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RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 1, 2 OR 754

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

F-2 Direct-at-Fund

American Funds® F-2 Direct-at-Fund program highlights

Capital Group, home of American Funds®, offers a direct-at-fund investment option for retail accounts with the F-2 and 529-F-2 share classes. Class F-2 and 529-F-2 shares have no 12b-1 fees and include an optional fee-debiting service.

F-2 and 529-F-2 shares are available for accounts with fund minimums of $250 ($1,000 for money market or tax-exempt funds) as specified in the prospectus.

Why choose the F-2 Direct-at-Fund program?

  • Ability to invest direct at American Funds, with fee-based options
  • Cost-effective, direct access to objective-based funds and portfolios
  • Convert existing commissionable accounts to an advisory relationship with fee-neutral impact to the investor
  • Serve your clients’ small businesses through SEPs/SIMPLEs
  • Nurture younger relationships while their assets grow

 

How can your firm access this option for clients?

  • Once your firm has signed an F-2 Share Class Agreement with Capital Group, the F-2 Direct-at-Fund program will be available to all registered investment advisors (RIAs) and dually registered broker-dealers  

 

What types of funds and accounts will offer Class F-2 shares direct-at-fund?

  • All American Funds and funds of funds (a minimum investment of $250 per fund is required for most funds)
  • All new and existing retail accounts in a fee-based program, including retail taxable, IRA (traditional, Roth, payroll deduction, SEP, SIMPLE) and college savings (Coverdell ESA and UGMA/UTMA) are offered in F-2 shares
  • 529 accounts are offered in 529-F-2 shares

 

What is the pricing?

  • For IRAs and Coverdell ESA accounts: a one-time $10 setup fee for new accounts and a $10 annual custodial fee applies

 

What are the available services?

  • American Funds Service Company® (AFS) offers optional fee debiting with quarterly payments via ACH, including 529 plans
  • Accounts held in Class F-2 shares will have a fee applied in basis points as designated by your firm
  • Fees will be calculated in arrears by applying the designated fee schedule to the eligible account’s average daily balance
  • Financial professionals will be able to designate accounts to include or exclude in the fee calculation
  • Financial professionals will continue to enjoy the same 24/7 website account access, marketing support, planning and fund selection tools that they already receive from American Funds
  • Investors will receive quarterly statements from American Funds
  • Automatic rebalancing is available

Frequently asked questions

There are multiple options from which a firm can choose to select its lineup of available fee-debiting options:

1.     Multiple flat rates – your firm can select up to five different flat rates anywhere between 5 bps and 200 bps (rates should end in “0” or “5”, i.e., 0, 25, 60, 100, 115)

2.    Tiered advisory fee schedule (nonblended breakpoint)

Once the firm has selected its desired combination of the above options, financial professionals can select which rate or schedule is most appropriate for each of their accounts. Each option is an annual rate, billed quarterly in arrears.

The advisory fee rate that applies to each eligible client’s account is determined by the cumulative asset value on the last day of the quarter. The cumulative asset value is determined based on all account types and share classes that are held by AFS, including A shares and the American Funds U.S. Government Money Market Fund℠. If the account is fully depleted prior to quarter end, the cumulative asset value of the account the day prior to the all-share transaction applies.

The firm has the option to outline a tiered fee schedule within the following guidelines:

  • Maximum of five tiers
  • Set in increments ending in “0” or “5,” not to exceed 200 bps

 

Tiered fee schedule example:

Step 1: Identify the cumulative asset value for the client.

An investor has four accounts with the following asset values:

     Fund

     Value

    The Income Fund of America®

     $240,000

    The Growth Fund of America®

     $120,000

    Capital World Bond Fund®

     $10,000

    American Funds U.S. Government Money Market Fund

     $5,000

 

The cumulative asset value for this client will be $375,000 based on our aggregation policies. All commissionable and noncommissionable shares of American Funds U.S. Government Money Market Fund are included in the total cumulative asset value. External assets are excluded.

Step 2: Identify the advisory fee rate, based on the client’s total cumulative asset value.

The firm’s tiered advisory fee schedule is:

     Cumulative asset value

     Advisory fee rate

     $0.00 to $249,999.99

     1.00% (annual rate of 100 bps)

     $250,000.00 to $499,999.99

     0.75% (annual rate of 75 bps)

     $500,000.00 to $999,999.99

     0.50% (annual rate of 50 bps)

     $1,000,000.00 to $2,999,999.99

     0.35% (annual rate of 35 bps)

     $3,000,000.00 and above

     0.25% (annual rate of 25 bps)

 

Based on the firm’s tiered fee schedule, a client with a cumulative asset value of $375,000 on the last day of the quarter would be subject to the 0.75% advisory fee.

