Transforming Compliance Communications from Challenge to Differentiator

Transforming compliance
communications
from challenge to
differentiator

2
TRANSFORMING COMPLIANCE COMMUNICATIONS FROM CHALLENGE TO DIFFERENTIATOR
Table of Contents
Executive Summary 3
Managing Change and Complexity in a Dynamically Evolving Industry 5
• Demographic and Market Changes Require the Flexibility
to Keep Up (page 5)
• Reconciling VA Product Evolution with Emerging Customer
Expectations (page 6)
• How Would the New Consumers Assess Your Current
VA Delivery Process? (page 7)
Compliance Communications – Current State Opportunities 7
• Personalization Can Deliver Cost Savings and
Consumer Rewards (page 8)
• “First-Dollar” Prospectus Delivery (page 9)
• Annual Prospectus Updates and Supplements (page 9)
• Ongoing Regulatory Mailings (page 9)
• Print on Demand and the Summary Prospectus –
Is the Cost Justified? (page 10)
• What Database Drives Your Fulfillment Activity
(Does It Report Back to You)? (page 10)
• E-Delivery (page 11)
Take a Leap Forward 12
Options Available to VA Carriers for Regulatory Fulfillment 13

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TRANSFORMING COMPLIANCE COMMUNICATIONS FROM CHALLENGE TO DIFFERENTIATOR | EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Dynamic changes in the financial services industry have added
complexity and challenges for VA carriers in meeting their
compliance obligations. Traditional “tri-annual” approaches
to fulfillment of compliance documents, developed in a very
different era, were designed primarily to maximize carrier
efficiencies, using mass offset printing of documents. However,
as the industry has evolved, institutions may be well served in
re-evaluating their long-standing fulfillment approach to uncover
any hidden costs and savings opportunities.
Recent trends prompting a reassessment include:
• An explosion in the number of VA investment options, further increasing page count and thus print
and postage expense;
• The introduction of summary prospectuses, which have received regulatory approval and
wide-spread adoption by fund companies, for VA subaccounts – with proposed adoption for VA product
prospectuses on the horizon;
• A changing customer demographic who prefer digital over paper communications, want their content
personalized, and are averse to business practices that are not sustainable;
• Improved cost efficiencies of digital print on demand whose inherent benefits of customization and
minimal waste are leveling the playing field with traditional “Big Book” offset print;
• Increased scrutiny on prospectus and other regulatory mailing deliveries in the aftermath of the
financial markets fallout in 2008; and
• The customer and advisor experience, which are increasingly important in a highly competitive
environment where expectations are for customized information, presented in the way the customer
wants to receive it and can easily comprehend.
Three compliance fulfillment options are available, each with varying degrees of challenge
and opportunity:
• The Big Book – Once an industry standard, a single book is created with all of the required information
for all investment options offered in the product. The more options, the greater the page count and
print/postage costs associated with delivery.

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TRANSFORMING COMPLIANCE COMMUNICATIONS FROM CHALLENGE TO DIFFERENTIATOR | EXECUTIVE SUMMARY
• The Mini Catalog – A more cost-effective alternative to the Big Book, whereby multiple smaller books
are created grouping subsets of options based on usage statistics. Customers with two or three of the
most popular options may be sent one small book. Others may receive multiple books.
• State of the Art – A “nextgen” approach where investor disclosure communications include only
those personal holdings held by the recipient. Leveraging data technology and process efficiencies, the
state-of-the-art approach aims to reduce costs, deliver a better customer experience, and maintain VA
firm control.
If you haven’t already, it’s time to review your approach to compliance communications to ensure you’re
providing the best possible customer and advisor experience, ensuring regulatory compliance and using
the most cost-effective approach. Solutions are available to help achieve dramatic improvements in all
of these areas and to leapfrog the competition for those firms willing to make the move. This document
reviews current delivery obligations from post-sale to ongoing regulatory mailings to help you begin to
assess the most appropriate method for your institution.

