FAQ

At Arbor Financial Services, we have over 7,000 mutual funds to choose from. Most, if not all, of your investments will transfer exactly as is.

Do not wait. Although fees are paid quarterly in advance, they are earned daily. That means that all unused days are paid back to you automatically.

Peter Claeys designed, built, and owns Arbor Financial Services. The entire team and he are employees of Arbor Financial Services. We alone will work directly with you. Whenever you have any questions about your finances or investments, we are the people to talk with.

LPL Financial will perform so-called “back office” functions for you and for us. You never need to work directly with LPL, and might not otherwise even know they exist.

Your investments will be in your “lockbox” at LPL Financial, not at Arbor Financial Services. As your “lockbox” custodian, LPL will send monthly statements, quarterly analysis reports, and all tax forms directly to you.

LPL also provides the administrative computer system that will allow you to go online and view your accounts and allow us to process your accounts.

Because LPL Financial does not manufacture any investment products themselves, they allow investment providers from virtually any high quality company to become part of their platform. That dramatically increases the investment choices we have, and makes it easier for us to do our best for you.

No. Although it’s customary in the industry for companies to agree in writing to stay with the new firm for anywhere from five to nine years, Arbor Financial Services did not.

In a fast paced and changing industry, we don’t think it’s in the clients’ best interest for us to be locked into one company for an extended time period, no matter how great they are now. Although the decision would not be taken lightly and we believe LPL Financial will remain the best choice, we need the flexibility to associate with a different firm if that’s what’s in your best interest at the time.

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. But 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, as of August 2, 2022. LPL supports more than 20,000 independent 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.

Your money represents not only your financial future, but also your ability to get adequate medical care later in life, if needed, and a significant portion of your work as an adult.

We believe that you will be better off with Arbor Financial Services than you are now:

Better portfolio. At Arbor Financial Services, we have a significant number of  private money managers and mutual funds to choose from. For example, the Morgan Stanley Smith Barney Fund Solution mutual fund program offers about 300 mutual funds to choose from; Arbor Financial Services offers over 7,000! I believe those additional resources will allow us to improve your portfolio.

Excellent staff and team. At Arbor Financial Services, the universe of top level professionals to choose staff from is increased because candidates will not be excluded due to lack of having certain licenses that are not required for performing their duties. This has allowed us to create a wonderful team of professionals who will work together to meet your needs.

Turnover among staff at Arbor has been low because the work environment and career development opportunities are suited to their individual needs.

The morale and desire of our team to do a great job for you should be higher than most firms for many reasons. Arbor Financial Services has the flexibility to design job descriptions around a specific person’s likes and strengths, and not have to wedge people into roles that are designed for situations that don’t apply to us. Mergers at Wall Street firms almost always result in many people being fired or reassigned to jobs they dislike. At Arbor Financial Services, that’s not an issue. You can read about our team in the About Arbor Financial Services section of our website.

Better service. Having enough client-centric people on the team, giving them the right tools, putting them in the right work environment, and affiliating with a better custodial company are the necessary ingredients for better service.

Stable environment. Arbor Financial Services is stable and growing. LPL Financial is stable and growing.

Many large wire houses are the result of mergers of two giants in the industry. They end up being owned by competitors. Changes due to mergers are likely to cause even the best FAs difficulty in providing you the excellent service that they would otherwise be capable of.

Better written reports and communications. Before any correspondence is permitted to be sent or given to a client at a large wire house, management must first approve it. If an advisor wants to customize mailings to your specific needs, that approval process is normally long and arduous. The request for a customized special analysis, for example, can take over a month to review, and may not be approved at all.

At Arbor Financial Services, we have the flexibility to send you all of the information that you need to understand your investments and make informed choices.

Better custodian. Since LPL Financial specializes in “lockbox” functions, they do not engage in investment business like Wall Street firms—no toxic assets like subprime mortgages, aggressive loans to hedge funds, nor bets on the direction of the markets. Consequently, LPL Financial has been consistently profitable and did not need to be bailed out by the government. Their credit rating actually improved in 2008.

LPL Financial does not have a captive audience for clients. They provide services to non-related independent Financial Advisors, banks, credit unions, and other financial institutions. That means that they are pre-disposed to always improve.

A Wall Street firm uses itself as the “lockbox” custodian. There are no other alternatives.

Here are the steps that I think we should take together:

• Step 1: Get as much information as you need to feel comfortable.
• Step 2: Let us know if you would like us to work together.
• Step 3: If yes, we’ll start the paperwork.
• Step 4: Arbor Financial Services will coordinate with your old firm so you don’t have to. We’ll also help make sure that all your investments transfer properly.
• Step 5: Once we’re settled in, we will review your current investment managers and talk about potential improvements.

There will be no extra taxes for you to transfer most of your accounts to Arbor Financial Services, as your portfolio will come over as is as much as possible. Because we have so many options for mutual funds at Arbor Financial Services (over 7,000!), it is extremely likely that all of your portfolio will transfer as is. Later, if you have a taxable account and wish to replace some of your investment managers with better ones, there may be some tax effects. Of course, those effects will be part of our discussion before we replace any of the managers.