Wholesaler compensation

DWS Distributors, Inc., has adopted an Incentive Plan (Plan) covering wholesalers that are  Wealth Consultants. Generally, DWS Wealth Consultants market shares of the DWS funds to financial representatives, who in turn may recommend that investors purchase shares of a DWS fund. The Plan is an incentive program that combines monthly and quartertly incentive components - based on achieving certain sales and other performance metrics. Under the Plan, DWS Wealth Consultants will receive a monetary monthly incentive based on the amount of sales generated from their marketing of the funds, and that incentive will differ depending on the product tier of the fund. Each fund is assigned to one of three product tiers - taking into consideration, among other things, the following criteria, where applicable:

  • a fund’s consistency with DWS branding and long-term strategy;
  • a fund’s competitive performance;
  • a fund’s Morningstar rating;
  • the length of time the Fund’s Portfolio Managers have managed the Fund/Strategy;
  • market size for the fund tier;
  • a fund’s size, including sales and redemptions of the Fund’s shares.

This information and other factors are discussed with senior representatives from various groups within our division, who review on a regular basis the funds assigned to each product tier described above, and may make changes to those assignments periodically. No one factor, whether positive or negative, determines a fund’s placement in a given product tier; all these factors together are considered, and the designation of funds in a particular tier represents management’s judgment based on the above criteria. In addition, management may consider a fund’s profile over the course of several review periods before making a change to its tier assignment. DWS Wealth Consultants receive the highest compensation for Tier 1 funds, successively less for Tier 2 funds and successively less for Tier 3 funds.
The level of compensation among these product tiers may differ significantly.

In the normal course of business, DWS will from time to time introduce new funds into the DWS family of funds. As a general rule, new funds will be assigned to the product tier that is most appropriate to the type of fund at the time of its launch based on the criteria described above. As described above, the fund tier assignments are reviewed periodically and are subject to change.

The prospect of receiving, or the receipt of, additional compensation by a DWS Wealth Consultant under the Plan may provide an incentive to favor marketing funds in higher payout tiers over funds in lower payout tiers. The Plan, however, will not change the price that investors pay for shares of a fund. The DWS Compliance Department monitors DWS Wealth Consultant sales and other activity in an effort to detect unusual activity in the context of the compensation structure under the Plan. However, investors may wish to take the Plan and the product tier of the fund into account when considering purchasing a fund or evaluating any recommendations relating to fund shares.

Product tiering structure