FIA participates in the Schwab Institutional (SI) services program offered to independent investment advisors by Charles Schwab & Company, Inc., and Fidelity Investments Institutional Brokerage Group (FIIBG) program, sponsored by Fidelity Brokerage Services, Inc. Schwab and Fidelity are NASD registered broker dealers.
The Schwab and Fidelity brokerage programs will generally be recommended to advisory clients for the execution of the mutual fund and equity securities transactions. FIA regularly reviews these programs to ensure that its recommendations are consistent with its fiduciary duty. These trading platforms are essential to FIA’s service arrangements and capabilities, and FIA may not accept clients who direct the use of other brokers.
As FIA will not request the discretionary authority to determine the broker dealer to be used or the commission rates to be paid in these situations, clients must direct FIA as to the broker dealer to be used. In directing the use of a particular broker dealer, it should be understood that FIA will not have authority to negotiate commissions among various brokers or obtain volume discounts, and best execution may not be achieved. Not all investment advisers require clients to direct the use of specific brokers.
For fixed income portfolios and transactions, however, FIA may request that it be provided with written authority to determine the broker dealer to use for client transactions and the commissions costs that will be charged to clients for these transactions. Any limitations on this discretionary authority shall be included in this written authority statement. Clients may change/amend these limitations as required. Such amendments shall be submitted in writing.
Through SI and FIIBG programs, FIA receives direct access to real-time client accounts, electronic download of trades, balances and positions, and the ability to directly debit client fees. FIA receives software and services, including reductions in conference and seminar fees, from these program sponsors. FIA also receives software from DFA, which FIA utilizes in forming asset allocation strategies and producing performance reports. FIA also attends DFA conferences.