The Planners Network, Inc. A Registered Investment Advisor

Transcription

1 The Planners Network, Inc. A Registered Investment Advisor Lyndie Lane, Suite 116 Temecula, CA (951) Branch Office Compliance Audit Pre-Visit Checklist Please answer the questions below. Use additional sheets if necessary. BACKGROUND INFORMATION AND REPRESENTATIVE STATUS 1. Please list persons in your office providing investment advice to clients or who are TPN representatives: Name: Office Location: Name: Office Location: Name: Office Location: 2. Please list persons in your office who are not registered RIA representatives of TPN and briefly describe their job functions: Name: Job Function: Name: Job Function: Name: Job Function: 3. List the states you have clients in, with the number of clients in that state if there are less than 5 clients in the state:

2 4. List the states in which you have a place of business, i.e. office or other place in which you hold yourself out to the public as conducting business from (e.g. seminars held at a hotel). 5. Do you maintain or represent an investment advisor other than TPN? (If so, please provide the name and Form ADV). A. Do any of your clients receive investment advice from both TPN and your other investment advisor? (If so, please specify the names and the nature of the services the client receives from each RIA). PRACTICE DESCRIPTION 1. List the types of securities or investments you render investment advice on: a. Equity Securities Exchange-listed securities Securities traded over-the-counter Foreign issuers Warrants Corporate debt securities (other than commercial paper) Commercial paper Certificates of deposit Municipal securities Variable life insurance Variable annuities Mutual fund shares United States government securities b. Options contracts on: Securities Commodities c. Futures contracts on: Tangibles Intangibles d. Interests in partnerships investing in: Real estate Oil and gas interests Other (Please describe)

3 e. Other investments (please describe) 2. Describe the method of securities analysis you use Charting Fundamental Technical Cyclical Other 3. List the types of services you use as a basis for your investment advice Financial newspapers and magazines Inspections of corporate activities Research materials prepared by others Corporate rating services Timing Services Annual reports, prospectuses, filings with the Securities and Exchange Commission Company press releases Other 4. List the investment strategies used to implement any investment advice given to clients Long term purchases (securities held at least a year) Short term purchases (securities sold within a year) Trading (securities sold within 30 days) Short sales Margin transaction Option writing, including covered options, uncovered options or spreading strategies Other 5. List the types of fees you charge: A percentage of assets under management Hourly charges Fixed fees (not including subscription fees) Subscription fees Commissions

4 Other 6. List the percentages of your RIA client base which are: Individuals Banks or thrift institutions Investment companies Pension and profit sharing plans Trusts, estates, or charitable organizations Corporations or business entities other than those listed above Other PRACTICE PROCEDURES 1. Explain what your standard procedure is with regard to bringing on a new client, (e.g. What initial documentation is given to the client? What is signed by client?). please attach forms that you regularly use with your clients or in your practice relating to your investment advisory business. 2. Do you impose a minimum dollar value of assets or other conditions for starting or maintaining an account? (if so, what is the amount?) a. Have you deviated from this minimum? (If so, what is the lowest amount you have accepted). 3. Do you maintain client files? a. Do you maintain an individual file for each client? b. Do clients have an RIA file separate from any other file (e.g. Broker- Dealer)? c. Do these files contain copies of a new account form? d. Do the files contain a new client questionnaire or some other document containing background data on the client? i. Is it signed by the client?

5 e. How determine suitability of advice for client? f. Do you maintain documentation which indicates how the investment recommendation is suitable to the client in light of their background, goals and circumstances, (i.e. investment policy guideline)? (If so, please describe). g. How do you keep abreast of your clients circumstances and objectives, i.e. know your customer on an ongoing basis? h. How do you ensure suitability on an on-going basis? 4. Do you use a vendor or software to assist you in providing investment advice to a client? (If so, please describe) 4. Have you entered into any transactions with clients? (If so, please describe) 5. Have you made a loan to or received a loan from any client? (If so, please describe) 6. Have you made your fee contingent upon the client s portfolio making any specified return? (If so, please describe)

6 7. Do you have any foreign clients or U.S. clients residing in a foreign country? (If so, please describe) 8. Any clients which are banks without a physical presence in the US? (If so, please describe) 9. How are account reviews conducted? a. How often? b. What are their frequency? c. Are there different levels of reviews? d. What are the triggering factors? 10. Privacy: a. How do you use client s information? b. Do you offer privacy policy to client at time they become a client and annually thereafter? c. Do you offer the client the ADV with schedule F when the client first becomes a client as well as annually thereafter? 11. How do you affect trades for clients?

7 12. How do you handle errors? 13. Have you received a proxy relating to an RIA client s account? (If so, how did you handle it?) 14. Do you have ERISA accounts? (If so, please identify and provide an AUM for those accounts) 15. Please list and describe any and all written complaints since the earlier of your last compliance audit or becoming a TPN RIA rep (attach copies of the complaint and any responses). a. Have you had any material (i.e. important to a reasonable person) oral complaints within the time period specified above? 16. How are client funds and securities handled? 17. Do you have any discretionary accounts (i.e. do you have or use authority to determine, without express client consent, the securities to be bought or sold or the amount of the securities to be bought or sold or the broker or dealer to be used or the commission rates paid)? If so, please describe.

