buy trades, or multiple sell trades of the same security, on the same day, the charge will only be added to one of the trades). $6 is charged per E-delivery per transaction, $6.50 is charged per paper per transaction.

Supplemental Transaction Fee

Additional fee charged by MS on all exchange traded products for the cost of processing trade transactions. This fee is 0.002310% of the principal value of the trade, rounded up to the next penny. For a $1 million principal trade this fee would be $23.10.

Trading Commission

Commission charged by Morgan Stanley with respect to closed end funds trades when Morgan Stanley serves as a broker for its client accounts with respect to such transactions.

The maximum commission amount charged to clients for closed end fund trades is a percentage of Principal Value (PV) ranging from 0.50% to 2.50%, depending on the Principal Value of the trade. The commission for a given closed end fund trade is determined on a marginal basis, meaning clients will be charged progressively lower percentage rates at higher Principal Value amounts. Therefore, the higher the Principal Value of the trade, the lower the effective percentage rate that will be applied.

Gross Expense Ratio

Annual fee charged by funds to their shareholders. It expresses the percentage of assets deducted each fiscal year for fund expenses including management fees, administrative fees, operating costs, and all other asset-based costs incurred by the fund. The expense ratio is deducted from the fund's average net assets and is generally accrued on a daily basis.

The Gross Expense Ratio does not take into account any fee waivers or expense reimbursements that may apply to the fund.

Refer to the prospectus for additional details.

Net Expense Ratio

Annual fee charged by funds to their shareholders, net of fee waivers and expense reimbursements. It expresses the percentage of assets deducted each fiscal year for fund expenses including management fees, administrative fees, operating costs, and all other asset-based costs incurred by the fund. The expense ratio is deducted from the fund's average net assets and is generally accrued on a daily basis.

Refer to the prospectus for additional details.

Equities and Fixed Income – Primary

The following information relates to new issue syndicated offerings where Morgan Stanley or its affiliates are acting as underwriter, placement agent or distributor.

For new issue syndicated offerings, clients pay the offering price agreed to or set by the issuer, which is stated in the offering document. Morgan Stanley and its Financial Advisors receive a fee for new issue syndicated offerings, typically called a selling concession or discount, from the underwriter(s) who bring the security to market. This fee is a percentage of the underwriter’s commissions and fees, which are included in the initial offering price paid by the client and stated in the offering document.

Selling concessions range in amount by product and are typically subject to a maximum percentage of the new issue price. For example, for new issue equity syndicated offerings, the selling concession can be up to 4.5% for equity IPOs, while the maximum for other offerings and products is typically less than this.

For new issue CDs (other than structured CDs), Morgan Stanley will receive a portion of the placement fee that the underwriter receives from the issuer. This fee is described but not stated in the disclosure statement for the CD. The placement fee is built into the initial offering price paid by the client, and can be up to 2% of the CD face value amount, but is typically much less.

Certain new issue syndicated offerings may be variable price offerings, meaning that they are offered from time to time in one or more negotiated transactions at varying prices to be determined at the time of each sale.

For registered equity block transactions, the underwriters will pay a non-variable sales credit to Morgan Stanley and its Advisors.

When clients participate in a new issue offering through Morgan Stanley where Morgan Stanley is not a distributor but one of our affiliates is acting as underwriter or placement agent, Morgan Stanley may receive a referral fee.

When Morgan Stanley facilitates a client purchase of a new issue security where Morgan Stanley and its affiliates are not acting as underwriter, placement agent or distributor, Morgan Stanley may or may not receive a fee from the third party underwriter, placement agent or distributor (which is a portion of the fee paid to the third party as disclosed in the applicable offering document) and/or add sales credit to the purchase price.

For more information, please refer to the offering document for a particular security.

Equities and Fixed Income – Secondary

Equities - Secondary

Equity Middle Markets

The Equity Middle Markets business serves certain qualifying institutional accounts at Morgan Stanley Smith Barney and facilitates trading on Morgan Stanley & Company’s (MSCO) trading platforms. Commission is charged by Morgan Stanley Wealth Management (MSWM), and MSCO with respect to such equity trades (other than some preferred stock trades) when MSWM and MSCO serves as a broker for its client.

Foreign Ordinary Share Fee

Fee charged by Morgan Stanley on equity trades with principal values lower than $15,000. $50 fee for purchases with less than $15,000 principal value, no charge for purchases greater than $15,000 principal value. Fee is only charged on transactions involving foreign equities.

Odd Lot Issuer Fee

Fee charged by Third Party (Stock Issuer) that could be assessed whenever there is an odd lot tender offer executed for buy or sell. A tender odd-lot is a type of voluntary equity offering by the issuer for holders that hold 99 or less shares. Odd lot offers have two options: 1) buy shares to round up to a round lot (100 or more) from the issuer 2) sell the odd lot holdings back to the issuer. This fee is not always assessed and varies by Issuer.

Odd Lot Processing Fee

Fee charged by Morgan Stanley that could be assessed to process an odd lot tender offer executed for equity buy or sell. $25 per/transaction.

Processing Fee

Transaction processing fee charged by Morgan Stanley applied to certain executed orders (e.g. equities, fixed-income, transactional futures, UITs, mutual funds and precious metals) and applies to all account types (excluding advisory accounts, 529 Plans and Choice Select). The fee is charged only once per security, per day, for trades done on the same side of the market (multiple buy trades, or multiple sell trades of the same security, on the same day, the charge will only be added to one of the trades. $6 is charged per E-delivery per transaction, $6.50 is charged per paper per transaction. This fee does not apply to Middle Markets virtual branch clients.

