dividend sustainability portfolio, series 2016-3 a hartford … · 2016. 8. 5. · dividend...

A unit investment trust holding anunmanaged portfolio of stocks of

primarily domestic companiesseeking above average total return

through dividend income

Prospectus

August 5, 2016

As with any investment, the Securities andExchange Commission has not approved ordisapproved of these securities or passedupon the adequacy or accuracy of thisprospectus. Any contrary representation is acriminal offense.

Dividend Sustainability Portfolio, Series 2016-3 -A Hartford Investment Management Company(“HIMCO”) Portfolio

(Advisors Disciplined Trust 1702)

IINNVVEESSTTMMEENNTT OOBBJJEECCTTIIVVEE

The trust seeks to provide above average totalreturn through dividend income. There is noassurance the trust will achieve its objective.

PPRRIINNCCIIPPAALL IINNVVEESSTTMMEENNTT SSTTRRAATTEEGGYY

The trust seeks to achieve its objective byinvesting in a portfolio of common stocks of pri-marily domestic companies. The portfolio wasselected by Hartford Investment ManagementCompany (“HIMCO”).

HIMCO sought primarily to select highquality U.S. stocks with above average dividendyields and the potential to increase dividend pay-ments by considering a broad universe of compa-nies within the Russell 3000® Index for inclusionin the trust’s portfolio. HIMCO used a struc-tured quantitative approach combined with fun-damental oversight. HIMCO’s quantitativeapproach sought to identify companies withinvarious industry sectors possessing attractive fun-damentals, such as solid balance sheets, high qual-ity earnings and attractive growth prospects.HIMCO reviewed final selections for the trust’sportfolio to assess the impact of recent events(including management issues, legal proceedingsand future mergers or acquisitions) on eachstock’s prospects.

PPRRIINNCCIIPPAALL RRIISSKKSS

As with all investments, you can lose moneyby investing in this trust. The trust also mightnot perform as well as you expect. This can hap-pen for reasons such as these:

• SSeeccuurriittyy pprriicceess wwiillll fflluuccttuuaattee. The value ofyour investment may fall over time.

• TThhee iissssuueerr ooff aa sseeccuurriittyy mmaayy bbee uunnwwiilllliinngg oorruunnaabbllee ttoo mmaakkee ddiivviiddeenndd ppaayymmeennttss iinn tthheeffuuttuurree.. This may reduce the level of divi-dends the trust receives which would reduceyour income and cause the value of yourunits to fall.

• TThhee ffiinnaanncciiaall ccoonnddiittiioonn ooff aann iissssuueerr mmaayywwoorrsseenn oorr iittss ccrreeddiitt rraattiinnggss mmaayy ddrroopp,, rreessuulltt--iinngg iinn aa rreedduuccttiioonn iinn tthhee vvaalluuee ooff yyoouurr uunniittss..This may occur at any point in time, includ-ing during the primary offering period.

• TThhee ttrruusstt iinnvveessttss iinn sseeccuurriittiieess sseelleecctteedd bbyyHHIIMMCCOO.. In the event that HIMCO incor-rectly assesses an issuer’s prospectus for growthor if HIMCO’s judgment about how otherinvestors will value an issuer’s growth is wrong,then the price of an issuer’s stock may decreaseor not increase to the level anticipated.

• TThhee ttrruusstt mmaayy iinnvveesstt iinn sseeccuurriittiieess ooff ssmmaallllaanndd mmiidd--ssiizzee ccoommppaanniieess.. These securities areoften more volatile and have lower tradingvolumes than securities of larger companies.Small and mid-size companies may have lim-ited products or financial resources, manage-ment inexperience and less publicly availableinformation.

• WWee** ddoo nnoott aaccttiivveellyy mmaannaaggee tthhee ppoorrttffoolliioo..Except in limited circumstances, the trust willgenerally hold, and continue to buy, shares ofthe same securities even if their market valuedeclines.

2 Investment Summary

INVESTMENT SUMMARY

* “AAM,” “we” and related terms mean Advisors Asset Management,Inc., the trust sponsor, unless the context clearly suggests otherwise.

WWHHOO SSHHOOUULLDD IINNVVEESSTT

You should consider this investment if you want:

• to own a portfolio of stocks of primarilydomestic companies.

• the potential for above average total returnthrough dividend income.

You should not consider this investment if you:

• are uncomfortable with the risks of anunmanaged investment in common stocks.

• seek capital appreciation or capital preserva-tion.

FFEEEESS AANNDD EEXXPPEENNSSEESS

The amounts below are estimates of the direct andindirect expenses that you may incur based on a $10unit price. Actual expenses may vary.

AAss aa %% AAmmoouunnttooff $$11,,000000 ppeerr 110000

SSaalleess FFeeee IInnvveesstteedd UUnniittss

Initial sales fee 1.00% $10.00Deferred sales fee 2.45 24.50Creation & development fee 0.50 5.00Maximum sales fee 3.95% $39.50

OOrrggaanniizzaattiioonn CCoossttss 0.38% $3.80

AAss aa %% AAmmoouunnttAAnnnnuuaall ooff NNeett ppeerr 110000ooppeerraattiinngg eexxppeennsseess AAsssseettss UUnniittss

Trustee fee & expenses 0.22% $2.12Supervisory, evaluation

and administration fees 0.10 1.00Total 0.32% $3.12

The initial sales fee is the difference between thetotal sales fee (maximum of 3.95% of the unitoffering price) and the sum of the remaining deferredsales fee and the total creation and development fee.The deferred sales fee is fixed at $0.245 per unitand is paid in three monthly installments beginningNovember 20, 2016. The creation and developmentfee is fixed at $0.05 per unit and is paid at the end ofthe initial offering period (anticipated to be approxi-mately three months).

EEXXAAMMPPLLEE

This example helps you compare the cost of thistrust with other unit trusts and mutual funds. In theexample we assume that the expenses do not changeand that the trust’s annual return is 5%. Your actualreturns and expenses will vary. Based on these assump-tions, you would pay these expenses for every $10,000you invest in the trust:

1 year $4642 years (life of trust) $497

These amounts are the same regardless of whetheryou sell your investment at the end of a period or con-tinue to hold your investment.

ESSENTIAL INFORMATION

Unit price at inception $10.0000

Inception date August 5, 2016Termination date August 7, 2018

Estimated net annualdistributions*First year $0.2323 per unitSecond year $0.2298 per unit

Distribution dates 25th day of each monthRecord dates 10th day of each month

CUSIP NumbersStandard Accounts

Cash distributions 00775A100Reinvest distributions 00775A118

Fee Based AccountsCash distributions 00775A126Reinvest distributions 00775A134

Ticker Symbol DVSUHX

Minimum investment $1,000/100 units

Tax Structure Regulated Investment Company

* As of August 4, 2016 and may vary thereafter.

Investment Summary 3

Dividend Sustainability Portfolio, Series 2016-3 - A Hartford InvestmentManagement Company (“HIMCO”) Portfolio(Advisors Disciplined Trust 1702)PortfolioAs of the trust inception date, August 5, 2016

COMMON STOCKS — 100.00%

Consumer Discretionary - 13.32%

109 EAT Brinker International, Inc. 3.33% $45.43 $4,95232 CBRL Cracker Barrel Old Country Store, Inc. 3.36 155.95 4,99081 VFC V.F. Corporation 3.32 60.88 4,93196 WSM Williams-Sonoma, Inc. 3.31 51.36 4,931

Consumer Staples - 10.04%

114 ADM Archer-Daniels-Midland Company 3.35 43.74 4,986137 HRL Hormel Foods Corporation 3.34 36.29 4,972

46 PEP PepsiCo, Inc. 3.35 108.42 4,987

Energy - 6.68%

57 XOM Exxon Mobil Corporation 3.35 87.48 4,986122 MPC Marathon Petroleum Corporation 3.33 40.63 4,957

Financials - 16.61%

132 EV Eaton Vance Corporation 3.34 37.62 4,966171 IVZ Invesco Limited (4) 3.32 28.92 4,945

64 NHI National Health Investors, Inc. 3.36 78.01 4,993108 PFG Principal Financial Group, Inc. 3.33 45.88 4,955

21 PSA Public Storage 3.26 230.55 4,842

Health Care - 13.38%

29 AMGN Amgen, Inc. 3.37 172.67 5,00840 JNJ Johnson & Johnson 3.33 123.86 4,95457 MDT Medtronic PLC (4) 3.33 86.76 4,94572 RMD ResMed, Inc. 3.35 69.10 4,975

(Continued)

Percentage of Market Cost ofNumber Ticker Aggregate Offering Value per Securitiesof Shares Symbol Issuer(1) Price Share(1) to Trust(2)

