Focus Newsletter - February 2020

FOCUS
THE NEWSLETTER FOR EXEMPLARY ADVISORS
 FEBRUARY 2020

DID YOU

KNOW?

Written by Shaun Tessmer

10 KEY WAYS TO
PROVISIONS OF STAY
THE SECURE ACT
CONNECTED
AT LPL

FOCUS

CONTENTS

UPCOMING EVENTS 3
Did You Know?
Monthly Webinar Series Written by Shaun
February 10, 2020 Tessmer

Mid Winter Conference 7  
February 26-28, 2020 10 Key Provisions of the
Secure Act
EASY WAYS TO STAY
CONNECTED AT LPL

DAILY: A quick check of the Resource
Center Homepage
BI-WEEKLY: Peruse Streamline News
MONTHLY: Read the Monthly Compliance
Alert
QUARTERLY: Enjoy LPL Magazine

Have you heard??

Market Signals Podcast

John Lynch and Ryan Detrick from Research discuss current market trends and
share insightful projections. John and Ryan are well-known in the industry and

have gained a following with their news-you-can-use podcasts recorded at
LPL’s Carolinas campus studio.

You can subscribe wherever you get your podcasts!
iTunes, Google Play, Spotify, Stitcher

FOCUS NEWSLETTER   2

EXEMPLAR FOCUS

DID YOU KNOW?

Timely information to keep you in
compliance and always moving forward

Written by Shaun Tessmer

M             oneyGuidePro and A - If you had clients using D - The entire office should sign
MGPro portal prior then there up for the integration due to the
Clientworks Integration: current link for access will not way clients are shared in the
MoneyGuide is now integrated work and a new link needs to be office configuration at
with ClientWorks Connected. provided. MoneyGuide. Please speak with
With data flowing to your office manager and call us
MoneyGuide, you will be able to B - The advisor needs to launch to discuss coordinating the sign
save time and enrich your the integration/data feed from up process.
planning by sharing key data. ClientWorks Summary tab on the
  primary client. Once the primary Note: To subscribe to
I just learned some very helpful is integrated then the advisor MoneyGuide please contact the
things that are new or changed needs to integrate the second MoneyGuide Sales Team at 800-
due the MGPro/ LPL Integration. client by using the MoneyGuide 743-7092.  To learn more about
We’ve had clients informing us integration tool and not the one what financial planning software
there access wouldn’t work and in Clientworks. option may be best for you,
new data feed issues. please contact the LPL Financial
C - If current clients enabled Planning department at 800-877-
data feeds from MyAccountView 7210 ext.6600. Enabling you to
into Moneyguide pro then the integrate MoneyGuide with
advisor needs to suppress or ClientWorks is just one more
hide the initial integration and step on the journey to providing
relink via the process I listed in you with an industry-leading
line “B” above. technology platform.
  
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EXEMPLAR FOCUS

Branch Office Audits

Many of you in the enterprise were audited last year by LPL and I
am happy to say that you all are doing a great job with keeping
yourself and your offices in compliance at LPL. If you were
audited last year you might not be audited for another 2 to 3
years but some states do require your offices to be audit on an
annual basis (Sorry to my Indiana people). Also, I want you all to
be aware that your next branch audit could be a surprise audit.
This can happen to any of us so it is very important to update
your out of office with LPL if you are out of the office for more
than two consecutive business days. If you have any questions on
this process, please reach out to Shaun Tessmer for more
details.
Note: If you haven’t been audited yet by LPL, you will be audited
this year and they will call you to set up an audit. Once you have
picked a date, please reach out to me (Shaun Tessmer) and I will
come out and make sure you are set up for a successful audit. I
am here to help, so don’t hesitate to give me a call.

What is the Advisory Account Deactivation Process?

Advisory accounts are terminated due to either a Rep’s request or by Compliance due Compliance policy violations.
The most common policy violations include maintaining a high cash balance for an extended period of time, not
rebalancing an account every 2 years or maintaining a concentrated position without having a position
concentration (A40) form on file or beyond a 2 year period. The F760 form is to reactivate an account that was
terminated at the Rep’s request. If a SAM account termination is requested by Compliance the account cannot be
reopened. If the client wants to maintain a SAM relationship a new account would need to be opened and the
assets journaled.