Stamp Duty (Foreign Transaction Tax)

Fee charged by France and Italy on both buy and sell equity transactions for equities issued by French or Italian companies. The following formula is used to calculate the maximum fee amount:

French Maximum Fee Amount = PV* 0.3%
Italian Maximum Fee Amount = PV * 0.2%

State Tax

Fee charged by Morgan Stanley on both buy and sell equity transactions for clients from Hawaii and New Mexico.

For equity trades for clients from Hawaii, the following formula is used to calculate the fee amount:

Maximum Fee Amount = commission * 2.4%

For equity trades for clients from New Mexico, the following formula is used to calculate the fee amount:

Maximum Fee Amount = commission * 3.9%.

Stock Certificate Collection Fee

Fee charged by Morgan Stanley for the collection of physical certificates. $25 per/transaction.

Supplemental Transaction Fee

Additional fee charged by MS on all exchange traded products for the cost of processing trade transactions. This fee is 0.002310% of the principal value of the trade, rounded up to the next penny. For a $1 million principal trade this fee would be $23.10.

Trading Commission

Commission charged by Morgan Stanley with respect to equity trades other than some preferred stock when Morgan Stanley serves as a broker for its client accounts with respect to such transactions.

Effective May 1, 2017 the maximum equity commission amount charged to clients for equity trades is a percentage of Principal Value (PV) ranging from 0.50% to 2.50%, depending on the Principal Value of the trade. The commission for a given equity trade is determined on a marginal basis, meaning clients will be charged progressively lower percentage rates at higher Principal Value amounts. Therefore, the higher the Principal Value of the equity trade, the lower the effective percentage rate that will be applied.

Voluntary Reorganization Fee

Fee charged by Morgan Stanley for when a stock splits and results in a delivery of new shares and/or payout. $25 per/transaction.

Fixed Income-Secondary

When clients purchase or sell a fixed income security in the secondary market in their brokerage accounts, the Firm generally acts as principal or riskless principal in that transaction and clients pay a markup when purchasing the security or a markdown when selling the security. The mark up or markdown includes a sales credit charged by your Financial Advisors as well as ay trading spread charged by the Firm’s traders.

Fixed Income Middle Markets

In the Fixed Income Middle Markets business (which serves certain qualifying institutional accounts in Morgan Stanley Smith Barney and facilitates trading on Morgan Stanley & Company (MSCO), Morgan Stanley is acting as principal or riskless principal. MSCO and Morgan Stanley Wealth Management (MSWM) earn a trading spread charged by the Firm’s traders, which is included in the price clients pay on securities/products. Securities/products traded by MSWM may also have a reasonable sales credit added to the price of the securities/products.

Sales Credit

The sales credit charged by Morgan Stanley with respect to fixed income trades when Morgan Stanley serves as a broker for its client accounts with respect to such transactions.

The maximum sales credit charged is calculated using the formula:

Base Price x Sales Credit Rate = Maximum Sales Credit

The sales credit rate is a percentage derived from the sales credit schedule applicable to the product being traded. The sales credit schedule includes the maximum sales credit rate based on a product's complexity, risk and duration.

The base price is the price charged by the trader which includes the trader spread.

Tier 0: Treasuries, Agencies

  • Buy Pricing on a tiered scale between 0.125% and 1.125% as a percentage of base price
  • Sell Pricing on a tiered scale between 0.125% and 0.50% as a percentage of base price

Tier 1: Investment Grade Corporates, Traditional Municipals, and Certificates of Deposit

  • Buy Pricing on a tiered scale between 0.25% and 2.00% as a percentage of base price
  • Sell Pricing on a tiered scale between 0.125% and 0.50% as a percentage of base price

Tier 2: Investment Grade Non-Dollar Denominated Bonds, Investment Grade Convertibles, Investment Grade Step-ups, and Agency-issued Mortgage Backed Securities Pass-throughs

  • Buy Pricing on a tiered scale between 0.375% and 2.00% as a percentage of base price
  • Sell Pricing on a tiered scale between 0.125% and 0.50% as a percentage of base price

Tier 3: Non-Traditional Municipals, Non-Investment Grade Corporates, MBS CMOs (Collateralized Mortgage Obligations), Private Label MBS / ABS, Reverse Convertibles, Hybrids (Trust Preferreds), Structured Products, Non-Investment Grade Convertibles, Non-Investment Grade Non-Dollar Denominated Bonds, Non-Investment Grade Step-ups and $10 Par Structured Notes

  • Buy Pricing on a tiered scale between 0.75% and 2.00% as a percentage of base price
  • Sell Pricing on a tiered scale between 0.125% and 0.50% as a percentage of base price

Tier 4: Emerging Market Fixed Income

  • Buy Pricing on a tiered scale between 0.50% and 1.50% as a percentage of base price
  • Sell Pricing on a tiered scale between 0.125% and 1.00% as a percentage of base price

A discount is applied for larger trades. The discount is applied to all buy side transactions. The discount varies by the principal value of the trade.

The maximum sales credit for all trades is capped at $100,000.

Processing Fee

Transaction processing fee charged by Morgan Stanley applied to certain executed orders (e.g. equities, fixed-income, transactional futures, UITs, mutual funds and precious metals) and applies to all account types (excluding advisory accounts, 529 Plans and Choice Select). The fee is charged only once per security, per day, for trades done on the same side of the market (multiple buy trades, or multiple sell trades of the same security, on the same day, the charge will only be added to one of the trades. $6 is charged per E-delivery per transaction, $6.50 is charged per paper per transaction. This fee does not apply to Middle Markets virtual branch clients.