4 Investment Summary

Dividend Sustainability Portfolio, Series 2016-3 - A Hartford InvestmentManagement Company (“HIMCO”) Portfolio(Advisors Disciplined Trust 1702)Portfolio (Continued)As of the trust inception date, August 5, 2016

Industrials - 10.03%

117 FAST Fastenal Company 3.34% $42.40 $4,96180 LECO Lincoln Electric Holdings, Inc. 3.34 62.10 4,96869 MSM MSC Industrial Direct Company, Inc. 3.35 72.22 4,983

Information Technology - 19.94%

78 ADI Analog Devices, Inc. 3.32 63.34 4,94156 ADP Automatic Data Processing, Inc. 3.33 88.41 4,95184 LLTC Linear Technology Corporation 3.34 59.12 4,96684 PAYX Paychex, Inc. 3.31 58.64 4,92671 TXN Texas Instruments, Inc. 3.32 69.61 4,94296 XLNX Xilinx, Inc. 3.32 51.43 4,937

Materials - 3.33%

97 SON Sonoco Products Company 3.33 50.98 4,945

Telecommunication Services - 3.33%

115 T AT&T, Inc. 3.33 43.08 4,954

Utilities - 3.34%

112 CMS CMS Energy Corporation 3.34 44.32 4,964

100.00% $148,713

Notes to Portfolio(1) Securities are represented by contracts to purchase securities. The value of each security is based on the most recent closing sale price of each

security as of the close of regular trading on the New York Stock Exchange on the business day prior to the trust’s inception date. In accordancewith Accounting Standards Codification 820, “Fair Value Measurements”, the trust’s investments are classified as Level 1, which refers to securityprices determined using quoted prices in active markets for identical securities.

(2) The cost of the securities to the sponsor and the sponsor’s profit or (loss) (which is the difference between the cost of the securities to the spon-sor and the cost of the securities to the trust) are $148,713 and $0, respectively.

(3) This is a non-income producing security.

(4) This is a security issued by a foreign company that trades on a U.S. securities exchange.

Common stocks comprise 100.00% of the investments in the trust, broken down by country of organization as set forth below:

Bermuda 3.32% Ireland 3.33%United States 93.35%

Investment Summary 5

Percentage of Market Cost ofNumber Ticker Aggregate Offering Value per Securitiesof Shares Symbol Issuer(1) Price Share(1) to Trust(2)

HHOOWW TTOO BBUUYY UUNNIITTSS

You can buy units of the trust on any busi-ness day the New York Stock Exchange is open bycontacting your financial professional. Unitprices are available daily on the Internet atwwwwww..AAAAMMlliivvee..ccoomm.. The public offering price ofunits includes:

• the net asset value per unit plus

• organization costs plus

• the sales fee.

The “net asset value per unit” is the value ofthe securities, cash and other assets in the trustreduced by the liabilities of the trust divided bythe total units outstanding. We often refer to thepublic offering price of units as the “offer price”or “purchase price.” The offer price will be effec-tive for all orders received prior to the close ofregular trading on the New York Stock Exchange(normally 4:00 p.m. Eastern time). If we receiveyour order prior to the close of regular trading onthe New York Stock Exchange or authorizedfinancial professionals receive your order prior tothat time and properly transmit the order to us bythe time that we designate, then you will receivethe price computed on the date of receipt. If wereceive your order after the close of regular trad-ing on the New York Stock Exchange, if author-ized financial professionals receive your order afterthat time or if orders are received by such personsand are not transmitted to us by the time that wedesignate, then you will receive the price comput-ed on the date of the next determined offer priceprovided that your order is received in a timelymanner on that date. It is the responsibility of theauthorized financial professional to transmit theorders that they receive to us in a timely manner.

Certain broker-dealers may charge a transactionor other fee for processing unit purchase orders.

VVaalluuee ooff tthhee SSeeccuurriittiieess.. We determine thevalue of the securities as of the close of regulartrading on the New York Stock Exchange on eachday that exchange is open. We generally deter-mine the value of securities using the last saleprice for securities traded on a national securitiesexchange. For this purpose, the trustee providesus closing prices from a reporting serviceapproved by us. In some cases we will price asecurity based on the last asked or bid price in theover-the-counter market or by using other recog-nized pricing methods. We will only do this if asecurity is not principally traded on a nationalsecurities exchange or if the market quotes areunavailable or inappropriate.

We determined the initial prices of the securi-ties shown under “Portfolio” in this prospectus asdescribed above at the close of regular trading onthe New York Stock Exchange on the businessday before the date of this prospectus. On thefirst day we sell units we will compute the unitprice as of the close of regular trading on theNew York Stock Exchange or the time the regis-tration statement filed with the Securities andExchange Commission becomes effective, if later.

OOrrggaanniizzaattiioonn CCoossttss.. During the initial offeringperiod, part of the value of the securities representsan amount that will pay the costs of creating yourtrust. These costs include the costs of preparingthe registration statement and legal documents,federal and state registration fees, HIMCO’s secu-rity selection fee, the initial fees and expenses ofthe trustee and the initial audit. Your trust willsell securities to reimburse us for these costs at theend of the initial offering period or after sixmonths, if earlier. The value of your units willdecline when the trust pays these costs.

UNDERSTANDING YOUR INVESTMENT

6 Understanding Your Investment

TTrraannssaaccttiioonnaall SSaalleess FFeeee.. You pay a fee inconnection with purchasing units. We refer tothis fee as the “transactional sales fee.” Thetransactional sales fee has both an initial and adeferred component and equals 3.45% of thepublic offering price per unit based on a $10public offering price per unit. This percentageamount of the transactional sales fee is based onthe unit price on the trust’s inception date. Thetransactional sales fee equals the differencebetween the total sales fee and the creation anddevelopment fee. As a result, the percentage anddollar amount of the transactional sales fee willvary as the public offering price per unit varies.The transactional sales fee does not include thecreation and development fee which is describedunder “Fees and Expenses.”

The maximum sales fee equals 3.95% of thepublic offering price per unit at the time of pur-chase. You pay the initial sales fee at the time youbuy units. The initial sales fee is the differencebetween the total sales fee percentage (maximumof 3.95% of the public offering price per unit)and the sum of the remaining fixed dollardeferred sales fee and the total fixed dollar cre-ation and development fee. The initial sales feewill be approximately 1.00% of the public offer-ing price per unit depending on the public offer-ing price per unit. The deferred sales fee is fixedat $0.245 per unit. Your trust pays the deferredsales fee in equal monthly installments asdescribed on page 3. If you redeem or sell yourunits prior to collection of the total deferred salesfee, you will pay any remaining deferred sales feeupon redemption or sale of your units.

If you purchase units after the last deferredsales fee payment has been assessed, the secondarymarket sales fee is equal to 3.95% of the publicoffering price and does not include deferred pay-ments (i.e., unitholders who buy in the secondary

market after collection of the deferred sales feesare not charged deferred sales fees).

MMiinniimmuumm PPuurrcchhaassee.. The minimum amountyou can purchase of the trust appears on page 3under “Essential Information”, but such amountsmay vary depending on your selling firm.

RReedduucciinngg YYoouurr SSaalleess FFeeee. We offer a variety ofways for you to reduce the fee you pay. It is yourfinancial professional’s responsibility to alert us ofany discount when you order units. Except asexpressly provided herein, you may not combinediscounts. Since the deferred sales fee and thecreation and development fee are fixed dollaramounts per unit, your trust must charge thesefees per unit regardless of any discounts.However, if you are eligible to receive a discountsuch that your total sales fee is less than the fixeddollar amounts of the deferred sales fee and thecreation and development fee, we will credit youthe difference between your total sales fee andthese fixed dollar fees at the time you buy units.

Large Purchases. You can reduce your sales feeby increasing the size of your investment:

If you purchase: Your fee will be:

Less than $50,000 3.95%$50,000 - $99,999 3.70$100,000 - $249,999 3.45$250,000 - $499,999 3.10$500,000 - $999,999 2.95$1,000,000 or more 2.45

We apply these fees as a percent of the publicoffering price per unit at the time of purchase.The breakpoints will be adjusted to take into con-sideration purchase orders stated in dollars whichcannot be completely fulfilled due to the require-ments that only whole units be issued.

Understanding Your Investment 7

You aggregate initial offering period unitorders submitted by the same person for units ofany of the trusts we sponsor on any single dayfrom any one broker-dealer to qualify for a pur-chase level. If you purchase initial offering periodunits that qualify for the fee account orrollover/exchange discount described below andalso purchase additional initial offering periodunits on a single day from the same broker-dealerthat do not qualify for the fee account orrollover/exchange discount, you aggregate all ini-tial offering period units purchased for purposes ofdetermining the applicable breakpoint level in thetable above on the additional units, but such addi-tional units will not qualify for the fee account orrollover/exchange discount described below.Secondary market unit purchases are not aggregat-ed with initial offering period unit purchases forpurposes of determining the applicable breakpointlevel. You can also include these orders as yourown for purposes of this aggregation:

• orders submitted by your spouse or chil-dren (including step-children) under 21years of age living in the same householdand

• orders submitted by your trust estate orfiduciary accounts.