Have you Transitioned to Social Patrol Yet?

LPL transitioned over to Social Patrol to automate LPL’s supervision of your social Shaun Says!
media marketing by capturing posts and automatically scanning them for review, saving
Adding Social Patrol is required for
you time and allowing LPL to meet their regulatory requirements. Social Patrol has individuals that have a social media
taken the place of Erado which when we all joined LPL was the approved Social Media such as LinkedIn, Facebook business
page, and Twitter. Questions? Call
provider. Social Patrol will enable you to market your business using social media
without a lengthy, manual pre-use review process, while enabling LPL to meet me!

supervisory and record keeping obligations. This change will also enable LPL to expand
their social media program and provide you with new marketing resources and tools
that can benefit your business. If you have questions on how to switch to Social Patrol,
please log into clientworks-resource center-search-social patrol.

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EXEMPLAR FOCUS

HIGH CASH POLICY INACTIVITY POLICY

Accounts are subject to termination if the account is SAM accounts are required to be rebalanced by at least
more than 50% cash for over a year. On the 3rd 5% of the account balance every rolling two years. At
least one purchase is required for the account to be
Saturday of the twelfth month a Proactive alert would be
issued advising that the funds needs to be invested by considered rebalanced. A Proactive alert is issued during
the end of the following month. For example, an alert the 21st month to allow enough time for the Rep to meet
issued 1/18/20 would have a due date of 2/29/20. The
rep would also receive an email approx. 2 weeks before with the client. The deadline to rebalance is the end of
the deadline as a reminder.  the 24th month. For example, if the Proactive alert is
issued 1/18/20, the deadline to rebalance would be
4/30/20. The rep would also receive an email approx. 2

weeks before the deadline as a reminder.

CONCENTRATION POLICY

When there is a concentrated position we required a signed position concentration form (A40) be submitted within 30 days of the
Proactive alert. The policy allows the position is stay in the account provided that reduction starts within 18 months, with the position

under the concentration limit within 24 months.  If there is no intention to reduce the position, the position should be moved to a
brokerage account as it is not appropriate to use a buy and hold strategy for a concentrated position in an advisory account.

 An account could be terminated for not having a form on file or if the position has been concentrated for more than 2 years. Proactive
issues alerts for concentrations on a quarterly basis. For example, an alert would be generated 1/18/20 for any position that became

concentrated between mid-October to January 18th, assuming the position is still concentrated on 1/18/20. Subsequent alerts could be
issued if the form is not on file and/or the position is not being reduced. The timing varies as it is dependent on when the form is

received and transaction occurs.  An email would be sent to the Rep 30 days prior to termination when the form is not submitted after a
period of time or the position has been concentrated for 2 years.

CLIENTWORKS NOTIFICATIONS Notifications are sent when an
alert becomes past due, i.e. has not
Notifications are sent when an alert becomes been responded to within 30 days.
past due, i.e. has not been responded to within
30 days. Another notification is sent when the
alert becomes escalated, i.e. has not been
responded to within 45 days. These
notifications state that the account could be
terminated if not responded to within an
additional 30 days for failure to respond. LPL
reserves the right to terminate the account
and/or issue a letter of caution and/or issue a
fine for failure respond to Compliance issues.
Typically the rep is sent an email giving 30 days
notice of termination as well.

There is no notification given if a terminated
account is funded. However these accounts do
not allow purchases. The funds in these
accounts can always be disbursed to the client
or journaled into another client owned LPL
account. Some paperwork required if the
account registrations are not identical.

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EXEMPLAR FOCUS

A Few Things Coming Down the Pipe:

New Annuity Contract Delivery Process - Effective March 1 Shaun Says!
 
