Arbor Financial was created with many levels of protection. The first is a design issue. To us, it makes no sense to ask the fox to guard the chicken coop. So, Arbor Financial is intentionally designed to separate the management function from the “lockbox” function. This design allows the best of both worlds. Arbor Financial will help you with customized financial advice and personalized investment decision making. Then, for your added risk management, your investments themselves will be held separately by a leading, well-respected company that specializes in helping independent financial advisors and institutions with the custody of their clients’ accounts, transaction processing, and reporting needs.
Arbor Financial was very selective in choosing the location of your “lockbox.” We believe you need a company that is stable, provides high-quality services, and is cost effective, so we can help keep your costs down. LPL Financial was chosen because we believe they are specialists, accurate, experienced, stable, profitable, large, well established, and have the same dedication to our clients as we have. They also have enough scale to be cost effective.
Our biggest concern is that normally their name is instantly known only to industry professionals, because they only market their services directly to advisors, not to clients like you. So, you might not get that instant gut-feeling of stability when you hear their name. It’s our belief that even with this low profile, LPL financial is the right custodian for your money. Here’s why:
- LPL Financial is one of the nation’s largest independent broker-dealers with more than $1 Trillion in assets. LPL supports over 20,000 financial professionals in banks, credit unions, and other financial institutions all over the country.
- As a Financial Industry Regulatory Authority (FINRA) member firm subject to the federal securities laws and the rules of industry self-regulatory organizations, LPL Financial carries out its obligations to protect client assets in their custody with the utmost care and scrupulous adherence to financial protection rules, including those governing the segregation of customer assets. Moreover, LPL maintains net capital well in excess of requirements set out by its regulators.
- LPL Financial is audited by a leading independent accounting firm, Deloitte & Touche, LLP.
But it’s not enough, by itself, to have your assets in the custody of and processed by a stable company like LPL Financial. That is why there are many additional layers of supervision for you:
- Your assets are YOUR assets and no one else’s—they will be strictly separated from the proprietary assets of both LPL Financial and Arbor Financial.
- The LPL Financial SIPC Membership provides account protection up to a maximum of $500,000 per customer, of which $250,000 may be claims for cash. An explanatory brochure is available at www.sipc.org. Additionally, through London Insurers, LPL Financial accounts have additional securities protection to cover the net equity of customer accounts up to an overall aggregate firm limit of $575,000,000 subject to conditions and limitations. The account protection applies when an SIPC member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against losses from the rise and fall in the market value of investments.
- You will have access to your accounts and transaction records, and LPL Financial provides consolidated statements that also make it easy to track your progress over time and simplify tax reporting. End-of-year summary statements will collect all of your important information, including purchases, sales, cost basis, and income and dividend distributions, in a single report.