5
Managing Change and
ComplexityinaDynamically
Evolving Industry
The variable annuity (VA) industry has always
been one of the most dynamic in financial
services, responding to changes in tax laws, an
explosion of investment choices, innovative new
features and an ever-changing risk environment.
While many financial products only have to
comply with one set of rules and regulators, VA
products are regulated by securities regulators,
the Securities and Exchange Commission (SEC)
and the Financial Industry Regulatory Authority
(FINRA), as well as individual state insurance
departments.
Demographic and Market Changes Require
the Flexibility to Keep Up
The market for variable annuities has changed
and expanded with baby boomers increasingly
dependent upon their own savings and
investments to provide retirement income in
light of the decline in traditional pensions and
uncertainty surrounding Social Security. With
dramatic growth in Internet usage and mobile
technology, communicating with customers and
their advisors is also undergoing significant
change – even in the area of investor disclosure
where there has been a clamor for “less is more.”
For example, summary prospectus adoption
has grown dramatically with over 80% of funds
used in VA products having adopted summary
prospectuses. Effective as of February 28, 2009,
the SEC’s Summary Prospectus rule allows mutual
funds (including funds used as subaccounts in
VAs), to substitute a concise “plain English”
summary prospectus for the traditional statutory
prospectus provided that they meet certain
technical obligations for delivery and web
hosting.
Leveraging the summary prospectus creates
significant opportunities for cost savings for
VA carriers and a better experience for VA
customers. Additionally, advisors increasingly use
summary prospectuses as a tool to educate and
sell to their customers because the documents
are concise, standardized and written in “plain
English.” That’s a great start, but more needs to
be done to rein in costs and improve investor
service in an area plagued by waste and over
communication.
Bars = Adoption in %
Adoption of Summary Prospectus by VA Fund Issuers
Source: Broadridge Quarterly Summary Prospectus Index, as of January 7, 2014
Q2 2013
Q3 2013
Q4 2013
Q3 2012
Q4 2011
Q1 2011
Q3 2010
Q1 2013
Q2 2012
Q3 2011
Q4 2010
Q2 2010
Q4 2012
Q1 2012
Q2 2011
Q1 2010
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
83%
84%
84%
79%
78%
78%
78%
75%
75%
75%
74%
61%
59%
53%
50%
11%
Percentage of Variable Product Fund CUSIPs that have filed standalone summary prospectuses
as available for delivery from Q1 2010 to Q4 2013.

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Note: As of the release of this document, the
SEC has identified the VA Summary Prospectus
Initiative (i.e., to provide summary prospectus
versions of the VA product prospectus) as one of
its top priorities.
Reconciling VA Product Evolution with
Emerging Customer Expectations
More Variety
Variable annuities were initially used in the US
in 1952 as vehicles to fund pension agreements
by the Teachers Insurance and Annuities
Association-College Retirement Equity Fund
(TIAA-CREF). Retail variable annuities today
have been around for a few decades, but it was
fairly recent that they experienced explosive
growth in the variety of insurance riders and
fund choices offered. Whereas the earliest VAs
offered only proprietary subaccounts and maybe
a few non-proprietary mutual fund subaccounts,
today the average VA contract has in excess
of 50 subaccounts from multiple fund issuers.
But this range of choice comes at a price. The
industry standard approach of sending out a “Big
Book” containing disclosures for all 50+ fund
subaccounts in a single mass mailing to recipients
who, on average, own only 4 of these investments
results in massive over delivery of disclosure
information that is costly to send out.
More Complexity
VA compliance communications are also complex,
requiring multiple types of information including
the annuity contract, any associated riders, and
prospectuses for the various investment options.
The typical VA customer receives a large, complex
stack of material likely delivered in multiple parts
at different times. Generally, the product and
proprietary subaccount information is created by
the annuity provider while any non-proprietary
subaccount investment information is created
by various fund companies. This bundle of
information can be confusing and inconvenient
for the client.
Changing Expectations
Whereas in the past consumers were identified
by age brackets (i.e., Baby Boomers, GenX);
today more than 70 million “New Consumers”
are defined more by shared values and less by
demographics, according to brand innovation
firm BBMG. A 2011 study found that these New
Consumers are more educated, outspoken,
increasingly concerned with a product’s impact
on the planet and twice as likely to reward or
punish brands based on corporate practices. Even
during a recession, 25% are willing to pay for more
sustainable alternatives. Hence, new and future
customers that receive multiple, impersonal
big books with voluminous page counts might
disengage with the carrier as an “eco-unfriendly”
company with which to do business.
In a climate of
complexity and
change, VA carriers
need to move
ahead or risk falling
behind. What are the
consequences for
your current state,
and what are your
opportunities for
change?
Average # Customer Holdings
Average # VA Subaccounts
Investor Disclosure: More is Less
According to industry statistics, the average variable annuity
contract contains 51 fund subaccounts whereas the typical
policyholder only owns four of these. As a result, as much as
92% of the information a customer receives is irrelevant to
their personal portfolio – thereby wasting significant money
on print and postage and creating an unsatisfactory customer
experience.
4
51