Voluntary Reorganization Fee

Fee charged by Morgan Stanley in the event a company offers a voluntary event. Common types of voluntary events include tender offers or exchange offers (e.g., publicly traded company issues a tender offer to buy back its own outstanding securities). $25 per/transaction.

Trading Spread

When clients purchase or sell a fixed income security in the secondary market in their brokerage accounts, the Firm generally acts as principal or riskless principal in that transaction. When acting as principal, clients may be subject to a bid/offer spread. This spread is captured by the trading desk and is not compensation for the Financial Advisor.

Exchange-Traded Products (ETFs)

ETF Data Analytics Licensing Fees

Morgan Stanley offers sponsors of exchange-traded funds (“ETFs”) the opportunity to purchase data analytics for Morgan Stanley transactional activity in the sponsor’s ETFs on our platforms. ETF sponsors that purchase ETF data analytics pay a flat amount (the “Fee”) based on the number of ETFs that the sponsor has available for sale at Morgan Stanley. The Fee ranges from $50,000 for sponsors with five or fewer ETFs to a maximum of $550,000 for sponsors with more than one hundred ETFs. The Fee is generally paid by the ETF’s investment adviser, distributor or other affiliate from its own revenues, profits or retained earnings and not directly from, or as a charge applied against the ETF’s assets. However, these revenues, profits or retained earnings may be derived, in part, from fees earned for services provided to the ETF and paid from the ETF’s assets. Because ETF Sponsors pay Morgan Stanley the Fee for each of the Sponsor’s ETFs offered on our platform, the aggregate Fee is higher for ETF sponsors that have more ETFs approved for sale.

These facts present a conflict of interest for MSSB and our Financial Advisors to the extent it leads us to focus on ETFs offered by sponsors who pay higher aggregate fees. In order to mitigate these conflicts, Financial Advisors, Private Wealth Advisors and their Branch Managers do not receive additional compensation as a result of the Fee payable to Morgan Stanley.

Gross Expense Ratio

The total charge applied to fund assets for operating expenses and management fees, including administrative fees, and all other asset-based costs incurred by the fund, except brokerage costs. Fund expenses are reflected in the fund's NAV. Sales charges are not included in the expense ratio. The expense ratio for a fund of funds is the aggregate expense ratio defined as the sum of the wrap or sponsor fees plus the estimated weighted average of the underlying fund fees. The Gross Expense Ratio, referred to as the Annual Operating Expense, is the amount collected from fund assets annually, and is detailed in the fund's prospectus. The Gross Expense Ratio does not take into account any fee waivers or expense reimbursements that may apply to the fund.

Licensing Fee

ETF's often seek to replicate the performance of an underlying index – in a few rare cases Morgan Stanley can serve as the index provider – creating and maintaining the index.

ETF Sponsors may pay Morgan Stanley a licensing fee for allowing the Sponsor to use the index.

Wealth Management Disclosures – Licensing Fee

Net Expense Ratio

The total charge applied to fund assets, net of fee waivers and expense reimbursements, for operating expenses and management fees, administrative fees, and all other asset-based costs incurred by the fund, except brokerage costs. Fund expenses are reflected in the fund's NAV. Sales charges are not included in the expense ratio. The expense ratio for a fund of funds is the aggregate expense ratio defined as the sum of the wrap or sponsor fees plus the estimated weighted average of the underlying fund fees. The Net Expense Ratio is the amount collected from fund assets annually, and is detailed in the fund's prospectus.

Securities Processing Fee

Transaction processing fee charged by Morgan Stanley applied to certain executed orders (e.g. equities, fixed-income, transactional futures, UITs, mutual funds and precious metals) and applies to all account types (excluding advisory accounts, 529 Plans and Choice Select). The fee is charged only once per security, per day, for trades done on the same side of the market (multiple buy trades, or multiple sell trades of the same security, on the same day, the charge will only be added to one of the trades. $6 is charged per E-delivery per transaction, $6.50 is charged per paper per transaction.

Stamp Duty (Foreign Transaction Tax)

Fee charged by France and Italy on both buy and sell equity transactions for equities issued by French or Italian companies. Includes ETFs where the underlying equity in the ETF is issued by France or Italy. The following formula is used to calculate the maximum fee amount:

French Maximum Fee Amount = PV* 0.3%

Italian Maximum Fee Amount = PV * 0.2%

Supplemental Transaction Fee

Additional fee charged by MS for the cost of processing trade transactions which may be applied to the sale of securities other than bonds, debentures, other evidences of indebtedness, security futures products, and options on securities indexes.

Trading Commission

Commission charged by Morgan Stanley with respect to ETFs trades when Morgan Stanley serves as a broker for its client accounts with respect to such transactions. The Financial Advisor receives a portion of the trading commission.

Training and Education Reimbursement

Morgan Stanley provides fund families with opportunities to sponsor meetings and conferences, and grants them access to our branch offices and Financial Advisors for educational, marketing and other promotional efforts. Fund representatives may also work closely with our branch offices and Financial Advisors to develop business strategies and plan promotional events for clients, prospective clients and educational activities. Fund families or their affiliates make payments to Morgan Stanley in connection with these promotional efforts, in order to reimburse Morgan Stanley for expenses incurred for sales events and training programs as well as client seminars, conferences and meetings. Although fund families independently decide if and what they will spend on these activities, some fund families agree to make annual dollar amount expense reimbursement commitments of up to $550,000.

