In doing so, VyStar Investment Services is proud to have a relationship with LPL Financial, who offers a full range of investment products and services and enhanced technologies.
LPL Financial is a Registered Investment Advisor and a broker/dealer, which means that an LPL Financial Advisor can offer you both investment advisory and brokerage services. We want to make sure you are aware of some of the important considerations you need to take into account when deciding which type of service serves your investment goals and needs.
LPL Financial is a Registered Investment Advisor with the Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. As a Registered Investment Advisor, LPL Financial is a fiduciary to its advisory clients and, as such, is obligated to act solely in the best interests of clients and make full and fair disclosure of all material conflicts of interest. LPL Financial and its financial advisors offer a number of investment advisory programs and services, including discretionary wrap programs such as Strategic Asset Management (SAM), Model Wealth Portfolios (MWP) and Personal Wealth Portfolios (PWP), mutual fund asset allocation programs such as Optimum Market Portfolios (OMP) and financial planning services.
Under its investment advisory programs and mutual fund asset-allocation programs, LPL Financial and its financial advisors provide ongoing investment advice and monitoring of client portfolios. These services may be on a discretionary basis, which means that you do not need to direct your LPL Financial Advisor to make trades, rebalance your portfolio or make other investment decisions for your account. For such services, clients pay LPL Financial a fee for investment management, brokerage, custody and administrative services. The fee, which is negotiated between the LPL Financial Advisor and client, is typically a percentage fee based on the value of the assets in the account. These ongoing services and fees are set out in the Investment Advisory Agreement between LPL Financial and the client, which can be terminated at any time by the client.
As an alternative, or in addition to ongoing investment advice in an advisory program, clients may engage with an LPL Financial Advisor for financial planning services. The client pays a flat fee or hourly fee for this type of service, which is not ongoing. As noted above, when LPL Financial acts as a Registered Investment Advisor, it is required to disclose all material conflicts of interest between LPL Financial and its advisory clients. LPL Financial delivers to its advisory clients at the time of engagement a Form ADV disclosure brochure that contains important information about LPL Financial and the LPL Financial Advisor, the advisory services to be provided, the fees to be paid for such services, and material conflicts of interest. Such disclosure brochures may be obtained by visiting www.lpl.com and selecting “Working with an Advisor,” then “Learn More About Disclosure.” When considering whether to engage an LPL Financial Advisor, it is important that you carefully read the account agreements and disclosures that are provided to you.
Investing in mutual funds involves risk, including possible loss of principal. Asset allocation does not ensure a profit against a loss.
LPL Financial is also a broker/dealer registered with the SEC and a member of the Financial Industry Regulatory Authority (FINRA). In addition, LPL Financial is registered as a broker/dealer with each of the 50 states. As a broker/ dealer, LPL Financial includes the following services:
In a brokerage relationship, clients typically pay a commission to LPL Financial on each transaction in the account. The amount of the commission in a brokerage relationship varies depending on the security or investment product selected by the client. For mutual funds, the commission or sales load is typically paid upfront, is charged directly against the investment and is based on the amount of assets invested. For example, if you have $1,000 and want to invest it in a mutual fund Class A share with a 5% front-end load through a brokerage relationship, the $50 sales charge you must pay comes off the top, and the remaining $950 is invested in the fund. Mutual funds typically offer multiple share classes that have different fees and expenses and pay brokers in different ways. The applicable sales charge is described in the prospectus or other offering document of the investment product provided to the client in connection with the investment. As a broker/dealer, LPL Financial may also receive other types of fees and compensation, such as trail payments (also called 12b-1 fees) and markups.
When LPL Financial acts as a broker/dealer, it has a duty to deal fairly with its brokerage clients. When an LPL Financial Advisor makes a recommendation about a security in a brokerage relationship, LPL Financial has an obligation to determine that the recommendation is suitable for the client based on the client’s stated investment objective, risk tolerance, tax status and other financial information provided by the client. The LPL Financial Advisor has no duty to provide ongoing investment advice with respect to a brokerage account. LPL Financial does not take discretion from its brokerage clients; in other words, LPL Financial will only place transactions for its brokerage clients upon direction from the client. The LPL Financial obligation to disclose detailed information to clients about the nature and scope of its business, fees, conflicts of interest and other matters is more limited.
Investing in mutual funds involves risk, including possible loss of principal.
In some cases, an advisory relationship may cost you more than a brokerage relationship. However, in other cases, a brokerage relationship may cost you more. These questions and the information above will help you determine what level of service and pricing structure is appropriate for you. Keep in mind that your needs and goals may change over time, and how you transact business with your LPL Financial Advisor may change as well. As such, this should be a topic you review with your LPL Financial Advisor over the course of your relationship. If you have any questions about the differences between an advisory and brokerage relationship, you should ask your LPL Financial Advisor, who is a valuable resource to help you make the investment decisions that are suitable for you.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
Contact a VyStar Investment Services LPL Financial Advisor today by phone (904) 908-2495 or email VISMarketing@vystarcu.org.
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