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How Would the New Consumers Assess Your
Current VA Delivery Process?
Managing this industry change and
communications complexity poses a variety of
challenges and seemingly incongruent goals of
reducing costs, staying compliant while improving
the customer experience. VA carriers need to
assess whether or not their current approach
to compliance fulfillment is cost-effective and
customer friendly. What are the “hidden costs”
in the current approach when compared against
emerging non-traditional approaches?
Compliance
Communications − Current
State Opportunities
In addition to initial delivery of product-specific
documents, such as the annuity contract
and prospectus, the annuity carrier must
deliver several items annually for a customer’s
subaccount holdings including annual prospectus
updates, annual and semi-annual reports, and any
applicable supplements. Historically, carriers have
had two main approaches available to meet these
delivery requirements:
1. Sending a “Big Book” of all the available
investments; or
2. Using a “Mini Catalog” approach, that sends
one or more smaller books of investments that
may still include subaccounts that the investor
does not hold. Perhaps worse yet, a customer
may have one or two investments that are
included in different mini catalogs, requiring
mailing of multiple mini catalogs.
These approaches can create both a poor
customer experience due to substantial over
delivery and exceptional challenges for the
advisors on whom the annuity industry depends
to distribute its products. Key customer benefits
of the overall VA product can be obscured by
all of the complex compliance communications,
a significant portion of which pertains to
investment options not even selected by the
client. In addition to high cost and poor customer
experience, these bulk print approaches
also make it extremely difficult to manage
communications and ensure compliance with all
applicable rules.
Note: Product changes include new contracts, new benefits, and changes to contracts,
benefits, fees and products (excluding changes to underlying funds).
Source: Morningstar 2013
Total Number of VA Product Changes Filed, Q1 2011 to Q3 2013
97
182
84
101
106
168
59
130
162
40
49
Q3 2012
Q4 2011
Q1 2011
Q1 2013
Q2 2013
Q3 2013
Q2 2012
Q3 2011
Q4 2012
Q1 2012
Q2 2011
0 50 100 150 200

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In addition, the Big Book or Mini Catalog
approaches—which are generally one-time
mailings—may not address obligations to deliver
prospectus updates and supplement mailings.
This can create a business risk as FINRA fines
for failure to deliver prospectuses have risen
in recent years and brought negative press to
those firms penalized. Even when these events
are recognized by the VA carrier, the mailing is
cost prohibitive because the books contain all
fund options rather than being targeted to an
individual’s holdings. Since the VA carrier doesn’t
control the changes that require the updates and
supplemental mailings, it is very hard to predict
and budget for the costs. This can cause a budget
issue in a time of economic hardship when most
firms are focused on reducing costs.
Personalization Can Deliver Cost Savings and
Consumer Rewards
The current compliance communications process
for investor disclosure requirements is built
around the objective of providing efficiency for
the sender (the VA carrier) and not the recipient
(the customer). These prevailing print/mail
approaches have been built to maximize pick-and-
pack efficiencies with bulk pre-printed materials.
They offer little to no opportunity to personalize
and deliver only the relevant prospectuses,
creating both unnecessary cost for the carrier
and unnecessary over delivery and waste for the
customer.
Key Consideration: Using print-on-demand
capabilities to create customer portfolio-
specific packages for the initial prospectus
delivery and annual updates and supplements
is a more customer- and advisor-friendly
approach, and creates a far better critical
first impression. Further, as the VA offerings
and market have evolved, it’s questionable in
many cases as to whether or not the original
objective of operational efficiency is still
being met. Print-on-demand, portfolio-specific
packages can also be much less costly with the
reduction in printed pages, postage and “zero
inventory” required.
Big Books and Mini Catalogs may frustrate consumers looking for more personalized
information, and less waste.
Big Book Approach Mini Catalog Approach
Investor Experience
???? !!!!
The Big Book and Mini Catalog approaches can both create a poor customer experience and result in over delivery.
They are also one-time mailings and may not adequately address fiduciary obligations to deliver prospectus
updates and supplements.