Foreign Exchange (FX) - Spot and Deliverable Forwards

Commission

Advisors can establish any mark-up for the trade as long as it meets all the terms of the commission grid including the 0.03% minimum and does not exceed the maximum of 1.5%.

Markup / Markdown

Our affiliate, Morgan Stanley & Co. LLC may charge a markup or markdown (trading spread) in addition to the FX Commission charged by your Financial Advisor.

Portion of Interest Earned Retaineds

For servicing your foreign exchange account, Morgan Stanley may deduct up to 25% of the interest paid on your foreign exchange position, by JP Morgan Chase or any other bank, with whom Morgan Stanley holds your foreign exchange position.

In the event that a bank holding deposits for Morgan Stanley on your behalf, charges Morgan Stanley a negative interest rate on your currency deposit, Morgan Stanley may debit your account for the amount of negative interest as charged by our depository bank holding your foreign exchange position.

Insurance

Meeting reimbursement fee/marketing distribution fee

For Insurance Companies that have products currently available for sale, Morgan Stanley may be given a lump sum by Insurance Companies typically in the range of $65,000 to $245,000 to offset expenses incurred by Morgan Stanley for internal sales events and training programs, as well as client seminars, conferences and meetings held in the normal course of business. Fee varies based on Insurance Participation in all events. Expenses are reimbursed and amount left over will be rolled to next year.

Upfront Commission

Commission paid to Morgan Stanley for sales-related activities in relation to each insurance investment. Commissions may vary based on the product selected, owner's age, and state.

Type Upfront Commission as a % of Target Premium
Permanent Life Insurance
28%-106%
Term Life Insurance
48%-106%
Disability Income Insurance
50%-100%
Long Term Care Insurance
28%-80%
Hybrid Life / Long Term Care
6.66%-7%

 

Renewal Commission

Commission paid to Morgan Stanley for sales-related activities in relation to renewed insurance investments. Commissions may vary based on the product selected, owner's age, and state.

Type Renewal Commission as a % of Renewal Premium
Permanent Life Insurance
2-19% of premium
Term Life Insurance
Up to 4% premium
Disability Income Insurance
2-5% of premium
Long Term Care Insurance
3.5-9% of premium
Hybrid Life / Long Term Care
Up to 7% of premium

 

Trail Commission

Commission paid to Morgan Stanley by Insurance Companies for providing ongoing customer support and services for in-force insurance contracts. They provide recurring compensation to Morgan Stanley. This commission amount may be paid in lieu of renewal commission on variable insurance policies only.

Type Trail Commission as a % of Accumulated Cash Value of a Policy
Permanent Life Insurance
Up to 0.85% of premium

Investment Advisory

Margin Interest Rate

Your interest rate is determined by the size of your Margin loan (or debit) in your Margin account on a daily basis. Interest is based on a Margin Base Lending Rate (BLR) plus or minus a percentage that varies based on your daily close of business net settled debit balance. The current rate is posted on our website at www.morganstanley.com/online .

If the total interest rate charged to you pursuant to the schedule below changes for any reason other than an increase to the BLR, we will give you at least 30 days’ advance written notice.

The current percentage that is added to the BLR is available here:

http://www.morganstanley.com/wealth-disclosures/pdf/Margin_Interest_Rate.pdf

Express CreditLine

An Express CreditLine (ECL), offered by Morgan Stanley, can help you unlock the value of your assets and gain quick and efficient access to funds by allowing you to borrow money against the value of qualifying securities in your brokerage account — with the securities in your brokerage account serving as collateral for the loan. ECL is a variable rate revolving line of credit tied to your brokerage account with no minimum draw or facility amount. Pricing is tiered and the interest is based on your outstanding balance. There are risks associated with using your assets as collateral in a securities-based loan, including possible maintenance calls on short notice. See below for details.

Interest Rates

Interest rate is based on an ECL Base Lending Rate (BLR) plus or minus a percentage, also known as a spread or margin, which is determined by the debit balance amount.

Access Funds via Brokerage Account

An ECL allows you to access funds via the checkbook and debit card tied to your brokerage account. You can also access funds from your ECL by logging into Morgan Stanley Online or working with your branch for other withdrawal options.

Your ECL can be used to purchase real estate, pay tax obligations and purchase luxury items, while avoiding the need to liquidate your securities. Loan proceeds can be used for any suitable purpose except to purchase trade or carry securities or repay debt that was used to purchase trade or carry securities and cannot be deposited into a Morgan Stanley or other brokerage account.

Revolving Line of Credit

ECL is a revolving line of credit with no minimum loan amount that allows you to borrow against eligible collateral, including restricted/control stocks and Morgan Stanley affiliate-issued securities, such as Morgan Stanley stocks.

Mutual Funds

Mutual Fund Features, Share Classes and Compensation

Revenue Sharing Fund Families

Administrative Service Fees

Morgan Stanley and/or its affiliates receive compensation from funds or their affiliated service providers for providing record keeping and related services to the funds. These charges are based on the aggregate value of client positions. We typically process transactions with domestic fund families on an omnibus basis, which means we consolidate our clients' trades into one daily trade with the fund, and therefore maintain all pertinent individual shareholder information for the fund. Trading in the manner requires that we maintain the transaction history necessary to track and process sales charges, annual service fees, and applicable redemption fees and deferred sales charges for each position, as well as other transaction details required for ongoing position maintenance purposes. Certain funds families are traded on a networked basis, which means Morgan Stanley submits a separate trade for each individual client to trade the fund. For these services, funds pay 0.06% per year ($6 per $10,000) on fund assets held by our clients in commission-based brokerage accounts and fee-based advisory account programs. However for advisory accounts there are account type and program exceptions, while the fees are rebated to offset an advisory account platform fee. Please see the applicable Morgan Stanley ADV brochure for additional information.

