New England Securities

MUTUAL FUND AND ALTERNATIVE INVESTMENT MARKETING AND COMPENSATION ARRANGEMENTS

This document provides you, the investor, with additional disclosure regarding marketing and compensation arrangements New England Securities (“NES”) has with certain mutual fund companies and institutions that offer alternative investments.

Mutual Fund Marketing and Compensation Arrangements
NES offers more than 1,000 mutual funds from over 100 mutual fund companies. The great quantity of available funds requires us to utilize our training, marketing and sales support resources efficiently.  Accordingly, we focus on a select group of mutual fund companies that compensate us in exchange for greater access to our resources, as described in greater detail below. This select group of mutual fund companies participates in what is now commonly referred to as “revenue sharing arrangements,” generally either as a Strategic Partner or a Conference Partner. 

Strategic Partners are provided with the most access to our registered representatives. This access may include participation in sales conferences, training and education seminars, sales information and registered representative lists, and other various enhanced methods of communication with our sales force.  In addition, NES may publicize these mutual fund companies within proprietary marketing materials and web sites, including links to these mutual fund companies’ own web sites.  Each Strategic Partner may also provide support and help create targeted marketing campaigns for NES registered representatives.  Conference Partners are provided with an opportunity to attend sales conferences at which they and Strategic Partners receive significant marketing exposure to the NES sales force.  Conference Partners may also be provided with access to sales information and registered representative lists. 

The distributor, investment adviser or another related entity of a mutual fund company must make cash payments to NES to participate either as a Strategic Partner or as a Conference Partner. These payments are in addition to commissions, annual service fees (known as 12b-1 fees), and other fees and expenses disclosed in a mutual fund’s prospectus fee table.  Because these cash payments are not paid out of the fund’s assets, mutual fund companies may not necessarily include them as an item in the fund’s expense table.  Since information disclosed in the prospectus or Statement of Additional Information is subject to change, you should check for updates made thereto.  In addition, no portion of these payments is made by means of brokerage commissions generated by the mutual fund companies.    

Specifically, Strategic Partners make payments to NES which may include a percentage of new mutual fund sales, a percentage of total assets sold by NES and held either at the mutual fund company or in a brokerage account, fees for attending NES sales conferences, and networking fees which are fees incurred by NES to process certain account changes electronically.  Payments based on total sales and total assets are primarily used by NES to offset expenses for conferences. Conference Partners, on the other hand, make payments to NES which may include fees for attending NES sales conferences and networking opportunities with NES registered representatives.

Notwithstanding these arrangements, NES registered representatives have the ability to recommend any mutual fund to a client, provided NES has an existing selling agreement with that mutual fund company.  You should understand that none of the cash payments described herein are made directly to our branch managers or registered representatives who sell these funds.  Furthermore, branch managers and registered representatives do not receive a greater or lesser commission for sales of mutual funds for which NES receives these cash payments, or otherwise.  However, you should note that marketing or educational activities paid for with these payments may lead to greater exposure of Strategic Partners and Conference Partners with NES registered representatives.   You should always carefully review the mutual fund’s prospectus, along with all disclosures associated with the mutual fund, prior to making your investment decision. 

A listing of the Strategic Partner and Conference Partners, along with total year 2005 compensation (to nearest hundred) paid by such companies to NES, from highest to lowest, is as follows:

Other Compensation Arrangements
NES and its registered representatives may also receive other compensation from Strategic Partners and Conference Partners, as well as any mutual fund company with which it has a current selling agreement.  For example, a mutual fund company or its advisor may sponsor its own conferences for training and educational purposes to which certain NES registered representatives are invited.  In addition to attending these conferences without charge, the mutual fund company may also reimburse or pay for the travel and other related expenses incurred by NES registered representatives to attend such conferences.  Moreover, a mutual fund company or its advisor may pay for certain expenses incurred by a registered representative or a NES branch office in connection with dinners or events for clients and other miscellaneous expenses incurred by registered representatives.

Mutual fund companies other than those identified above as Strategic Partners and Conference Partners may make significant payments to NES in order to participate in company sponsored events.

Furthermore, Pershing, LLC, NES’s clearing firm, offers a “No Transaction Fee” program with more than 140 mutual fund companies that offer no-load mutual funds.  Participating mutual fund sponsors pay a fee to Pershing, LLC to participate in this program, and a portion of this fee is shared with NES.  None of these fees are paid to any registered representatives who sell these funds. 

Alternative Investment Marketing and Compensation Arrangements
NES also receives compensation from companies offering alternative investments products such as real estate investment trusts, and oil and gas partnerships. 

These alternative investment companies make payments to NES which may include a percentage of new sales, a percentage of total assets sold by NES and held either at the company or in a brokerage account, and fees for attending NES sales conferences.  Payments based on total sales and total assets are primarily used by NES to offset expenses for conferences.

You should understand that none of the cash payments described herein are made directly to our branch managers or registered representatives who sell these products.  Furthermore, branch managers and registered representatives do not receive a greater or lesser commission for sales of products for which NES receives these cash payments, or otherwise.  However, you should note that marketing or educational activities paid for with these payments may lead to greater exposure of these companies' products with NES registered representatives. You should always carefully review the product's features and risks, along with any disclosures associated with the product, prior to making your investment decision.

A listing of these companies along with total year 2005 compensation (to nearest hundred) paid by such companies to NES, from highest to lowest, is as follows:

If you have any questions regarding this disclosure, please contact us at (800) 472-7227 Monday through Friday 9 a.m. to 6 p.m. ET.

New England Securities
501 Boylston Street
Boston,  MA 02116