The discounts described above apply only toinitial offering period purchases.

Fee Accounts. Investors may purchase unitsthrough registered investment advisers, certifiedfinancial planners or registered broker-dealers whoin each case either charge investor accounts (“FeeAccounts”) periodic fees for brokerage services,financial planning, investment advisory or assetmanagement services, or provide such services inconnection with an investment account for whicha comprehensive “wrap fee” charge (“Wrap Fee”) isimposed. You should consult your financial advi-

sor to determine whether you can benefit fromthese accounts. To purchase units in these FeeAccounts, your financial advisor must purchaseunits designated with one of the Fee AccountCUSIP numbers, if available. Please contact yourfinancial advisor for more information. If units ofthe trust are purchased for a Fee Account and theunits are subject to a Wrap Fee in such FeeAccount (i.e., the trust is “Wrap Fee Eligible”)then investors may be eligible to purchase units ofthe trust in these Fee Accounts that are not subjectto the transactional sales fee but will be subject tothe creation and development fee that is retainedby the sponsor. For example, this table illustratesthe sales fee you will pay as a percentage of the ini-tial $10 public offering price per unit (the percent-age will vary with the unit price).

Initial sales fee 0.00%Deferred sales fee 0.00%

Transactional sales fee 0.00%Creation and development fee 0.50%

Total sales fee 0.50%

This discount applies only during the initialoffering period. Certain Fee Account investorsmay be assessed transaction or other fees on thepurchase and/or redemption of units by their bro-ker-dealer or other processing organizations forproviding certain transaction or account activities.We reserve the right to limit or deny purchases ofunits in Fee Accounts by investors or selling firmswhose frequent trading activity is determined tobe detrimental to the trust.

Employees. We waive the transactional salesfee for purchases made by officers, directors andemployees (and immediate family members) of thesponsor and its affiliates. These purchases are notsubject to the transactional sales fee but will besubject to the creation and development fee. Wealso waive a portion of the sales fee for purchases


made by officers, directors and employees (andimmediate family members) of selling firms.These purchases are made at the public offeringprice per unit less the applicable regular dealerconcession. Immediate family members for thepurposes of this section include your spouse, chil-dren (including step-children) under the age of 21living in the same household, and parents (includ-ing step-parents). These discounts apply to initialoffering period and secondary market purchases.All employee discounts are subject to the policiesof the related selling firm, including but not limit-ed to, householding policies or limitations. Onlyofficers, directors and employees (and their imme-diate family members) of selling firms that allowsuch persons to participate in this employee dis-count program are eligible for the discount.

Rollover/Exchange Option. We waive a por-tion of the sales fee on units of the trust offeredin this prospectus if you buy your units withredemption or termination proceeds from anyunit investment trust (regardless of sponsor). Thediscounted public offering price per unit for thesetransactions is equal to the regular public offeringprice per unit less 1.00%. However, if you investredemption or termination proceeds of $500,000or more in units of the trust, the maximum salesfee on your units will be limited to the maximumsales fee for the applicable amount invested in thetable under “Large Purchases” above. To qualifyfor this discount, the termination or redemptionproceeds used to purchase units of the trustoffered in this prospectus must be derived from atransaction that occurred within 30 calendar daysof your purchase of units of the trust offered inthis prospectus. In addition, the discount willonly be available for investors that utilize thesame broker-dealer (or a different broker-dealerwith appropriate notification) for both the unitpurchase and the transaction resulting in thereceipt of the termination or redemption proceeds

used for the unit purchase. You may be requiredto provide appropriate documentation or otherinformation to your broker-dealer to evidenceyour eligibility for this sales fee discount.

Please note that if you purchase units of thetrust in this manner using redemption proceedsfrom trusts which assess the amount of anyremaining deferred sales fee at redemption, youshould be aware that any deferred sales feeremaining on these units will be deducted fromthose redemption proceeds. These discountsapply only to initial offering period purchases.

Dividend Reinvestment Plan. We do notcharge any sales fee when you reinvest distribu-tions from your trust into additional units of thetrust. This sales fee discount applies to initialoffering period and secondary market purchases.Since the deferred sales fee and the creation anddevelopment fee are fixed dollar amounts per unit,your trust must charge these fees per unit regard-less of this discount. If you elect the distributionreinvestment plan, we will credit you with addi-tional units with a dollar value sufficient to coverthe amount of any remaining deferred sales fee orcreation and development fee that will be collectedon such units at the time of reinvestment. Thedollar value of these units will fluctuate over time.

RReettiirreemmeenntt AAccccoouunnttss.. The portfolio may besuitable for purchase in tax-advantaged retirementaccounts. You should contact your financial pro-fessional about the accounts offered and any addi-tional fees imposed.

HHOOWW TTOO SSEELLLL YYOOUURR UUNNIITTSS

You can sell or redeem your units on anybusiness day the New York Stock Exchange isopen by contacting your financial professional.Unit prices are available daily on the Internet at


wwwwww..AAAAMMlliivvee..ccoomm or through your financialprofessional. The sale and redemption price ofunits is equal to the net asset value per unit, pro-vided that you will not pay any remaining cre-ation and development fee or organization costs ifyou sell or redeem units during the initial offeringperiod. The sale and redemption price is some-times referred to as the “liquidation price.” Youpay any remaining deferred sales fee when you sellor redeem your units. Certain broker-dealers maycharge a transaction or other fee for processingunit redemption or sale requests.

SSeelllliinngg UUnniittss. We may maintain a secondarymarket for units. This means that if you want tosell your units, we may buy them at the currentnet asset value, provided that you will not pay anyremaining creation and development fee or organ-ization costs if you sell units during the initialoffering period. We may then resell the units toother investors at the public offering price orredeem them for the redemption price. Our sec-ondary market repurchase price is the same as theredemption price. Certain broker-dealers mightalso maintain a secondary market in units. Youshould contact your financial professional for cur-rent repurchase prices to determine the best priceavailable. We may discontinue our secondarymarket at any time without notice. Even if we donot make a market, you will be able to redeemyour units with the trustee on any business dayfor the current redemption price.

RReeddeeeemmiinngg UUnniittss. You may also redeem yourunits directly with the trustee, The Bank of NewYork Mellon, on any day the New York StockExchange is open. The redemption price thatyou will receive for units is equal to the net assetvalue per unit, provided that you will not payany remaining creation and development fee ororganization costs if you redeem units during theinitial offering period. You will pay any remain-

ing deferred sales fee at the time you redeemunits. You will receive the net asset value for aparticular day if the trustee receives your com-pleted redemption request prior to the close ofregular trading on the New York Stock Exchange.Redemption requests received by authorizedfinancial professionals prior to the close of regu-lar trading on the New York Stock Exchange thatare properly transmitted to the trustee by thetime designated by the trustee, are priced basedon the date of receipt. Redemption requestsreceived by the trustee after the close of regulartrading on the New York Stock Exchange,redemption requests received by authorizedfinancial professionals after that time or redemp-tion requests received by such persons that arenot transmitted to the trustee until after the timedesignated by the trustee, are priced based on thedate of the next determined redemption priceprovided they are received in a timely manner bythe trustee on such date. It is the responsibilityof authorized financial professionals to transmitredemption requests received by them to thetrustee so they will be received in a timely man-ner. If your request is received after that time oris incomplete in any way, you will receive thenext net asset value computed after the trusteereceives your completed request.

If you redeem your units, the trustee will gen-erally send you a payment for your units no laterthan seven days after it receives all necessary doc-umentation (this will usually only take three busi-ness days). The only time the trustee can delayyour payment is if the New York Stock Exchangeis closed (other than weekends or holidays), theSecurities and Exchange Commission determinesthat trading on that exchange is restricted or anemergency exists making sale or evaluation of thesecurities not reasonably practicable, and for anyother period that the Securities and ExchangeCommission permits.


You can request an in-kind distribution of thesecurities underlying your units if you tender atleast 2,500 units for redemption (or such otheramount as required by your financial profession-al’s firm). This option is generally available onlyfor securities traded and held in the United States.The trustee will make any in-kind distribution ofsecurities by distributing applicable securities inbook entry form to the account of your financialprofessional at Depository Trust Company. Youwill receive whole shares of the applicable securi-ties and cash equal to any fractional shares. Youmay not request this option in the last 30 days ofyour trust’s life. We may discontinue this optionat any time without notice.