Contingent Deferred Sales Charge (CDSC)

Purchasers of certain mutual fund share classes may be required to pay a contingent deferred sales charge (CDSC) on shares sold during a specified time period.

Data Analytics Fees

Morgan Stanley also provides fund families with the opportunity to purchase supplemental sales data analytics. The fee amount depends on the level of data and the number of products covered. The current range is $250,000 per year for the most basic mutual fund data package up to $500,000 per year for the most comprehensive mutual fund sales data package. For an additional fee, fund families that sponsor products in addition to mutual funds (e.g., ETFs, UITs and SMAs) may purchase data analytics on other financial product sales at Morgan Stanley.

Gross Expense Ratio

The total annual expense ratio for a fund including management fee, other expenses and any amounts for distribution and shareholder services (Rule 12b-1 fees) before any reduction for management fee waivers or expense reimbursements to which the fund has agreed.

Net Expense Ratio

The total annual expense ratio for a fund including management fee, other expenses and any amounts for distribution and shareholder services (Rule 12b-1 fees) after any reduction for management fee waivers or expense reimbursements to which the fund has agreed.

Networking Fee

Morgan Stanley and/or its affiliates receive compensation from funds or their affiliated service providers for providing record keeping and related services to the funds. Certain funds families are traded on a networked basis, which means Morgan Stanley submits a separate trade for each individual client to trade the fund. For these services, funds pay 0.6% per year ($6 per $10,000) on fund assets held by our clients in commission based brokerage accounts.

Revenue Share

Morgan Stanley charges each fund family we offer a mutual fund support fee, also called revenue-sharing payment, on client account holdings in fund families based on a tiered rate which increases along with the management fee of the fund. This means that lower management fee funds pay lower rates than those with higher management fees. The rate ranges from 0.01% per year ($1 per $10,000 of assets) up to a maximum of 0.10% per year ($10 per $10,000 of assets). The tiered rates are the same for transactional brokerage and fee-based advisory client account holdings. However, for advisory accounts there are account type and program exceptions and the fees are rebated to offset an advisory account platform fee. Please see the applicable Morgan Stanley ADV brochure for additional information. Revenue-sharing payments are in addition to the sales charges, annual distribution and service fees (referred to as "12b-1 fees"), applicable redemption fees and deferred sales charges, and other fees and expenses disclosed in the fund's prospectus fee table. Revenue-sharing payments are generally paid out to the fund's investment adviser, distributor or other fund affiliates revenues or profits and not from the fund's assets. However, fund affiliate revenues or profits may in part, be derived from fees earned for services provided to and paid for by the fund. Morgan Stanley does not receive any portion of revenue-sharing payments through brokerage commissions generated by the fund.

Sales Charge

Fee charged by the mutual fund company associated with buying shares and deducted from the investment amount. These amounts are used, in part to pay selling compensation.

The fee varies by fund company, fund category or classification, share class purchased and the transaction amount/breakpoint at which the purchase qualifies.

Additionally, a portion of the fee charged is passed to Morgan Stanley by the Mutual Fund and retained as Trading Commission.

Securities Processing Fee(s)

Transaction processing fee applied to certain executed orders (e.g. equities, fixed-income, transactional futures, UITs, mutual funds and precious metals) and applies to all account types (excluding advisory accounts, 529 Plans and Choice Select). The fee is charged only once per security, per day, for trades done on the same side of the market (multiple buy trades, or multiple sell trades of the same security, on the same day, the charge will only be added to one of the trades). However, if the client buys and sells the security on the same day, the fee would be charged once on the buy side and once on the sell side. $6 is charged per E-delivery per transaction, $6.50 is charged per paper per transaction.

Short Term Redemption Fee

A fee may be charged upon selling mutual fund shares before the minimum holding period stated in the prospectus, usually between 30 days to one year, though it can be in place for longer periods

Training and Education Reimbursement

Morgan Stanley provides fund families with opportunities to sponsor meetings and conferences, and grants them access to our branch offices and Financial Advisors for educational, marketing and other promotional efforts. Fund representatives may also work closely with our branch offices and Financial Advisors to develop business strategies and plan promotional events for clients, prospective clients and educational activities. Fund families or their affiliates make payments to Morgan Stanley in connection with these promotional efforts, in order to reimburse Morgan Stanley for expenses incurred for sales events and training programs as well as client seminars, conferences and meetings. Although fund families independently decide if and what they will spend on these activities, some fund families agree to make annual dollar amount expense reimbursement commitments of up to $550,000.

Money Market Fund Liquidity Fee

Contingent fee charged by the fund at the time of sale based on the liquidity of the fund. Only applicable at redemption.

Options

Maximum Option Commission Rates

For all Option trades, the grid commission is calculated as the sum of three parts: (1) a percentage rate applied to the Principal Value (PV) of the Option trade, which decreases as the PV goes up; (2) a flat fee per trade depending on the PV; and (3) a per contract charge depending on the number of contracts traded.

The grid commission calculated above is then subject to the following maximum rules:

                    I.            For trades with a grid commission less than or equal to $125.00, the overarching maximum commission is the lesser of (1) 16% of PV or (2) $84.00 per contract

                  II.            For trades with a grid commission above $125.00, the overarching maximum commission is the lesser of (1) 16% of PV, (2) $84.00 per contract or (3) the greater of $125.00 or 5% of PV

Precious Metals

Precious Metals Storage and Delivery Fee Schedule

Sales Credit

The sales credit charged by Morgan Stanley with respect to trades when Morgan Stanley serves as a broker for its client accounts with respect to such transactions.