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Annual Prospectus Updates and Supplements
Portfolio-specific printing may also be the
preferred approach to fulfill annual prospectus
updates and supplements. However, fulfillment
is just half of the equation. Also necessary
is not just the ability to deliver the most
recently filed document on the SEC’s EDGAR
system, but to implement a method of tracking
individual document deliveries and applying the
“intelligence” to know which type of document
to deliver (i.e., a summary prospectus in lieu of
a supplement) based on client business rules
and delivery preferences. Most printers are not
equipped to perform tracking of the latest EDGAR
filings and individual document deliveries – once
the print job is done, they “forget” and move
on to the next print run. That leaves the onus of
compliance tracking back on the shoulders of the
carrier, which can be both a time and resource
drain, if not impossible to accomplish due to a
lack of technology and “best-practice” processes
in place.
Ongoing Regulatory Mailings
Prospectus delivery is just one component of the
tri-annual regulated mailings process. VA carriers
are also obligated to deliver the annual report
(typically mailed in February/March) and semi-
annual report (typically mailed in July/August).
These books can be just as large and expensive to
fulfill as the prospectus, so it is critical to find the
optimal approach that mirrors your business goals
for cost efficiency as well as customer service.
Two options might be worth considering in lieu of
your current approach:
1. Leverage the Mutual Fund Industry Utility
Model. Carriers have traditionally wanted to
brand their ongoing regulatory communications
and have assumed the responsibility for
distributing these shareholder report
mailings, even though the actual compliance
responsibility lies with the funds. Given the
costs, carriers are starting to re-think this
approach and are taking a closer look at
leveraging the fund companies’ practices for
distribution of these communications on behalf
of the carrier.
“First-Dollar” Prospectus Delivery
The typical prospectus package for VA customers
has historically been in the form of a Big Book
which is difficult for an investor to read, either
in print or on the web, because the majority of
information is not relevant to his/her personal
holdings. Based on industry averages of over 50
fund subaccounts and four personal investor
holdings, we can conservatively assume that 80-
90% of the information an investor receives is not
required, amounting to massive over delivery and
cost waste.
Summary prospectuses can certainly help.
Although adoption of summary prospectuses has
soared over the past three years – both for funds
offered as mutual funds and as VA investment
options – the actual use of these summary
prospectuses by the annuity carriers has not.
So while over 80% of variable product CUSIPs
have made summary prospectuses available for
delivery in the VA channel, VA carriers may not
be delivering these documents to investors. One
reason is the summary prospectus requirements
for an overall table of contents and dual
pagination (i.e., pagination for each individual
fund subaccount and a second sequential
pagination for the overall book contents) when
grouping summary prospectuses into a combined
book. For a VA product that must work with a
mix of summary and statutory prospectuses, the
resulting document assembly task can become a
barrier to adoption.
A more recent innovation is to create an
algorithm to compose and print mini catalogs
which include smaller groupings of the more
popular funds, and to mail these out according
to each investor’s holdings. Although this helps
somewhat with over delivery, the investor still
receives one or more fairly big books, each of
which may still contain a lot of information not
relevant to their holdings. Furthermore, these
approaches don’t allow for mixing full statutory
and summary prospectuses in the same mini
catalog because the books tend to be submitted
to the SEC as a single filing.

