Broker Dealer, Custodian, & Investment Company

How We Work with Broker Dealers, Custodians, and Investment Companies to Steward Your Wealth

The world of financial services is more than a little complex. With a multitude of organizations, overlapping services, and an alphabet soup of acronyms, it can sometimes be hard to figure out just who does what. As your financial advisors, we have relationships with several different companies, leveraging each for their unique strengths to serve you to the best of our ability. In particular, understanding the distinct roles of broker-dealers, custodians, and investment companies is crucial to understanding just who does what for you and your investments.

Broker-Dealer: United Planners

A broker-dealer - like United Planners - provides financial advisors with essential services that enable them to operate effectively and compliantly:

Compliance and Regulation: United Planners, as a broker-dealer, ensures that financial advisors comply with both industry standards and regulatory requirements. They assist with documentation, reporting requirements, and other regulatory processes.
Product Access: Broker-dealers provide financial advisors with access to a broad array of financial products including stocks, bonds, mutual funds, and insurance products. This wide range of options helps advisors tailor their investment strategies to meet the diverse needs of our clients.
Operational Support: United Planners handles many of the back-office functions that are vital for the smooth operation of our advisory services including record keeping and reporting. This support allows advisors to focus more on client service and less on administrative tasks.
Training and Education: Continuous education is crucial when working in finance. Broker-dealers often provide training and educational resources that help advisors stay updated with the latest financial products, market trends, and regulatory changes.

Custodian: SEI

A custodian is a specialized financial institution that holds customers’ investments for safekeeping. Since they are responsible for the safety of assets and securities that may be worth billions of dollars, custodians are typically large and reputable banks or financial services companies - like SEI - and provide a variety of important services:

Holding the Investments: Their most basic (and most important) function is maintaining custody of the investment assets. For financial advisors, this is absolutely essential as we work to ensure all client investments are secure and well-managed.
Settlement of Transactions: When we execute trades on behalf of our clients, the custodian is responsible for the settlement of these transactions. This involves the transfer of funds and securities to ensure that trades are completed accurately and timely.
Record Keeping and Reporting: Custodians provide comprehensive record-keeping services, which include tracking the ownership of assets, reporting transaction histories, and providing regular account statements to clients.
Tax Support: They assist in tax-related processes by providing detailed tax reporting services such as generating necessary forms and documents related to dividends, interest, and capital gains.
Technology and Tools: Modern custodians - like SEI - offer digital platforms that integrate both portfolio management and performance analysis. These tools help us manage investments more effectively and efficiently.

Investment Companies

Investment companies offer a variety of investment products, strategies, and educational resources that advisors can use in client portfolios. As independent advisors, we have access to an entire world of investment options and any number of investment companies:

Diverse Investment Products: While some investment companies focus solely on specific areas of the market, most established firms offer a broad range of investment products, including mutual funds and ETFs. These products enable us to diversify our clients’ portfolios across multiple asset classes, sectors, geographical regions, and investment strategies.
Research and Analysis: These companies employ sophisticated and comprehensive research teams that analyze market trends, economic data, and individual securities. This research is shared with financial advisors, giving us a deeper insight into market conditions and helping us make informed investment decisions on behalf of our clients.
Educational Resources: Investment companies often provide educational content that can help financial advisors stay informed about the latest financial products, market conditions, and investment strategies. These resources and insights can then be passed on for our clients to benefit from as well.

Investing involves risk. No investment strategy can guarantee positive results. Loss, including loss of principal, may occur. Material discussed is meant to provide general information and it is not to be construed as specific investment, tax or legal advice. Keep in mind that current and historical facts may not be indicative of future results. Diversification is an investment strategy that can help manage risk within a portfolio, but it does not guarantee profits or protect against loss in declining markets.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. (C) Twenty Over Ten