Notes for Advisors LPL Tracking #1-539912 The attached has been given an 'Approved As Is' status by Marketing Regulatory Review. For advisors who want to use and/or customize pre-approved materials, you must first review Chapter 14 (Communications with the Public), Section 16 (Commonly Used Disclosures), and Section 26 (Pre-Approved Communications), of the Advisor Compliance Manual posted on BranchNet. There, you will find instructions on how to use the correct Broker/Dealer disclosure, use preapproved materials, and meet your Books and Records requirements.
Investment Solutions: Why Advisory May Work for You [Advisor Contact Information] LPL Tracking #1-535745 The attached has been given an 'Approved As Is' status by Marketing Regulatory Review. For advisors who want to use and/or customize preapproved materials, you must first review Chapter 14 (Communications with the Public), Section 16 (Commonly Used Disclosures), and Section 26 (Pre-Approved Communications), of the Advisor Compliance Manual posted on Branch Net. There, you will find instructions on how to use the correct Broker-Dealer disclosure, use preapproved materials, and how to meet your Books and Records requirements. < Insert Broker/Dealer disclosure here >
There are two investment services that I can provide to you: Brokerage and Advisory Standard of Care Suitability: I ensure each transaction is suitable for you at the point in time it occurs. Fiduciary: I have an obligation to put your interests first and to monitor your portfolio on an ongoing basis to review if your investments remain appropriate in light of your financial goals and objectives. Payment You’re charged per purchase or transaction. You’re charged a quarterly fee based on a percentage of your account value. There are currently two different investment services a financial advisor can provide, depending on the needs of the client. These are brokerage and advisory services. Brokerage: Read slide Advisory: Read slide
Brokerage business is appropriate in many circumstances Accounts that might remain in a brokerage model include: Buy and hold accounts with little or no expected trading Class B and C shares Non-exchange-traded assets like alternative investments and variable annuities Concentrated low-basis stock with no expected trading Accounts in which the clients prefer to direct trades Brokerage accounts still have a place for certain clients. The choice between brokerage and fee-based is reliant on each client’s objectives.
The primary difference in the advisory model is that I am a fiduciary As a fiduciary I: Put your interests first in all matters. Avoid conflicts of interest at all costs. Offer access to products suitable for your current financial situation and monitor that they remain appropriate in the future as your financial situation changes. Provide a more holistic approach to investment management. Let’s talk a little bit more about what it means to be a fiduciary. This fiduciary standard means I am legally obligated to put your interests first in all matters and avoid conflicts of interest at all costs. All products or account changes I recommend must not only be suitable for you today, but for your ongoing financial situation. This type of a relationship means that I will have the opportunity to look at your entire financial picture and seek to make decisions that help further your overall financial goals. There’s nothing wrong with a commission-based business with clients, but a fee-based business allows me to have a more holistic approach when I’m working with my clients. I prefer this type of relationship, as I feel that it brings us closer together and more aligned in the goals of your financial future.
I offer advisory services to some clients because of the potential benefits an advisory relationship can provide High level of ongoing service Product Variety Enhanced Ongoing Advisor Relationship There are several potential benefits of an advisory relationship, falling under three categories: improved service, more product options, and a stronger client-advisor relationship
Advisory offerings give me the chance to offer an enhanced service model Holistic financial service. Flexibility: Where you authorize me to, I can easily make changes based on market movements. Fees in line with service: Compensation only grows if account grows. Enhanced service model: I’m excited about our service model, and I look forward to potentially having the opportunity to help you and your family pursue your future financial goals. More flexibility: An advisory relationship gives me the flexibility to do what’s necessary to help you pursue your goals and objectives, especially when the market is volatile. I’ll be able to use strategies that manage risk or take advantage of potential opportunities that present themselves. In addition, I can select and monitor quality investments and/or investment managers on your behalf. Fees in line with service: My interests are aligned with yours. My compensation only grows as your account value grows. I also have access to a full suite of capabilities to help you address your financial goals. Don’t look at the fee as just the cost of trading or investment management; the fee will also cover several other aspects of our relationship: Investment management, including asset allocation, trading, rebalancing, and manager due diligence Ongoing client service Administration Complementary financial service advice Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs. Neither rebalancing nor Asset Allocation assure a profit or protect against a loss.
Advisory products offer a variety of investment options Access a broad set of investment opportunities; easy to move between products More customized and sophisticated strategies that may not be available through brokerage Access to institutional money management through centrally managed platforms Level of Customization Low High Account Minimum Advisor Driven Centrally Managed Model Wealth Portfolios Discretionary research-driven platform $25,000 Strategic Asset Management Comprehensive advisory platform Optimum Market Portfolios Asset allocation program $10,000 $250,000 Personal Wealth Portfolios Unified managed account Manager Select Separate account platform $100,000/Mgr. More investment options: With the capabilities of an advisory model, we can access a broad set of investment opportunities. Greater customization: Through an advisory relationship, I can offer customized and sophisticated strategies for you. Access to institutional money managers: With an advisory investment setup, you can access investments and strategies used by institutional investors. At your account size, we can potentially hire an investment manager to provide customized tax optimization for your account.
I can cultivate stronger relationships with you, the client, by working collaboratively toward your goals Standard of care: Comprehensive, ongoing view Alignment of interests: Both feel comfortable knowing any transactions are independent and objective Stronger overall relationship: Work collaboratively toward your goals Greater standard of care: I have increased responsibility in a fee-based account. I must make sure that each transaction, as well as your entire portfolio, is suitable for your financial goals and objectives on an ongoing basis. A fee-based setup gives us a broad horizon and helps us look at the bigger picture. Better alignment of interests: Creating a fee-based relationship puts us both on the same side of the table from the get-go. Because our interests are aligned, we can both be comfortable that any transactions are independent and objective. You’ll know that my recommendations are in your best interest. You’ll also be able to clearly see how I’m compensated. Stronger client-advisor relationship: A fee-based relationship gives us an opportunity to create and strengthen a solid client experience. This will allow both of us to focus on working to achieve your financial objectives and goals.
Risks & Considerations There is no assurance that the Advisory platforms discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities will be required to affect some of the strategies. Investing involves risks including possible loss of principal. Advisory accounts may not be appropriate for every client. In certain situations it may be appropriate to maintain a brokerage relationship. This material was prepared for [insert advisor name]’s use.
Thank You Contact Information Advisor Name Here Company Name Tel: (###) ###-#### x#### Cell: (###) ###-#### Email: first.lastname@lpl.com Thank client < Insert Broker/Dealer disclosure here >