EExxcchhaannggee OOppttiioonn. You may be able toexchange your units for units of our other unittrusts at a reduced sales fee. You can contactyour financial professional for more informationabout trusts currently available for exchanges.Before you exchange units, you should read theprospectus carefully and understand the risks andfees. You should then discuss this option withyour financial professional to determine whetheryour investment goals have changed, whethercurrent trusts suit you and to discuss tax conse-quences. We may discontinue this option uponsixty days notice.

DDIISSTTRRIIBBUUTTIIOONNSS

MMoonntthhllyy DDiissttrriibbuuttiioonnss. Your trust generallypays distributions of its net investment income(pro-rated on an annual basis) along with anyexcess capital on each monthly distribution date tounitholders of record on the preceding recorddate. The record and distribution dates are shownunder “Essential Information” in the “InvestmentSummary” section of this prospectus. In somecases, your trust might pay a special distribution ifit holds an excessive amount of cash pending dis-

tribution. For example, this could happen as aresult of a merger or similar transaction involvinga company whose stock is in your portfolio. Thetrust will also generally make required distribu-tions or distributions to avoid imposition of tax atthe end of each year because it is structured as a“regulated investment company” for federal taxpurposes. The amount of your distributions willvary from time to time as companies change theirdividends or trust expenses change.

When the trust receives dividends or otherincome payments from a portfolio security, thetrustee credits the dividends or other income pay-ments to the trust’s accounts. In an effort tomake relatively regular income distributions, thetrust’s monthly income distribution is equal toone-twelfth of the estimated net annual income tobe received by the trust after deduction of trustoperating expenses. Because the trust does notreceive dividends from the portfolio securities at aconstant rate throughout the year, the trust’sincome distributions to unitholders may be moreor less than the amount credited to the trustaccounts as of the record date. For the purpose ofminimizing fluctuation in income distributions,the trustee is authorized to advance such amountsas may be necessary to provide income distribu-tions of approximately equal amounts. Thetrustee will be reimbursed, without interest, forany such advances from available income receivedby the trust on the ensuing record date.

EEssttiimmaatteedd AAnnnnuuaall DDiissttrriibbuuttiioonnss.. The estimat-ed net annual distributions are shown under“Essential Information” in the “InvestmentSummary” section of this prospectus. We gener-ally base the estimate of the income the trust mayreceive on annualizing the most recent ordinarydividend declared by an issuer (or adding themost recent interim and final dividends declaredfor certain foreign issuers) or on scheduled


income payments. However, dividend conven-tions for certain companies and/or certain coun-tries differ from those typically used in the UnitedStates and in certain instances, dividends paid ordeclared over several years or other periods wereused to estimate annual distributions. Due to thisand various other factors, actual income paymentsreceived by the trust will most likely differ fromthe most recent annualized dividends or sched-uled income payments. The actual net annualdistributions you will receive will vary withchanges in the trust’s fees and expenses, in incomepayments received and with the sale of securities.

RReeppoorrttss. The trustee or your financial profes-sional will make available to you a statementshowing income and other receipts of your trustfor each distribution. Each year the trustee willalso provide an annual report on your trust’sactivity and certain tax information. You canrequest copies of security evaluations to enableyou to complete your tax forms and auditedfinancial statements for your trust, if available.

IINNVVEESSTTMMEENNTT RRIISSKKSS

All investments involve risk. This sectiondescribes the main risks that can impact the valueof the securities in your portfolio. You shouldunderstand these risks before you invest. If thevalue of the securities falls, the value of your unitswill also fall. We cannot guarantee that your trustwill achieve its objective or that your investmentreturn will be positive over any period.

MMaarrkkeett RRiisskk.. Market risk is the risk that thevalue of the securities in your trust will fluctuate.This could cause the value of your units to fallbelow your original purchase price. Market valuefluctuates in response to various factors. Thesecan include changes in interest rates, inflation, thefinancial condition of a security’s issuer, percep-

tions of the issuer, or ratings on a security. Eventhough we supervise your portfolio, you shouldremember that we do not manage your portfolio.Your trust will not sell a security solely because themarket value falls as is possible in a managed fund.

DDiivviiddeenndd PPaayymmeenntt RRiisskk. Dividend paymentrisk is the risk that an issuer of a security isunwilling or unable to pay income on a security.Stocks represent ownership interests in the issuersand are not obligations of the issuers. Commonstockholders have a right to receive dividends onlyafter the company has provided for payment of itscreditors, bondholders and preferred stockholders.Common stocks do not assure dividend pay-ments. Dividends are paid only when declared byan issuer’s board of directors and the amount ofany dividend may vary over time.

SSeeccttoorr CCoonncceennttrraattiioonn RRiisskk.. Sector concentrationrisk is the risk that the value of your trust is moresusceptible to fluctuations based on factors thatimpact a particular sector because the portfolioconcentrates in securities issued by companieswithin that sector. A portfolio “concentrates” in asector when securities in a particular sector makeup 25% or more of the portfolio. Refer to the“Principal Risks” in the “Investment Summary”section in this prospectus for sector concentrations.

SSmmaallll aanndd MMiidd--SSiizzee CCoommppaanniieess.. The trust mayinvest in securities issued by small and mid-sizecompanies. The share prices of these companiesare often more volatile than those of larger compa-nies as a result of several factors common to manysuch issuers, including limited trading volumes,products or financial resources, management inex-perience and less publicly available information.

IInnvveessttmmeenntt PPrroocceessss RRiisskk.. The trust invests insecurities selected by HIMCO. In the event thatHIMCO incorrectly assesses an issuer’s prospectus


for growth or if HIMCO’s judgment about howother investors will value an issuer’s growth iswrong, then the price of an issuer’s stock maydecrease or not increase to the level anticipated.

FFoorreeiiggnn IIssssuueerr RRiisskk.. An investment in securi-ties of foreign issuers involves certain risks that aredifferent in some respects from an investment insecurities of domestic issuers. These include risksassociated with future political and economicdevelopments, international trade conditions, for-eign withholding taxes, liquidity concerns, curren-cy fluctuations, volatility, restrictions on foreigninvestments and exchange of securities, potentialfor expropriation of assets, confiscatory taxation,difficulty in obtaining or enforcing a court judg-ment, potential inability to collect when a compa-ny goes bankrupt and economic, political orsocial instability. Moreover, individual foreigneconomies may differ favorably or unfavorablyfrom the U.S. economy for reasons including dif-ferences in growth of gross domestic product,rates of inflation, capital reinvestment, resources,self-sufficiency and balance of payments positions.There may be less publicly available informationabout a foreign issuer than is available from adomestic issuer as a result of different accounting,auditing and financial reporting standards. Someforeign markets are less liquid than U.S. marketswhich could cause securities to be bought at ahigher price or sold at a lower price than wouldbe the case in a highly liquid market.

Securities of certain foreign issuers may bedenominated or quoted in currencies other thanthe U.S. dollar. Foreign issuers also make pay-ments and conduct business in foreign currencies.Many foreign currencies have fluctuated widely invalue against the U.S. dollar for various economicand political reasons. Changes in foreign curren-cy exchange rates may affect the value of foreignsecurities and income payments. Generally, when

the U.S. dollar rises in value against a foreign cur-rency, a security denominated in that currencyloses value because the currency is worth fewerU.S. dollars. Conversely, when the U.S. dollardecreases in value against a foreign currency, asecurity denominated in that currency gains valuebecause the currency is worth more U.S. dollars.The U.S. dollar value of income payments on for-eign securities will fluctuate similarly withchanges in foreign currency values.

Certain foreign securities may be held in theform of American Depositary Receipts (“ADRs”),Global Depositary Receipts (“GDRs”), or othersimilar receipts. Depositary receipts representreceipts for foreign securities deposited with acustodian (which may include the trustee of thetrust). Depository receipts may not be denomi-nated in the same currency as the securities intowhich they may be converted. ADRs typicallytrade in the U.S. in U.S. dollars and are registeredwith the Securities and Exchange Commission.GDRs are similar to ADRs, but GDRs typicallytrade outside of the U.S. and outside of the coun-try of the issuer in the currency of the countrywhere the GDR trades. Depositary receipts gen-erally involve most of the same types of risks asforeign securities held directly but typically alsoinvolve additional expenses associated with thecost of the custodian’s services. Some depositaryreceipts may experience less liquidity than theunderlying securities traded in their home market.Certain depositary receipts are unsponsored (i.e.issued without the participation or involvementof the issuer of the underlying security). Theissuers of unsponsored depositary receipts are notobligated to disclose information that may beconsidered material in the U.S. Therefore, theremay be less information available regarding theseissuers which can impact the relationship betweencertain information impacting a security and themarket value of the depositary receipts.