Currently insurance carriers send client annuity contracts directly to you, the agent of record, and This was the policy at
you’re responsible for delivering it to the client and obtaining a delivery receipt.  Cetera Advisor Networks,
  so in my opinion this is a
New Process:
Beginning March 1, insurance carriers will deliver contracts directly to the client/policy owner.  This win and one less log to
is a process that many of you have asked us to change and it will offer significant cost and time maintain in your branch
savings for you.  You’ll no longer be required to obtain an annuity delivery receipt; the insurance
carrier will now be responsible for documenting contract delivery.  but this will still be in
  effect until March 1st.
Note:
Each insurance carrier has different protocols for what they do or do not send to the writing agent in
tandem with sending the contract directly to the policy owner.  As the effective date nears, LPL will
update the Resource Center with details on what you can expect from each carrier for new business
going forward. 
 

Exchange-Traded Products Training Updates - Effective February 1

Beginning February 1, we are updating our training requirements surrounding exchange-traded products.

Current Policy:
If you hold leveraged and/or inverse-leveraged exchange-traded products (ETPs) in a client’s advisory account, you’re required to
complete LPL’s ETP online training module every three years.  The current policy does not apply to leveraged or inverse-leveraged
ETPs held in brokerage accounts.

New Policy Effective February 1:
We are expanding the current policy to also cover brokerage accounts.  Going forward, if a client holds leveraged and/or inverse-
leveraged ETPs in an advisory or brokerage account(s), regardless of how it was acquired (e.g. transferred, etc.), you’ll need to
complete the ETP training course.  You’ll be excluded from this training requirement if you hold these positions exclusively in your
personal advisory or brokerage accounts (must be a single person registration in your name only).  Training will need to be taken
only one time, unless the training changes substantially in the future.  If you are required to take this training, you will receive a
notification via email.  Please note, this change only impacts the training portion of the policy.

DEPARTING ADVISORS AND CLIENT INFORMATION

As part of LPL’s Consumer Privacy Notice, clients are informed of their ability to opt out

of allowing advisors who are departing from LPL to take their client information with

Shaun Says! them. We’ve created updated materials about this process and a form clients can use if

If or when you have a client open up a they would like to allow their advisor to take their information upon departure.
new account with you and they live in
one of the three states listed, you should  
If you have clients in California, North Dakota, and Vermont, they’re considered

make sure that you have your client sign automatically opted out.  To make the process easier for clients in these three states to

the privacy choice consent form provide their consent to opt in, we’ve updated our Privacy Choice Consent Form

(formerly Revocation of Privacy), which is now available on the Resource Center. This

form should be provided to those clients to document their consent for you to maintain

their client records should you

depart LPL. The form can also be used by clients who are not residents of the above

mentioned states but need to reverse their prior written decision to opt out.

A NOTE FROM THE AUTHOR

Thank you for taking the time to read this article, we want to continue giving you timely information to help you in
your practice and to keep you in great compliance and moving onward and upward. If there is anything I can do to
assist you or your team, please don’t hesitate to reach out and I am always here to help.
Best, Shaun Tessmer

FOCUS NEWSLETTER 6

IMPRINTMAGAZINE.COM E X E M P L AFORTFROENC UDSS

SETTING EVERY COMMUNITY
UP FOR RETIREMENT
ENHANCEMENT (SECURE)
ACT

As Enacted on December 20, 2019 · Prepared for LPL by
Davis & Harman LLP

FOCUS NEWSLETTER 7

You won't
want to miss

this!

MID WINTER CONFERENCE

FEBRUARY 26-28, 2020

THE BLACKSTONE HOTEL
636 S MICHIGAN AVE
CHICAGO, IL 60605

EXEMPLAR FINANCIAL NETWORK
Helping Advisors Prosper since 1990

We want you to send us your EXEMPLA#RMFoInNtAhNlyCMIAoLtiNvaEtTioWnORK
success stories!

We want to hear all about how you successfully snagged
that client, increased your social media following, or

received the compliment of the century from your client!
We want to hear all of it!

Send us your success stories to be proudly shared
among your peers! Please send to Lauren Nikolic at

[email protected].

ADVISOR
SPOTLIGHT

WE ARE LOOKING FOR
ADVISORS INTERESTED IN
WRITING AN ARTICLE TO

BE FEATURED IN THE
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If you'd like to write an article for the
newsletter, please contact Lauren
Nikolic at [email protected].