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Key Consideration: Of course, taking
advantage of these potential cost savings
requires a reliable data and document
management capability which continually keeps
the carriers connected to the nearly 600 fund
complexes. Unless this capability is already
built into your current business model, you
will likely have to outsource this function to a
qualified service provider who specializes in
this area or who can broker this service for you.
2. Portfolio-Specific Prospectus Updates and
Shareholder Report Documents. As with the
initial prospectus delivery, digital portfolio-
specific printing is not only more customer-
friendly, but can be more cost-effective in many
instances due to the significant reduction in
page count and postage.
Key Consideration: If the key goal is customer
experience, you might want to personalize
these documents with the same portfolio-
specific technology used to digitally print initial
prospectuses that contain only the investor’s
specific holdings, and nothing more. With a
portfolio-specific approach, you eliminate over
delivery and may be able to actually reduce
production costs despite the higher per-
impression cost of digital print.
Print on Demand and the Summary
Prospectus – Is the Cost Justified?
Historically, offset print has been the most
efficient way to handle first-dollar prospectus
packages and ongoing compliance disclosures,
due to the high page count and large print
volumes when using the Big Book or Mini
Catalog approaches. But with ever-expanding
fund offerings, the cost, investor dissatisfaction
and inventory waste from all this over delivery is
pushing the pendulum away from offset print –
particularly for prospectus delivery.
Print-on-Demand (POD) capabilities, and the
personalization it enables, are becoming more
feasible due to the reduced page count, lower
digital print costs, and corresponding postage
and inventory efficiencies. By using summary
prospectuses, personalized POD documents can
be even more cost effective because they reduce
page count – resulting in increased savings
of printing, postage and inventory expenses.
Implementing the summary prospectus may also
provide a potential bridge to e-delivery as SEC
Rule 498 requires making additional information
available online.
What Database Drives Your Fulfillment
Activity (Does It Report Back to You)?
Not to be overlooked is the value of integrating
a document database within your optimized
fulfillment approach. Financial printers are
accustomed to receiving files and printing jobs;
however, they are ill-equipped to monitor, archive
and report on the millions of individual document
deliveries you fulfill each year. Chances are they
are also unable to monitor the latest SEC filings
on EDGAR and marry this intelligence with a
history of investor document deliveries tied to
your business rules and delivery preferences.
For example, if an investor receives a statutory
prospectus and then a summary prospectus
becomes available – which will you deliver for
the annual prospectus update? Or if a fund
name change occurs, will you mail a summary
prospectus, supplement, or neither? And is the
database – if one exists – intelligent enough
to know when/how to apply suppression and
householding rules?
Key Consideration: Like any database, a fair
amount of upfront work is required to ensure
the data that drives your compliance fulfillment
adheres to your business rules and delivery
preferences and captures information for
reporting and auditing purposes. Most likely
your company or a financial printer do not readily
have these capabilities nor the time to build
it. Make sure you do your homework to find a
partner who is up to the challenge and whose
process is flexible to adapt to your evolving
business requirements.
Monitoring investor
deliveries and filing
changes on the SEC’s
EDGAR system can
be a monumental
task. However, you
need to manage
both well to ensure
the most compliant
investor disclosure
approach.

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E-Delivery
The lowest cost alternative, and most investor-
friendly approach, is electronic delivery.
Unfortunately VA channel e-consent rates have
historically been low (5% - 10%) whereas the
norm in the brokerage channel are consent rates
reaching as high as 30% or more for some firms.
Why the odd dichotomy between VAs and mutual
funds? The reason is that while the VA carriers
“own the product,” it is the advisors who have the
actual email addresses. As such, advisors might
not be encouraging their customers to opt in for
e-delivery as is a fairly common practice with
retail customers of mutual funds. As the face of
the VA customer continues to evolve, so too is the
adoption of e-delivery among New Consumers
likely to increase because:
1. 84% of mutual fund investors use the Internet
for financial purposes; and
2. Advisors are changing their sales practices
from selling on paper to selling on an iPad or
other tablet.
However, taking advantage of the customer
experience and cost savings benefits of e-delivery
requires sophisticated and reliable solutions
for obtaining and tracking client consent, and
the ability to track and report delivery at the
individual customer level. Do you have a good
process in place or have you been frustrated by
failed attempts to get your customers to opt
for e-delivery? Additionally, the infrastructure
to control approved versions of materials and
to archive and retrieve the specific materials
delivered must also be in place.
While a few companies have taken small steps,
primarily aimed at reducing the cost of traditional
compliance communications, many companies
remain saddled with the legacy of pick-and-
pack investor disclosure mailings, as well as the
impersonal Big Book or Mini Catalog approaches.
When considering these new leading-edge
solutions, many VA carriers discovered that
they could not justify the cost of building the
necessary solutions to support these new
approaches on their own. However, third-party
solutions which have already been proven in
the mutual fund industry are introducing similar
capabilities to the VA industry. Early adopters of
these new outsourced services can significantly
reduce costs, more confidently control risk, and
create a new competitive standard for enhanced
customer and advisor experiences.
On average, nearly 4% of all mutual fund, ETF and variable product CUSIPs are affected by new filings on EDGAR each day. On
the busiest day, 20% of the fund CUSIPs are affected by filing changes on EDGAR – representing more than 8,100 fund CUSIPs.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
25%
10%
20%
5%
15%
0%
Percentage of Mutual Fund, ETF and Variable Product CUSIPs that change on a daily basis
Daily SEC Fund CUSIP Filing Activity on EDGAR (2012 and 2013 calendar years)
Year
2012
2013
# CUSIPs
39,879
40,127
Avg. Daily Change
3.58%
3.65%
Max. Daily Change
16.27%
20.21%
Min. Daily Change
0.02%
0.32%