The maximum sales credit charged is calculated using the formula:

Base Price x Sales Credit Rate = Maximum Sales Credit

The sales credit rate is a percentage derived from the sales credit schedule applicable to the product being traded. The sales credit schedule includes the maximum sales credit rate based on a product's complexity, risk and duration.

The base price is the price charged by the trader which includes the trader spread.

For Precious Metals the Sales Credit Rate is:

·         Buy Pricing on a tiered scale up to 2.00% as a percentage of base price

·         Sell Pricing on a tiered scale up to 2.00% as a percentage of base price

Physical Trading of Unallocated Holdings

Morgan Stanley Wealth Management may buy and sell for its own account the physical precious metals that back “unallocated” holdings and may profit by such use in addition to the mark-ups or commissions it charges on purchases and sales.

Service Fee

Customers buying precious metals through Morgan Stanley Wealth Management or delivering precious metals into their Morgan Stanley Wealth Management accounts for storage or otherwise will be charged a service fee. Service fees are subject to change without notice.

Delivery Charge

For insured mail delivery of small orders (less than $100,000 in total value) to the residence on file see table below.

Type Precious Metal Size(s)/Increments Minimum Purchase Delivery Charge Notes
Bar Gold 1 and 10 oz. $5,000 $100 per 20oz.,
$3.50 per oz.
thereafter
N/A
1 kilo (32.15 oz.) $100 per bar N/A
100/400 oz. $300 per bar N/A
Silver 1 and 10 oz. $50 per 100 oz.,
$0.25 per oz.
thereafter
N/A
100 oz. $75 for the first 2, $15
each thereafter
N/A
1,000 oz. $150 per bar N/A
Platinum All $100 per 20 oz.,
$3.50 per oz.
thereafter
N/A
Palladium 1 and 100 oz. $100 per 20 oz.,
$3.50 per oz.
thereafter
N/A
100 oz. $300 per bar N/A
Coin Gold All First 20 oz* $100
$3.50 per oz.
thereafter
Available Coins

American Gold Eagle;
American Gold Buffalo

Canadian Gold Maple Leaf

South African Gold Krugerrand (1oz. only)

Australian Gold Kangaroo;
Australian Gold Nugget

Austrian Philharmonic
Silver All $125 for first 300 coins,
$0.25 per coin thereafter
Available Coins

American Silver Eagle

Canadian Silver Maple Leaf
Silver Bags All $125 per bag Available Bags

90% Silver Coin bags (715oz.)

40% Silver Coin bags (295oz.)
Platinum All First 20 oz* $100
$3.50 per oz.
thereafter
Available Coins

American Gold Eagle

Canadian Gold Maple Leaf

Australian Koala;

Isle of Man Noble
Palladium All First 20 oz* $100
$3.50 per oz.
thereafter
Available Coins

Canadian Gold Maple Leaf

If you take physical possession of precious metals, you will be charged applicable sales tax.

For large orders, you are advised to use a provider with specialized experience transporting precious metals, and have delivery made to a secure storage facility.

Fees for delivery of large orders, or to locations other than the residence on file, will vary according to quantity, value, metal type and destination. Contact your Financial Advisor for more information.

Storage Charge

Client Holdings Storage Charge Rate
Minimum ($ Million) Maximum ($ Million)
(non-inclusive)
Allocated (Basis Points)
(Bars & Coins)
Un-allocated (Basis Points)
(Bullion and Loco London)
- 1 60 36
1 5 45 20
5 - 30 20

Inspection Fee

A $25 inspection fee will be charged for any metal that is shipped to our storage facility.

Preferreds

Sales Credit

The sales credit charged by Morgan Stanley with respect to trades when Morgan Stanley serves as a broker for its client accounts with respect to such transactions.

The maximum sales credit charged is calculated using the formula:

Base Price x Sales Credit Rate = Maximum Sales Credit

The sales credit rate is a percentage derived from the sales credit schedule applicable to the product being traded. The sales credit schedule includes the maximum sales credit rate based on a product's complexity, risk and duration.

The base price is the price charged by the trader which includes the trader spread.

$25 Par Debt Preferred (Baby Bonds)

·         Buy pricing on a tiered scale between 0.25% and 2.00% as a percentage of base price

·         Sell pricing on a tiered scale between 0.125% and 0.50% as a percentage of base price

Foreign Denominated Stock Preferreds

·         Buy pricing 2.25% as a percentage of base price

·         Sell pricing 1.75% as a percentage of base price

Convertibles

·         Buy pricing 2.25% as a percentage of base price

·         Sell pricing 1.75% as a percentage of base price

Stock/Trust/Hybrid

·         Buy pricing 2.25% as a percentage of base price

·         Sell pricing 1.75% as a percentage of base price

Structured Preferreds

·         Buy pricing on a tiered scale between 0.75% and 2.00% as a percentage of base price

·         Sell pricing on a tiered scale between 0.125% and 0.50% as a percentage of base price

$1,000 Par Preferreds

Refer to fixed income section for fee information.

If the firm trades as principal, a desk spread may be charged. Refer to fixed income section for more information.

A discount is applied for larger trades. The discount is applied to all buy side transactions. It is applied to sell side transactions in Convertible, Stock, Trust, and Hybrid Preferreds. The discount varies by the principal value of the trade.

The maximum sales credit for all trades is capped at $100,000.