8 18. Do you ever change a client s allocation without first receiving consent from the client? FEES 19. Please provide the percentages of billings that you receive from the following business: Investment supervisory services Manage investment advisory accounts not involving investment supervisory services Furnish investment advice through consultations not included in either service described above Issue periodicals about securities by subscription Issue special reports about securities by subscription Issue, not as part of any service described above, any charts, graphs, formulas, or other devices which clients may use to evaluate securities On more than an occasional basis, furnish advice to clients on matters not involving securities Provide a timing service Furnish advice about securities in any manner not described above 20. Fees. a. Is your current fee schedule as stated in ADV? b. What is procedure for billing? (also please attach a copy of one of your last billing statements). c. What is your procedure for fee collection? d. Do you share in capital gains with clients? (If so, please describe) e. Do you charge any fees in advance? (If so, how much and how far in advance?)

9 21. Are you paid cash by or receive some economic benefit (including commissions, equipment or non-research services) from a non-client in connection with giving advice to clients? (If so, please describe) 22. Do you directly or indirectly compensates any person for client referrals? (If so, please describe) 23. Do you receive any compensation for RIA services which is not paid through Partnervest? (If so, please describe) DISCLOSURES AND CONFLICTS 24. Is your business still consistent with what is disclosed in the form ADV and schedule F? (Please note if your practice differs in any way than described in the form ADV). a. How do you obtain the most recent version of the Form ADV? b. Do you notify Partnervest of any changes in your business which are different than what is described in your Schedule F? c. Do you annually (or more frequently) offer your clients a copy of the most recent ADV and your schedule F? (How?) d. Do you provide clients with a choice of the broker-dealer firm to execute their transactions?

10 25. Do you have any personal interest in any securities recommended to clients? a. Have you recommended to clients that they buy or sell securities or investment products in which the you or a related person has some financial interest? (If so, please describe the transaction and client). b. What procedures do you follow in such instances? c. Do you have access to any inside information or persons with inside information relating to any security transaction in last 12 months? d. Also, are you an insider to any entity whose securities you recommend? ADVERTISING, CORRESPONDENCE AND OTHER COMMUNICATIONS 26. Are you sending copies of personal securities transaction reports to Partnervest s compliance department? 27. Advertising, correspondence and marketing: a. How do you create materials? b. Do you maintain records of advertising, correspondence and marketing materials? How?

11 c. Do you retain copies of all outgoing correspondence? How? (Please attach a copy of your letterhead and business card and telephone listing) d. Do you retain all incoming correspondence? How? e. Have all ads been approved by TPN compliance? f. Do you correspond with clients via or instant messaging? g. Do you maintain correspondence in the client s file and also in a chron file? (including electronic)? h. Do you send newsletters? i. Do you charge for your newsletters? ii. Do you maintain a record of all newsletters sent? (Do you record the date(s) they are sent? iii. Do you have TPN compliance approval prior to sending any newsletter? i. Do you send clients article reprints? (If so, please describe) j. Do you have a website? (if so, what is the URL) k. Do you use model performance (If so, please attach examples) l. Do you use actual performance (If so, please attach examples) m. Do you clearly specify which entity is providing service to the client (e.g. investment advisory services provided through TPN) (Please attach your latest ad or newsletter) n. In what manner is the telephone answered in the branch office? (Please describe)

12 28. Client Acquisition: a. How do you generate clients? (Please describe): b. Do you do Cold calling? c. Do you maintain do not call lists? d. How do you check the National Do Not Call List? e. Do you use Solicitors? (Describe how you use them including how you obtain signed solicitor disclosures)? f. Do you give seminars? When, where, how often? Do you maintain records? MISCELLANEOUS 29. Do you use any Third Party Asset Managers (TPAMS)? (If so, please list) a. Do you provide a solicitor s disclosure statement to clients at or before they become clients for each TPAM in which you act as a solicitor? (Does the client sign the document?) b. If the relationship is that the TPAM is a subadvisor, do you disclose that to the client? How? c. Do you have a copy of the TPAM procedures? Are you following the TPAM procedures? d. How do you ensure you have the latest marketing material for TPAMs?

13 30. Do you have any outside business activities, i.e services outside of your service as a TPN RIA rep or as a BD registered rep (e.g. Corporate Services, Estate Planning, Pension Services, Financial Planning)? i. Do you have agreements with any outside service provider? ii. Do you share revenue with any outside service provider? 31. Have you received customer funds or securities for TPN RIA clients? (If so, please describe) i. Have you held any customer funds or securities overnight? ii. Have you received any checks or other negotiable instruments made payable to you? iii. Are all checks made payable to TPN either returned to the client or sent to Partnervest (if for RIA fees)? iv. Do you maintain custody of any customer funds or securities? b. Has the office been visited by the SEC or state securities division, or other regulator since the earlier of your last TPN compliance audit or becoming a TPN RIA rep? (If so, please give details and copies of any correspondence from the regulatory and responses by you).

14 c. Have you or TPN been named in any lawsuit since the earlier of your last TPN compliance audit or becoming a TPN RIA rep? (If so, please provide details) d. Do you have a copy of the TPN RIA Compliance Procedures Manual (or know where to access it)? (If so, what is the date of the manual that you have?) e. Have you completed the TPN RIA continuing eductation via the web? (If not, when do you plan to complete it?)