LLeeggiissllaattiioonn//LLiittiiggaattiioonn.. From time to time,various legislative initiatives are proposed in theUnited States and abroad which may have a neg-ative impact on certain of the companies repre-sented in the trust. In addition, litigation regard-ing any of the issuers of the securities or of theindustries represented by these issuers may nega-tively impact the share prices of these securities.No one can predict what impact any pending orthreatened litigation will have on the share pricesof the securities.

LLiiqquuiiddiittyy RRiisskk.. Liquidity risk is the risk that thevalue of a security will fall if trading in the securityis limited or absent. No one can guarantee that aliquid trading market will exist for any security.

NNoo FFDDIICC GGuuaarraanntteeee.. An investment in thetrust is not a deposit of any bank and is not insuredor guaranteed by the Federal Deposit InsuranceCorporation or any other government agency.

HHOOWW TTHHEE TTRRUUSSTT WWOORRKKSS

YYoouurr TTrruusstt.. Your trust is a unit investmenttrust registered under the Investment CompanyAct of 1940. We created the trust under a trustagreement between Advisors Asset Management,Inc. (as depositor/sponsor, evaluator and supervi-sor) and The Bank of New York Mellon (astrustee). To create your trust, we deposited secu-rities with the trustee (or contracts to purchasesecurities along with an irrevocable letter of creditor other consideration to pay for the securities).In exchange, the trustee delivered units of yourtrust to us. Each unit represents an undividedinterest in the assets of your trust. These unitsremain outstanding until redeemed or until yourtrust terminates. At the close of the New YorkStock Exchange on the trust’s inception date, thenumber of units may be adjusted so that the pub-lic offering price per unit equals $10. The number

of units and fractional interest of each unit inthe trust will increase or decrease to the extent ofany adjustment.

CChhaannggiinngg YYoouurr PPoorrttffoolliioo. Your trust is not amanaged fund. Unlike a managed fund, wedesigned your portfolio to remain relatively fixed.Your trust will generally buy and sell securities:

• to pay expenses,

• to issue additional units or redeem units,

• in limited circumstances to protect thetrust,

• to make required distributions or avoidimposition of taxes on the trust, or

• as permitted by the trust agreement.

When your trust sells securities, the composi-tion and diversification of the securities in theportfolio may be altered. If a public tender offerhas been made for a security or a merger, acquisi-tion or similar transaction has been announcedaffecting a security, the trustee may either sell thesecurity or accept a tender offer if the supervisordetermines that the action is in the best interest ofunitholders. The trustee will distribute any cashproceeds to unitholders. If an offer by the issuerof any of the portfolio securities or any otherparty is made to issue new securities, or toexchange securities, for trust portfolio securities,the trustee will at the direction of the sponsor,vote for or against, or accept or reject, any offerfor new or exchanged securities or property inexchange for a trust portfolio security. If anysuch issuance, exchange or substitution occurs(regardless of any action or rejection by a trust),any securities and/or property received will bedeposited into the trust and will be promptly soldby the trustee pursuant to the sponsor’s direction,unless the sponsor advises the trustee to keep such


securities or property. If any contract for the pur-chase of securities fails, the sponsor will refundthe cash and sales fee attributable to the failedcontract to unitholders on or before the next dis-tribution date unless substantially all of the mon-eys held to cover the purchase are reinvested insubstitute securities in accordance with the trustagreement. The sponsor may direct the reinvest-ment of security sale proceeds if the sale is thedirect result of serious adverse credit factorswhich, in the opinion of the sponsor, would makeretention of the securities detrimental to the trust.In such a case, the sponsor may, but is not obli-gated to, direct the reinvestment of sale proceedsin any other securities that meet the criteria forinclusion in the trust on the trust’s inception date.The sponsor may also instruct the trustee to takeaction necessary to ensure that the portfolio con-tinues to satisfy the qualifications of a regulatedinvestment company.

We will increase the size of your trust as wesell units. When we create additional units, wewill seek to replicate the existing portfolio.When your trust buys securities, it may pay bro-kerage or other acquisition fees. You could expe-rience a dilution of your investment because ofthese fees and fluctuations in security pricesbetween the time we create units and the timeyour trust buys the securities. When your trustbuys or sells securities, we may direct that it placeorders with and pay brokerage commissions tobrokers that sell units or are affiliated with us,your trust or the trustee.

Pursuant to an exemptive order, your trustmay be able to purchase securities from othertrusts that we sponsor when we create additionalunits. Your trust may also be able to sell securitiesto other trusts that we sponsor to satisfy unitredemption, pay deferred sales charges or expenses,in connection with periodic tax compliance or in

connection with the termination of your trust.The exemption may enable each trust to eliminatecommission costs on these transactions. The pricefor those securities will be the closing price on thesale date on the exchange where the securities areprincipally traded as certified by us to the trustee.

AAmmeennddiinngg tthhee TTrruusstt AAggrreeeemmeenntt.. The sponsorand the trustee can change the trust agreementwithout your consent to correct any provisionthat may be defective or to make other provisionsthat will not materially adversely affect your inter-est (as determined by the sponsor and thetrustee). We cannot change this agreement toreduce your interest in your trust without yourconsent. Investors owning two-thirds of the unitsin your trust may vote to change this agreement.

TTeerrmmiinnaattiioonn ooff YYoouurr TTrruusstt.. Your trust willterminate on the termination date set forth under“Essential Information” in the “InvestmentSummary” section of this prospectus. The trusteemay terminate your trust early if the value of thetrust is less than 40% of the original value of thesecurities in the trust at the time of deposit. Atthis size, the expenses of your trust may create anundue burden on your investment. Investorsowning two-thirds of the units in your trust mayalso vote to terminate the trust early. The trusteewill liquidate the trust in the event that a suffi-cient number of units not yet sold to the publicare tendered for redemption so that the net worthof the trust would be reduced to less than 40% ofthe value of the securities at the time they weredeposited in the trust. If this happens, we willrefund any sales charge that you paid.

The trustee will notify you of any termina-tion and sell any remaining securities. Thetrustee will send your final distribution to youwithin a reasonable time following liquidation ofall the securities after deducting final expenses.



Your termination distribution may be less thanthe price you originally paid for your units.

TThhee SSppoonnssoorr.. The sponsor of the trust isAdvisors Asset Management, Inc. We are a bro-ker-dealer specializing in providing trading andsupport services to broker-dealers, registered rep-resentatives, investment advisers and other finan-cial professionals. Our headquarters are locatedat 18925 Base Camp Road, Monument,Colorado 80132. You can contact our unitinvestment trust division at 8100 East 22nd

Street North, Building 800, Suite 102, Wichita,Kansas 67226 or by using the contacts listed onthe back cover of this prospectus. AAM is a reg-istered broker-dealer and investment adviser, amember of the Financial Industry RegulatoryAuthority, Inc. (FINRA) and Securities InvestorProtection Corporation (SIPC) and a registrantof the Municipal Securities Rulemaking Board(MSRB). If we fail to or cannot perform ourduties as sponsor or become bankrupt, thetrustee may replace us, continue to operate yourtrust without a sponsor, or terminate your trust.

We and your trust have adopted a code ofethics requiring our employees who have access toinformation on trust transactions to report per-sonal securities transactions. The purpose of thecode is to avoid potential conflicts of interest andto prevent fraud, deception or misconduct withrespect to your trust.

The sponsor or an affiliate may use the list ofsecurities in the trust in its independent capacity(which may include acting as an investmentadviser or broker-dealer) and distribute this infor-mation to various individuals and entities. Thesponsor or an affiliate may recommend or effecttransactions in the securities. This may also havean impact on the price your trust pays for thesecurities and the price received upon unit

redemption or trust termination. The sponsormay act as agent or principal in connection withthe purchase and sale of securities, includingthose held by the trust, and may act as a specialistmarket maker in the securities. The sponsor mayalso issue reports and make recommendations onthe securities in the trust. The sponsor or anaffiliate may have participated in a public offeringof one or more of the securities in the trust. Thesponsor, an affiliate or their employees may have along or short position in these securities or relatedsecurities. An officer, director or employee of thesponsor or an affiliate may be an officer or direc-tor for the issuers of the securities.

TThhee TTrruusstteeee.. The Bank of New YorkMellon is the trustee of your trust. Its principalunit investment trust division office is located at2 Hanson Place, 12th Floor, Brooklyn, NewYork 11217. You can contact the trustee bycalling the telephone number on the back coverof this prospectus or by writing to its unitinvestment trust office. We may remove andreplace the trustee in some cases without yourconsent. The trustee may also resign by notify-ing us and investors.