Structured Investments

Structured Investments - Primary

For new issue structured investments (including structured notes and CDs), the offering price includes costs and fees associated with issuing, selling, structuring and hedging the security, including a fee to Morgan Stanley and its Financial Advisors for distributing the new issue (typically called a selling concession). 

The selling concession is a percentage of the underwriters’ commissions and fees and includes a fixed sales commission as well as a structuring fee, which are described further below. 

The offering price and a description of the costs and fees associated with a security can be found in the offering documents. 

Issuing and Hedging Cost

The offering price of a new issue structured investment includes the costs of issuance and the costs of carrying out hedging activities related to the structured investments by one or more of our subsidiaries and/or third-party underwriters. See the offering documents for more information.

Licensing and Index Fees

For structured investments linked to the performance of an index, fees generally include licensing fees for use of the index, which may be paid to Morgan Stanley or its affiliates for indexes owned or sponsored by them. See the prospectus for more information.

Additionally, certain structured investments are linked to proprietary indexes that may contain embedded servicing and rebalancing costs. See the offering documents for more information.

Sales Commission

Morgan Stanley receives a sales commission when it distributes new issue structured investments. Sales commissions range from 0.75%-3.0% based upon the structured investment’s tenor, structure, underlying asset and other factors.

Structuring Fees

Morgan Stanley receives a structuring fee for its role in the structuring of the structured investment.

The structuring fee is up to 0.5% of the transaction amount.

Note: While the amounts of the sales commission and structuring fee are typically separately disclosed on the cover of the offering documents, this is not the case for Interest Rate Linked structured investments, where only the total combined sales commission/structuring fee is disclosed.

Variable Price Offerings

Certain new issue structured investments offerings may be variable price offerings, meaning that they are offered from time to time in one or more negotiated transactions at varying prices to be determined at the time of each sale. For structured investments variable price offerings, the underwriters will pay varying discounts and commissions to Morgan Stanley and its financial advisors depending upon the transaction, and the maximum discount or commission that can be paid will be stated in the offering document.

Structured Investments – Secondary

When clients purchase or sell a Structured Investment in the secondary market in their brokerage accounts, Morgan Stanley generally acts as principal or riskless principal in that transaction and clients pay a markup when purchasing the security or a markdown when selling the security. The markup or markdown includes a sales credit charged by your Advisor as well as any trading spread charged by the Morgan Stanley traders.

Please see the Equities and Fixed Income – Secondary – Fixed Income – Sales Credit section, which includes Structured Investments (Tier 3).

Our affiliate, Morgan Stanley & Co. LLC may charge a markup or markdown (trading spread) in addition to the Commission charged by your Advisor.

Processing Fee

Fees applies to certain executed orders for all account types. The fee is charged only once per security, per day, for trades done on the same side of the market. However, if the client buys and sells the security on the same day, the fee would be charged once on the buy side and once on the sell side. $6 per E-delivery per transaction, $6.50 per paper per transaction is charged as processing fees.

Transactional Futures

Commission

Fee charged at the Financial Advisor's discretion. A maximum of $45 per lot per side (buy/sell) may be charged.

Execution Fee

Execution Costs vary by point of execution:

  • RJ O’Brien - $0.75 per contract
  • Trading Technologies - $0.30 per contract
  • Bloomberg Tradebook - $0.30 per contract
  • Execution fees for trades done with floor brokers range between $0.75 to $6.00 per contract. This fee is based on the contract agreement between Morgan Stanley and the broker 

This charge is debited to the account at the time of execution.

Clearing Fee

The Futures Clearing Fee for trades with Morgan Stanley through Morgan Stanley & Co. LLC is $0.20 per contract.

Storage Fee

After Morgan Stanley executes a Futures trade relating to precious metals, storage may be necessary for these commodities. Futures Storage Fees are fixed dollar amounts issued by the depository for exchange traded products. The Futures Storage Fees are charged monthly and paid to the depositories monthly.

Refer to the fee schedule below for the rates associated with the specific precious metals and possible corresponding depositories.

Depository Gold Silver Platinum Palladium
HSBC $15.00 $8.50 (per bar) $20.00 $20.00
Scott Moncotta $15.00 $8.50 (per bar) $20.00 $20.00
Brinks $12.00 $30.00 $15.00 $15.00
Delaware N/A $8.50 (per bar) $20.00 $20.00
Manfra, Tordella, & Brookes, Inc $15.00 $8.50 (per bar) $15.00 $15.00
JP Morgan Chase Bank NA $15.00 $8.50 (per bar) $20.00 $20.00

 

Processing Fee

The processing fee for Futures Investments done on a third-party (ION) platform is $5.25 per transaction.

National Futures Association Clearing Fee

The National Futures Association (NFA), a self-regulatory agency for the futures industry, fee is a fixed dollar amount of .02 cents charged by the NFA on Future trades per contract that supports the NFA's regulatory efforts. This charge is debited to the account at the time of execution.

Delivery Fee

The Futures Delivery Fee for unwanted deliveries is $50 per contract, capped at $300 total.

Unit Investment Trusts (UITs)

Unit Investment Trusts - Features, Costs and Compensation

Dealer Concession

Nonaffiliated UIT sponsors compensate Morgan Stanley when we sell their UITs, except when purchased through a fee-based investment advisory account. Morgan Stanley receives a portion of the maximum sales load, referred to as the dealer concession. The dealer concession is paid pursuant to the terms of the UIT prospectus and compensates Morgan Stanley for activities that result in the sale of a UIT. The compensation earned will vary by product sponsor, the term of the trust and the type of trust (Equity or Fixed Income).