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Take a Leap Forward
Leading carriers have already begun to re-think
their approach to compliance fulfillment, moving
from a traditional Big Book approach or an
incrementally better Mini Catalog approach to
a state-of-the-art, technology-based approach
that can have substantial cost benefits. While
implementation of these solutions takes an
investment of both money and human resources,
the savings can be so substantial that the
conversion can pay for itself in as little as a year
or less depending on the approach or partner you
choose. Additionally, sustainable ongoing savings
of 20%, or even more, are certainly attainable.
And this is before you assign a value to the
improved customer and advisor experience.
It simply starts with the commitment and focus
to move to a better solution; one that’s better
for you, your customers and the advisors who
distribute your products. Plus, it’s not an
all-or-nothing decision. You may choose to move
to a print-on-demand approach for prospectus
delivery while transferring responsibility for
semi-annual and annual reports to the fund
company. You may choose to move toward the
ultimate solution, including e-delivery, in phases.
What’s most important is to re-examine your
approach, recognizing that the game has changed
and there are significant potential benefits, both
in terms of customer and advisor experience and
operational costs.
Key Consideration: If you’re not building the
solution yourself (and chances are you have
neither the time nor the in-house technology
resources to take on a project of this scale), make
sure you choose your compliance fulfillment
partner wisely. You’ll want to connect with a
partner with a good understanding of your
compliance needs, who can provide a consultative
rather than a “shoe-horn” sales approach, and
that has the financial stability and infrastructure
to support your needs both near-term and
long-term.
When you consider enhancing your traditional
compliance fulfillment approach with a more
state-of-the-art platform, you will want to
incorporate several factors into your analysis:
ˆˆ Strengths and limitations of your current
approach to compliance communications
ˆˆ Available options
ˆˆ Potential phasing strategies
ˆˆ Adoption of the summary prospectus
approach, including website maintenance
ˆˆ Expanding electronic distribution options
and usage
ˆˆ Cost savings targets, now and in the future
ˆˆ Customer and advisor experience
enhancements
ˆˆ Ability to migrate legacy systems and
accommodate print, electronic and
web outputs
ˆˆ Implementation timeframe and resource
commitment
ˆˆ Leveraging a mature solution that incorporates
client business rules
ˆˆ End-to-end reliability in regulatory compliance
ˆˆ Review of third-party data security, business
continuity and disaster recovery plan
ˆˆ Confirm financial stability of third-party
provider to ensure their longevity
ˆˆ The ability to track fulfillment expenses for
chargeback opportunities
ˆˆ Maintaining an archival of individual delivery
histories for reporting and auditing purposes
On the following two pages, you will see three
options available to carriers in meeting their
regulatory compliance fulfillment needs. State-of-
the-art solutions exist that can help improve all of
the factors outlined above.
All of these
challenges create a
major opportunity
for innovative
carriers to leapfrog
the competition,
create a better
customer and advisor
experience, while
achieving substantial
cost savings.