PPoorrttffoolliioo CCoonnssuullttaanntt.. The portfolio consult-ant, Hartford Investment Management Company,is a registered investment adviser.

HIMCO is not an affiliate of the sponsor.HIMCO selected a list of securities to be includ-ed in the portfolio based on the criteria providedby the sponsor. HIMCO makes no representa-tions that the portfolio will achieve the invest-ment objectives or will be profitable or suitablefor any particular potential investor. The sponsordid not select the securities for the trust.

HIMCO may use the list of securities in itsindependent capacity as an investment adviser


and distribute this information to various individ-uals and entities. HIMCO may recommend toother clients or otherwise effect transactions inthe securities held by the trust. This may have anadverse effect on the prices of the securities. Thisalso may have an impact on the price the trustpays for the securities and the price received uponunit redemptions or liquidation of the securities.HIMCO also issues reports and makes recom-mendations on securities, which may include thesecurities in the trust.

Neither HIMCO nor the sponsor managesthe trust. Opinions expressed by HIMCO arenot necessarily those of the sponsor, and may notactually prove correct. HIMCO is being com-pensated for its portfolio consulting services,including selection of the trust portfolio.

HHooww WWee DDiissttrriibbuuttee UUnniittss.. We sell units tothe public through broker-dealers and otherfirms. These distribution firms each pay part ofthe sales fee when they sell units. During the ini-tial offering period, the broker-dealer concessionor agency commission for broker-dealers andother firms is as follows:

Transaction Concession orAmount: Agency Commission:

Less than $50,000 3.10%$50,000 - $99,999 2.85$100,000 - $249,999 2.60$250,000 - $499,999 2.30$500,000 - $999,999 2.20$1,000,000 or more 1.75

We apply these concessions or agency com-missions as a percent of the public offering priceper unit at the time of the transaction. The bro-ker-dealer concession or agency commission is65% of the sales fee for secondary market sales.For transactions involving unitholders of other

unit investment trusts who use their redemptionor termination proceeds to purchase units of thetrust, the broker-dealer concession or agencycommission is 2.15% of the public offering priceper unit. No broker-dealer concession or agencycommission is paid to broker-dealers, investmentadvisers or other selling firms in connection withunit sales in Fee Accounts subject to a Wrap Fee.

Broker-dealers and other firms that sell unitsof certain unit investment trusts for which AAMacts as sponsor are eligible to receive additionalcompensation for volume sales. The sponsoroffers two separate volume concession structuresfor certain trusts that are referred to as “VolumeConcession A” and “Volume Concession B.” Thetrust offered in this prospectus is a VolumeConcession A trust. Broker-dealers and otherfirms that sell units of any Volume Concession Atrust are eligible to receive the additional compen-sation described below. Such payments will be inaddition to the regular concessions paid to firmsas set forth in the applicable trust’s prospectus.The additional concession is based on total initialoffering period sales of all Volume Concession Atrusts during a calendar quarter as set forth in thefollowing table:

Initial Offering Period Sales VolumeDuring Calendar Quarter Concession

Less than $10,000,000 0.000%$10,000,000 but less than $25,000,000 0.050$25,000,000 but less than $50,000,000 0.100$50,000,000 but less than $75,000,000 0.110$75,000,000 but less than $100,000,000 0.120$100,000,000 but less than $250,000,000 0.125$250,000,000 but less than $500,000,000 0.135$500,000,000 or more 0.150

This volume concession will be paid on unitsof all Volume Concession A trusts sold in the ini-tial offering period, except as described below.


For a trust to be eligible for this additionalVolume Concession A compensation for calendarquarter sales, the trust’s prospectus must includedisclosure related to this additional VolumeConcession A compensation; a trust is not eligiblefor this additional Volume Concession A compen-sation if the prospectus for such trust does notinclude disclosure related to this additionalVolume Concession A compensation. Broker-dealer firms will not receive additional compensa-tion unless they sell at least $10.0 million of unitsof Volume Concession A trusts during a calendarquarter. For example, if a firm sells $9.5 millionof units of Volume Concession A trusts in the ini-tial offering period during a calendar quarter, thefirm will not receive any additional compensationwith respect to such trusts. Once a firm reaches aparticular breakpoint during a quarter, the firmwill receive the stated volume concession on allinitial offering period sales of Volume ConcessionA trusts during the applicable quarter. For exam-ple, if a firm sells $12.5 million of units ofVolume Concession A trusts in the initial offeringperiod during a calendar quarter, the firm willreceive additional compensation of 0.05% of$12.5 million and if a firm sells $27.0 million ofunits of Volume Concession A trusts in the initialoffering period during a calendar quarter, the firmwill receive additional compensation of 0.100%of $27.0 million.

In addition, dealer firms will not receive vol-ume concessions on the sale of units which arenot subject to a transactional sales charge.However, such sales will be included in determin-ing whether a firm has met the sales level break-points for volume concessions subject to the poli-cies of the related selling firm. Secondary marketsales of all unit trusts are excluded for purposes ofthese volume concessions. We will pay theseamounts out of our own assets within a reason-able time following each calendar quarter.

Any sales fee discount is borne by the broker-dealer or selling firm out of the broker-dealer con-cession or agency commission. We reserve theright to change the amount of concessions oragency commissions from time to time.

We currently provide, at our own expenseand out of our own profits, additional compensa-tion and benefits to broker-dealers who sell unitsof this trust and our other products. This com-pensation is intended to result in additional salesof our products and/or compensate broker-dealersand financial advisors for past sales. A number offactors are considered in determining whether topay these additional amounts. Such factors mayinclude, but are not limited to, the level or typeof services provided by the intermediary, the levelor expected level of sales of our products by theintermediary or its agents, the placing of ourproducts on a preferred or recommended productlist and access to an intermediary’s personnel. Wemay make these payments for marketing, promo-tional or related expenses, including, but not lim-ited to, expenses of entertaining retail customersand financial advisors, advertising, sponsorship ofevents or seminars, obtaining information aboutthe breakdown of unit sales among an intermedi-ary’s representatives or offices, obtaining shelfspace in broker-dealer firms and similar activitiesdesigned to promote the sale of our products. Wemake such payments to a substantial majority ofintermediaries that sell our products. We mayalso make certain payments to, or on behalf of,intermediaries to defray a portion of their costsincurred for the purpose of facilitating unit sales,such as the costs of developing or purchasingtrading systems to process unit trades. Paymentsof such additional compensation described in thisparagraph and the volume concessions describedabove, some of which may be characterized as“revenue sharing,” may create an incentive forfinancial intermediaries and their agents to sell or

recommend our products, including this trust,over other products. These arrangements will notchange the price you pay for your units.

We generally register units for sale in variousstates in the U.S. We do not register units forsale in any foreign country. This prospectus doesnot constitute an offer of units in any state orcountry where units cannot be offered or soldlawfully. We may reject any order for units inwhole or in part.

We may gain or lose money when we holdunits in the primary or secondary market due tofluctuations in unit prices. The gain or loss isequal to the difference between the price we payfor units and the price at which we sell or redeemthem. We may also gain or lose money when wedeposit securities to create units. The amount ofour profit or loss on the initial deposit of securitiesinto the trust is shown in the “Notes to Portfolio.”

TTAAXXEESS

This section summarizes some of the mainU.S. federal income tax consequences of owningunits of the trust. This section is current as of thedate of this prospectus. Tax laws and interpreta-tions change frequently, and these summaries donot describe all of the tax consequences to all tax-payers. For example, these summaries generallydo not describe your situation if you are a corpo-ration, a non-U.S. person, a broker/dealer, orother investor with special circumstances. Inaddition, this section does not describe your state,local or foreign tax consequences.

This federal income tax summary is based inpart on the advice of counsel to the sponsor. TheInternal Revenue Service could disagree with anyconclusions set forth in this section. In addition,our counsel was not asked to review, and has not

reached a conclusion with respect to the federalincome tax treatment of the assets to be depositedin your trust. This may not be sufficient for youto use for the purpose of avoiding penalties underfederal tax law.

As with any investment, you should seekadvice based on your individual circumstancesfrom your own tax advisor.

TTrruusstt SSttaattuuss.. Your trust intends to qualify asa “regulated investment company” under the fed-eral tax laws. If your trust qualifies as a regulatedinvestment company and distributes its income asrequired by the tax law, your trust generally willnot pay federal income taxes. If your trust investsin a partnership, an adverse federal income taxaudit of that partnership could result in the trustbeing required to pay federal income tax or pay adeficiency dividend (without having receivedadditional cash).