Dealer Concession for Equities
Duration Invesco First Trust Guggenheim AAM
15 Months 1.25% 1.25% 1.25% 1.25%
2 Years 2.00% 2.00% 2.00% 2.00%
5 Years 3.00% 3.00% 3.00% 3.00%

Morgan Stanley Proprietary Sales Charge

On proprietary UITs clients pay a sales charge for each UIT sale. The maximum sales charge consists of any initial sales charge, the deferred sales charge, and the creation and development fee. The maximum sales charge varies depending on the length of the Trust.

Dealer Concession for Fixed Income
Duration Invesco First Trust Guggenheim AAM
Short Term (less than 5 years maturity) 1.10% 1.10% 1.10% 1.10%
Intermediate (5 to 12 years maturity) 1.60% 1.60% 1.60% 1.60%
Long Term (12+ years maturity) 2.60% 2.60% 2.60% 2.60%

 

 

Morgan Stanley Proprietary Sales Charge

On proprietary UITs clients pay a sales charge for each UIT sale. The maximum sales charge consists of any initial sales charge, the deferred sales charge, and the creation and development fee. The maximum sales charge varies depending on the length of the Trust.

  15 Month Trust 24 Month Trust
Maximum Sales Charge
Includes the Initial Sales Charge, Deferred Sales Charge, and Creation & Development Fee
1.85% 2.75%
Initial Sales Charge
No initial sales charge if the Unit price is $10.00 per Unit or less. If the Unit price exceeds $10.00 per Unit an initial sales charge is paid at the time of purchase.
Difference between the maximum sales charge, and the sum of any remaining deferred sales charge and the creation and development fee. Difference between the maximum sales charge, and the sum of any remaining deferred sales charge and the creation and development fee.
Deferred Sales Charge
Fixed dollar amount per Unit. If Units are redeemed prior to the Trust's final deferred sales charge payment, any uncollected portion will be deducted from the proceeds.
$0.135 $0.225
Creation & Development Fee
Compensates the sponsor for the creation and development of the Trust.
$0.05 per Unit payable as of the close of the initial public offering period, which is expected to be approximately three months from the Initial Date of Deposit $0.05 per Unit payable as of the close of the initial public offering period, which is expected to be approximately four months, and no later than six months, from the Initial Date of Deposit

Organization Cost

Fee charged by the UIT Sponsor to the client for organization costs of the trust public offering. This fee is charged as of the close of the initial public offering date and varies across trusts. Please refer to the prospectus for additional detail.

Processing Fee(s)

This fee is charged once per trade date to certain executed orders (e.g. equities, fixed-income, transactional futures, UIT, mutual funds and precious metals) and applies to all account types (excluding advisory accounts, 529 Plans and Choice Select).

$6 is charged per E-delivery per transaction, $6.50 is charged per paper per transaction

Annual Trust Operating Expenses

Fee charged by the UIT for operating expenses including the Trustee's fee and fees for portfolio supervision, bookkeeping, evaluation and administration, and other operating expenses. This fee is charged annually and varies across trusts. Please refer to the prospectus for additional detail.

Volume Concession

Morgan Stanley receives Volume Concession payments from external UIT sponsors based on the overall volume of UIT sales in a particular trust during the initial offering period.

As of July 1, 2017 all UIT sponsors pay volume concessions based on trailing 12 month primary sales less any primary redemptions. The current maximum volume concession that Morgan Stanley may receive, if eligible, is 0.175%. Morgan Stanley does not receive volume concessions on the sale of units which are not subject to a transactional sales charge (Advisory Sales), but these sales are included in determining which sales level Morgan Stanley meets.

Sponsor Payment Frequency Transaction Level (in millions) Volume Concession
  Equity Trusts Units Fixed Income Units
AAM Monthly (based upon distributor's sales during the previous consecutive 12-month period) Less than $25 0.000% 0.000%
$25 but less than $100 0.035% 0.000%
$100 but less than $150 0.050% 0.050%
$150 but less than $250 0.075% 0.050%
$250 but less than $1,000 0.100% 0.100%
$1,000 but less than $5,000 0.125% 0.100%
$5,000 but less than $7,500 0.150% 0.100%
$7,500 or more 0.175% 0.100%
First Trust Monthly (based upon distributor's sales during the previous consecutive 12-month period) Less than $25 0.000% 0.000%
$25 but less than $100 0.035% 0.035%
$100 but less than $150 0.050% 0.050%
$150 but less than $250 0.075% 0.075%
$250 but less than $1,000 0.100% 0.100%
$1,000 but less than $5,000 0.125% 0.100%
$5,000 but less than $7,500 0.150% 0.100%
$7,500 or more 0.175% 0.100%
Invesco Monthly (based upon distributor's sales during the previous consecutive 12-month period) Less than $25 0.000% 0.000%
$25 but less than $100 0.035% 0.035%
$100 but less than $150 0.050% 0.050%
$150 but less than $250 0.075% 0.075%
$250 but less than $1,000 0.100% 0.100%
$1,000 but less than $5,000 0.125% 0.100%
$5,000 but less than $7,500 0.150% 0.100%
$7,500 or more 0.175% 0.100%
Guggenheim Quarterly (based upon distributor's sales during the previous consecutive 12-month period) Less than $25 0.000% 0.000%
$25 but less than $100 0.035% 0.035%
$100 but less than $150 0.050% 0.050%
$150 but less than $250 0.075% 0.075%
$250 but less than $1,000 0.100% 0.100%
$1,000 but less than $5,000 0.125% 0.100%
$5,000 but less than $7,500 0.150% 0.100%
$7,500 or more 0.175% 0.100%