Step 3: Identify the average eligible assets for each fund variable (average daily balance ÷ number of days in the quarter).

Step 4: Calculate the advisory fee amount for the quarter for each fund variable.

Advisory fee payment formula (per fund variable):

f2-direct-advisor-fee-amt = (average eligiible assets) x (number of days in quarter) x (advisory fee rate) / number of days in year

Total average eligible assets = $375,000

Number of days in the quarter = 90

Advisory fee rate = 75 bps

Number of days in the year = 365

Advisory fee amount = $693.49

All fees, whether flat or tiered, are calculated quarterly in arrears by applying the selected fee to a client’s eligible accounts' Average Daily Balance (ADB). To exclude accounts from the calculation process, submit your request in writing.

Your firm will receive fee payments via ACH the month after the off-calendar quarter-end. (For example, fees for December–February are deducted and paid in March.) The quarterly payout schedule is March, June, September and December.

If your firm is eligible for the program, a principal or other authorized individual at your firm must sign an F-2 Share Class Agreement with Capital Group. You may begin this process by calling us at (800) 421-5450.

Once your firm has signed an F-2 Share Class Agreement, you will receive a link to account applications and supplements.

You can send forms electronically. You can also send them via fax or mail to an American Funds Service Center. Call us at (800) 421-5450.

The Capital Advantage®

Since 1931, Capital Group, home of American Funds, has helped investors pursue long-term investment success. Our consistent approach — in combination with The Capital SystemSM — has resulted in superior outcomes.

Aligned with investor success 

We base our decisions on a long-term perspective, which we believe aligns our goals with the interests of our clients. Our portfolio managers average 27 years of investment industry experience, including 21 years at our company, reflecting a career commitment to our long-term approach.¹

The Capital System

The Capital System combines individual accountability with teamwork. Funds using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. An extensive global research effort is the backbone of our system.

American Funds’ superior outcomes

Equity funds have beaten their Lipper peer  indexes in 91% of 10-year periods and 98% of 20-year periods.2 Fixed income funds have helped investors achieve diversification through attention to correlation between bonds and equities.3 Fund management fees have been among the lowest in the industry.4

1 Investment industry experience as of December 31, 2020.

2 Based on Class F-2 share results for rolling calendar-year periods starting the first full calendar year after each fund's inception through December 31, 2020. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except Capital Income Builder and SMALLCAP World Fund, for which the Lipper average was used). Expenses differ for each share class, so results will vary.

3 Based on Class F-2 share results as of December 31, 2020. Thirteen of the 17 fixed income American Funds that have been in existence for the three-year period showed a three-year correlation below 0.3. Standard & Poor’s 500 Index was used as an equity market proxy. Correlation based on monthly total returns. Correlation is a statistical measure of how two securities move in relation to each other. A correlation ranges from –1 to 1. A positive correlation close to 1 implies that as one security moves, either up or down, the other security will move in “lockstep,” in the same direction. A negative correlation close to –1 indicates that the securities have moved in the opposite direction.

4 On average, our management fees were in the lowest quintile 66% of the time, based on the 20-year period ended December 31, 2020, versus comparable Lipper categories, excluding funds of funds.

The guidelines and procedures provided in the Service Center may not apply to networked accounts or accounts not directly held by American Funds. The guidelines and procedures provided also apply only to those retirement accounts or Coverdell ESAs invested in American Funds with Capital Bank and Trust Company (CB&T) as custodian.

The guidelines and procedures provided in the Service Center do not apply to plans held in our retirement plan solutions — PlanPremier, PlanPremier-TPA or RecordkeeperDirect. Information on the Service Center may change periodically and previously printed information may not be current. Please refer to capitalgroup.com for the most current information available.

Financial professionals should always contact their back office to determine if there are any restrictions on the use of American Funds products, tools, services, websites and literature.

 

You could lose money by investing in American Funds U.S. Government Money Market Fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will at any time.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

The value of fixed income securities may be affected by changing interest rates and changes in credit ratings of the securities.

Visit the SEC website for the American Funds U.S. Government Money Market Fund's most recent filings.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

American Funds Distributors, Inc., member FINRA.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.