DDiissttrriibbuuttiioonnss.. Trust distributions are gener-ally taxable. After the end of each year, you willreceive a tax statement that separates your trust’sdistributions into three categories, ordinaryincome distributions, capital gain dividends andreturn of capital. Ordinary income distributionsare generally taxed at your ordinary tax rate,however, as further discussed below, certain ordi-nary income distributions received from yourtrust may be taxed at the capital gains tax rates.Generally, you will treat all capital gain divi-dends as long-term capital gains regardless ofhow long you have owned your units. To deter-mine your actual tax liability for your capitalgain dividends, you must calculate your total netcapital gain or loss for the tax year after consid-ering all of your other taxable transactions, asdescribed below. In addition, your trust maymake distributions that represent a return ofcapital for tax purposes and thus will generally


not be taxable to you. A return of capital,although not initially taxable to you, will resultin a reduction in the basis in your units and sub-sequently result in higher levels of taxable capitalgains in the future. In addition, if the non-divi-dend distribution exceeds your basis in yourunits, you will have long-term or short-termgain depending upon your holding period. Thetax status of your distributions from your trust isnot affected by whether you reinvest your distri-butions in additional units or receive them incash. The income from your trust that you musttake into account for federal income tax purpos-es is not reduced by amounts used to pay adeferred sales fee, if any. The tax laws mayrequire you to treat distributions made to you inJanuary as if you had received them onDecember 31 of the previous year. Income fromyour trust may also be subject to a 3.8 percent“medicare tax.” This tax generally applies toyour net investment income if your adjustedgross income exceeds certain threshold amounts,which are $250,000 in the case of married cou-ples filing joint returns and $200,000 in the caseof single individuals.

DDiivviiddeennddss RReecceeiivveedd DDeedduuccttiioonn.. A corpora-tion that owns units generally will not be enti-tled to the dividends received deduction withrespect to many dividends received from yourtrust because the dividends received deduction isgenerally not available for distributions fromregulated investment companies. However, cer-tain ordinary income dividends on units that areattributable to qualifying dividends received byyour trust from certain corporations may bereported by the trust as being eligible for thedividends received deduction.

SSaallee oorr RReeddeemmppttiioonn ooff UUnniittss.. If you sell orredeem your units, you will generally recognize ataxable gain or loss. To determine the amount of

this gain or loss, you must subtract your tax basisin your units from the amount you receive in thetransaction. Your tax basis in your units is gener-ally equal to the cost of your units, generallyincluding sales charges. In some cases, however,you may have to adjust your tax basis after youpurchase your units.

CCaappiittaall GGaaiinnss aanndd LLoosssseess aanndd CCeerrttaaiinn OOrrddiinnaarryyIInnccoommee DDiivviiddeennddss.. If you are an individual, themaximum marginal stated federal tax rate for netcapital gain is generally 20% for taxpayers in the39.6% tax bracket, 15% for taxpayers in the25%, 28%, 33% and 35% tax brackets and 0%for taxpayers in the 10% and 15% tax brackets.Some portion of your capital gain dividends maybe subject to higher maximum marginal statedfederal income tax rates. Some portion of yourcapital gain dividends may be attributable to thetrust’s interest in a master limited partnershipwhich may be subject to a maximum marginalstated federal income tax rate of 28%, rather thanthe rates set forth above. In addition, capital gainreceived from assets held for more than one yearthat is considered “unrecaptured section 1250gain” (which may be the case, for example, withsome capital gains attributable to equity interestsin real estate investment trusts that constituteinterests in entities treated as real estate invest-ment trusts for federal income tax purposes) istaxed at a maximum stated tax rate of 25%. Inthe case of capital gain dividends, the determina-tion of which portion of the capital gain divi-dend, if any, is subject to the 28% tax rate or the25% tax rate, will be made based on rules pre-scribed by the United States Treasury. Capitalgains may also be subject to the “medicare tax”described above.

Net capital gain equals net long-term capitalgain minus net short-term capital loss for the tax-able year. Capital gain or loss is long-term if the


holding period for the asset is more than one yearand is short-term if the holding period for theasset is one year or less. You must exclude thedate you purchase your units to determine yourholding period. However, if you receive a capitalgain dividend from your trust and sell your unitat a loss after holding it for six months or less, theloss will be recharacterized as long-term capitalloss to the extent of the capital gain dividendreceived. The tax rates for capital gains realizedfrom assets held for one year or less are generallythe same as for ordinary income. The InternalRevenue Code treats certain capital gains as ordi-nary income in special situations.

Ordinary income dividends received by anindividual unitholder from a regulated investmentcompany such as your trust are generally taxed atthe same rates that apply to net capital gain (asdiscussed above), provided certain holding periodrequirements are satisfied and provided the divi-dends are attributable to qualifying dividendsreceived by your trust itself. Distributions withrespect to shares in real estate investment trustsare qualifying dividends only in limited circum-stances. Your trust will provide notice to itsunitholders of the amount of any distributionwhich may be taken into account as a dividendwhich is eligible for the capital gains tax rates.

IInn--KKiinndd DDiissttrriibbuuttiioonnss.. Under certain circum-stances, as described in this prospectus, you mayreceive an in-kind distribution of trust securitieswhen you redeem units or when your trust termi-nates. This distribution will be treated as a salefor federal income tax purposes and you will gen-erally recognize gain or loss, generally based onthe value at that time of the securities and theamount of cash received. The Internal RevenueService could however assert that a loss could notbe currently deducted.

RRoolllloovveerrss aanndd EExxcchhaannggeess.. If you elect to haveyour proceeds from your trust rolled over into afuture trust, the exchange would generally be con-sidered a sale for federal income tax purposes.

DDeedduuccttiibbiilliittyy ooff TTrruusstt EExxppeennsseess.. Expensesincurred and deducted by your trust will generallynot be treated as income taxable to you. In somecases, however, you may be required to treat yourportion of these trust expenses as income. Inthese cases you may be able to take a deductionfor these expenses. However, certain miscella-neous itemized deductions, such as investmentexpenses, may be deducted by individuals only tothe extent that all of these deductions exceed 2%of the individual’s adjusted gross income. Someindividuals may also be subject to further limita-tions on the amount of their itemized deductions,depending on their income.

FFoorreeiiggnn TTaaxx CCrreeddiitt.. If your trust invests inany foreign securities, the tax statement that youreceive may include an item showing foreign taxesyour trust paid to other countries. In this case,dividends taxed to you will include your share ofthe taxes your trust paid to other countries. Youmay be able to deduct or receive a tax credit foryour share of these taxes.

IInnvveessttmmeennttss iinn CCeerrttaaiinn FFoorreeiiggnn CCoorrppoorraattiioonnss..If your trust holds an equity interest in any “pas-sive foreign investment companies” (“PFICs”),which are generally certain foreign corporationsthat receive at least 75% of their annual grossincome from passive sources (such as interest,dividends, certain rents and royalties or capitalgains) or that hold at least 50% of their assets ininvestments producing such passive income, thetrust could be subject to U.S. federal income taxand additional interest charges on gains and cer-tain distributions with respect to those equityinterests, even if all the income or gain is timely


distributed to its unitholders. Your trust willnot be able to pass through to its unitholdersany credit or deduction for such taxes. Yourtrust may be able to make an election that couldameliorate these adverse tax consequences. Inthis case, your trust would recognize as ordinaryincome any increase in the value of such PFICshares, and as ordinary loss any decrease in suchvalue to the extent it did not exceed priorincreases included in income. Under this elec-tion, your trust might be required to recognizein a year income in excess of its distributionsfrom PFICs and its proceeds from dispositionsof PFIC stock during that year, and such incomewould nevertheless be subject to the distributionrequirement and would be taken into accountfor purposes of the 4% excise tax. Dividendspaid by PFICs are not treated as qualified divi-dend income.

FFoorreeiiggnn IInnvveessttoorrss.. If you are a foreign investor(i.e., an investor other than a U.S. citizen or resi-dent or a U.S. corporation, partnership, estate ortrust), you should be aware that, generally, subjectto applicable tax treaties, distributions from yourtrust will be characterized as dividends for federalincome tax purposes (other than dividends whichyour trust properly reports as capital gain divi-dends) and will be subject to U.S. income taxes,including withholding taxes, subject to certainexceptions described below. However, distribu-tions received by a foreign investor from yourtrust that are properly reported by your trust ascapital gain dividends may not be subject to U.S.federal income taxes, including withholding taxes,provided that your trust makes certain electionsand certain other conditions are met.Distributions from your trust that are properlyreported by the trust as an interest-related divi-dend attributable to certain interest incomereceived by the trust or as a short-term capitalgain dividend attributable to certain net short-

term capital gain income received by the trustmay not be subject to U.S. federal income taxes,including withholding taxes when received by cer-tain foreign investors, provided that the trustmakes certain elections and certain other condi-tions are met. In addition, distributions inrespect of units may be subject to a U.S. with-holding tax of 30% in the case of distributions to(i) certain non-U.S. financial institutions thathave not entered into an agreement with the U.S.Treasury to collect and disclose certain informa-tion and are not resident in a jurisdiction that hasentered into such an agreement with the U.S.Treasury and (ii) certain other non-U.S. entitiesthat do not provide certain certifications andinformation about the entity’s U.S. owners.Dispositions of units by such persons may be sub-ject to such withholding after December 31,2018. You should also consult your tax advisorwith respect to other U.S. tax withholding andreporting requirements.