13
Options Available to VA
Carriers for Regulatory
Fulfillment
The table below depicts three options available
to carriers in meeting their compliance
communication fulfillment needs: the traditional
FULFILLMENT APPROACH GENERAL DESCRIPTION SUMMARY PROSPECTUS REGULATORY MAILINGS
The Big Book A single book is created with
all of the required information
for all investment options
offered in the product. The more
options, the greater the page
count and print/postage costs
associated with delivery.
Only available if the Big Book
is comprised of individually
filed prospectuses (i.e., not
submitted as a single
multi-fund filing on EDGAR).
Big Book approach used
for shareholder report
mailings (semi-annual
and annual reports).
The Mini Catalog Multiple smaller books are
created grouping subsets
of options based on usage
statistics. Customers with
two or three of the most
popular options may be sent
one small book. Others may
receive multiple books.
Not generally available due to
limitations on mixing summary
and statutory prospectuses.
Mini Catalog approach used
for shareholder report
mailings (semi-annual
and annual reports).
State of the Art Investor disclosure
communications include
only those personal holdings
held by the recipient.
Subsequent regulatory
communications are only sent
to those customers who need
to receive the particular
document (i.e., no irrelevant
or redundant mailings).
Can achieve substantial cost
savings, as well as improved
customer experience, by
delivering these streamlined
“plain English” documents in
a portfolio-specific manner.
Two options available:
• Industry utility (as leveraged
in mutual fund channel)
wherein print costs of
shareholder reports are
transferred to fund partners
who are typically obligated
to deliver these documents.
• Portfolio-specific printing
leveraging policyholder data
to digitally print-on-demand
books that contain only
individual investor holdings.
Big Book approach, the Mini Catalog approach,
and newer state-of-the-art solutions designed to
reduce costs, improve the customer experience
and help mitigate business risk associated with
investor disclosure obligations.

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COMPLIANCE KEY BENEFITS LIMITATIONS E-DELIVERY
One-time “blanket mailing”
doesn’t account for
prospectus updates and
supplements (i.e., only
captures one point in time).
”It’s the Devil that we know.”
Traditional approach requires
the least change.
Every customer experiences
massive over delivery – bulky
impersonal communications,
most of which are not
representative of their
individual investment
holdings (i.e., more
information than required).
Costs can be unwieldy,
particularly for products with
many investment options.
Available; however, historically
low (single-digit) adoption by
VA policyholders has made this
fulfillment approach largely
irrelevant to date.
One-time “blanket mailing”
doesn’t account for
prospectus updates and
supplements (i.e., only
captures one point in time).
Less costly than the Big Book.
Leverages offset print which
historically has been perceived
as the “most cost-efficient”
process.
Mini Catalogs also are “one-
time” events and can create a
compliance risk and result in
over delivery. Many customers
still receive multiple Mini
Catalogs, creating a customer
experience that can be worse
than a single Big Book. Cost
savings are limited as well.
Available; however, historically
low (single-digit) adoption by
VA policyholders has made this
fulfillment approach largely
irrelevant to date.
Ability to deliver portfolio
specific documents and the
summary prospectus reduces
costs of prospectus updates
and/or supplements. Also,
the ability to track delivery
history and monitor the
latest SEC filings on a
centralized database helps
to assure the appropriate
documents are delivered for
each new transaction.
Re-engineered approach
could significantly reduce
costs and offer fast ROI: A
minimum of 20% sustainable
long-term savings and payback
in Year One. Also improves
the customer experience
and advisor productivity
as summary prospectus
becomes a sales/marketing
tool that presents streamlined
information in “plain English.”
Potentially improves compliance
and retains client control.
Achieving full benefits
requires organizational
commitment by the carrier
and their fund partners to
migrate to the new approach.
This can impact many
areas including Marketing,
Procurement, Operations and
Legal/Compliance.
Available and more easily
implemented when combined
with an industry-compliant
and ESIGN-compliant consent
management approach, along
with an awareness program.
Industry utilities or “nextgen”
solutions to help accelerate
e-delivery rates leveraging
brokerage consent databases
are currently in development.

No part of this document may be distributed, reproduced or posted without the express written
permission of Broadridge Financial Solutions Inc. © 2014 Broadridge Financial Solutions, Inc.
Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc.
EDGAR® is a registered trademark of the U.S. Securities and Exchange Commission.
MKT_524_14
Contact Us
To further discuss the information in this document, please call us toll-free
at +1 800 481 2331 or email BRIntelSolutions@broadridge.com.
About Broadridge
Broadridge Financial Solutions, Inc. (NYSE:BR) is the leading provider of
investor communications and technology-driven solutions for broker-
dealers, banks, mutual funds and corporate issuers globally. Broadridge’s
investor communications, securities processing and business process
outsourcing solutions help clients reduce their capital investments in
operations infrastructure, allowing them to increase their focus on core
business activities. With 50 years of experience, Broadridge’s infrastructure
underpins proxy voting services for over 90% of public companies and
mutual funds in North America, and processes more than $5 trillion in fixed
income and equity trades per day. Broadridge employs approximately 6,400
full-time associates in 13 countries. For more information about Broadridge,
please visit broadridge.com.

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