EEXXPPEENNSSEESS

Your trust will pay various expenses to con-duct its operations. The “Fees and Expenses” sec-tion of the “Investment Summary” in this prospec-tus shows the estimated amount of these expenses.

The sponsor will receive a fee from yourtrust for creating and developing the trust,including determining the trust’s objectives,policies, composition and size, selecting serviceproviders and information services and for pro-viding other similar administrative and ministe-rial functions. This “creation and developmentfee” is a charge of $0.05 per unit. The trusteewill deduct this amount from your trust’s assetsas of the close of the initial offering period. Noportion of this fee is applied to the payment ofdistribution expenses or as compensation forsales efforts. This fee will not be deducted from


proceeds received upon a repurchase, redemp-tion or exchange of units before the close of theinitial public offering period.

Your trust will pay a fee to the trustee for itsservices. The trustee also benefits when it holdscash for your trust in non-interest bearingaccounts. Your trust will reimburse us as supervi-sor, evaluator and sponsor for providing portfoliosupervisory services, for evaluating your portfolioand for providing bookkeeping and administra-tive services. Our reimbursements may exceedthe costs of the services we provide to your trustbut will not exceed the costs of services providedto all of our unit investment trusts in any calen-dar year. All of these fees may adjust for infla-tion without your approval.

Your trust will also pay its general operatingexpenses. Your trust may pay expenses such astrustee expenses (including legal and auditingexpenses), various governmental charges, fees forextraordinary trustee services, costs of takingaction to protect your trust, costs of indemnifyingthe trustee and the sponsor, legal fees and expensesand expenses incurred in contacting you. Yourtrust may pay the costs of updating its registrationstatement each year. Your trust will pay a licensefee for the use of certain service marks, trade-marks, trade names and/or other property ofHartford Investment Management Company.The trustee will generally pay trust expenses fromdistributions received on the securities but in somecases may sell securities to pay trust expenses.

EEXXPPEERRTTSS

LLeeggaall MMaatttteerrss.. Chapman and Cutler, LLP actsas counsel for the trust and has given an opinionthat the units are validly issued. Dorsey &Whitney LLP acts as counsel for the trustee.

IInnddeeppeennddeenntt RReeggiisstteerreedd PPuubblliicc AAccccoouunnttiinnggFFiirrmm.. Grant Thornton LLP, independent regis-tered public accounting firm, audited the state-ment of financial condition and the portfolioincluded in this prospectus.

AADDDDIITTIIOONNAALL IINNFFOORRMMAATTIIOONN

This prospectus does not contain all theinformation in the registration statement thatyour trust filed with the Securities and ExchangeCommission. The Information Supplement,which was filed with the Securities and ExchangeCommission, includes more detailed informationabout the securities in your portfolio, investmentrisks and general information about your trust.You can obtain the Information Supplement bycontacting us or the Securities and ExchangeCommission as indicated on the back cover ofthis prospectus. This prospectus incorporates theInformation Supplement by reference (it is legallyconsidered part of this prospectus).


RReeppoorrtt ooff IInnddeeppeennddeenntt RReeggiisstteerreedd PPuubblliicc AAccccoouunnttiinngg FFiirrmm

UUnniitthhoollddeerrssAAddvviissoorrss DDiisscciipplliinneedd TTrruusstt 11770022

We have audited the accompanying statement of financial condition, including the trust portfolio on pages 4 and 5, of Advisors DisciplinedTrust 1702, as of August 5, 2016, the initial date of deposit. The statement of financial condition is the responsibility of the trust’s sponsor.Our responsibility is to express an opinion on this statement of financial condition based on our audit.

We conducted our audit in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of financial condition is freeof material misstatement. We were not engaged to perform an audit of the trust’s internal control over financial reporting. Our audit includedconsideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the trust’s internal control over financial reporting. Accordingly, weexpress no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statementof financial condition, assessing the accounting principles used and significant estimates made by the sponsor, as well as evaluating the overallstatement of financial condition presentation. Our procedures included confirmation with The Bank of New York Mellon, trustee, of cash oran irrevocable letter of credit deposited for the purchase of securities as shown in the statement of financial condition as of August 5, 2016.We believe that our audit of the statement of financial condition provides a reasonable basis for our opinion.

In our opinion, the statement of financial condition referred to above presents fairly, in all material respects, the financial position of AdvisorsDisciplined Trust 1702 as of August 5, 2016, in conformity with accounting principles generally accepted in the United States of America.

Chicago, Illinois GRANT THORNTON LLPAugust 5, 2016

Advisors Disciplined Trust 1702

Statement of Financial Condition as of August 5, 2016

IInnvveessttmmeenntt iinn sseeccuurriittiieessContracts to purchase underlying securities (1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 148,713

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 148,713

LLiiaabbiilliittiieess aanndd iinntteerreesstt ooff iinnvveessttoorrssLiabilities:

Organization costs (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 571Deferred sales fee (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,680Creation and development fee (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 751

5,002Interest of investors:

Cost to investors (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,220Less: initial sales fee (4)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,507Less: deferred sales fee, creation and development fee and organization costs (3)(4)(5) . . . . . . . . . . . . . . 5,002Net interest of investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,711Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 148,713

Number of units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,022

Net asset value per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9.567

(1) Aggregate cost of the securities is based on the closing sale price evaluations as determined by the evaluator.(2) Cash or an irrevocable letter of credit has been deposited with the trustee covering the funds (aggregating $200,000) necessary for the purchase

of securities in the trust represented by purchase contracts.(3) A portion of the public offering price represents an amount sufficient to pay for all or a portion of the costs incurred in establishing and offering

the trust. These costs have been estimated at $0.038 per unit for the trust. A distribution will be made as of the earlier of the close of the initialoffering period or six months following the trust’s inception date to an account maintained by the trustee from which this obligation of theinvestors will be satisfied. To the extent the actual organization costs are greater than the estimated amount, only the estimated organization costsadded to the public offering price will be reimbursed to the sponsor and deducted from the assets of the trust.

(4) The total sales fee consists of an initial sales fee, a deferred sales fee and a creation and development fee. The initial sales fee is equal to thedifference between the maximum sales fee and the sum of the remaining deferred sales fee and the total creation and development fee. Onthe inception date, the total sales fee is 3.95% of the public offering price per unit. The deferred sales fee is equal to $0.245 per unit and thecreation and development fee is equal to $0.05 per unit.

(5) The aggregate cost to investors includes the applicable sales fee assuming no reduction of sales fees.


Contents

Investment Summary

A concise description 2 Investment Objectiveof essential information 2 Principal Investment Strategyabout the portfolio 2 Principal Risks

3 Who Should Invest3 Essential Information3 Fees and Expenses4 Portfolio

Understanding Your Investment

Detailed information to 6 How to Buy Unitshelp you understand 9 How to Sell Your Unitsyour investment 11 Distributions

12 Investment Risks14 How the Trust Works19 Taxes22 Expenses23 Experts23 Additional Information24 Report of Independent Registered

Public Accounting Firm24 Statement of Financial Condition

Where to Learn More

You can contact us for Visit us on the Internetfree information about http://www.AAMlive.comthis and other investments, Call Advisors Assetincluding the Information Management, Inc.Supplement (877) 858-1773

Call The Bank of New York Mellon(800) 848-6468

Additional Information

This prospectus does not contain all information filed with theSecurities and Exchange Commission. To obtain or copy this infor-mation including the Information Supplement (a duplication fee maybe required):

E-mail: [email protected]: Public Reference Section

Washington, D.C. 20549Visit: http://www.sec.gov

(EDGAR Database)Call: 1-202-551-8090

(only for information on the operation of thePublic Reference Section)

Refer to:Advisors Disciplined Trust 1702Securities Act file number: 333-211684Investment Company Act file number: 811-21056

DIVIDEND SUSTAINABILITYPORTFOLIO,

SERIES 2016-3 -A HARTFORD INVESTMENTMANAGEMENT COMPANY

(“HIMCO”)PORTFOLIO

PROSPECTUS

AUGUST 5, 2016

dividend sustainability portfolio, series 2016-3 a hartford … · 2016. 8. 5. · dividend...

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