LSIA, A REGISTERED INVESTMENT ADVISOR
RELATIONSHIP SUMMARY (JUNE 30, 2020)
LSIA is registered as an investment adviser with the Securities and Exchange Commission (SEC). Investment advisers provide different services and charge different fees from broker-dealers. It is important for retail investors to understand the differences. The SEC has a website, www.investor.gov/CRS, which provides free and simple tools for researching firms and financial professionals, plus educational materials about investment advisers, broker-dealers, and investing.
WHAT INVESTMENT SERVICES AND ADVICE CAN YOU PROVIDE ME?
We provide investment advisory services to retail investors who are clients of LSIA Wealth, a division of LSIA, and to retail clients of Robert W. Baird & Co. (Baird) and CliftonLarsenAllen LLP (CLA), whose accounts are sub-advised by our other division, LSIA Institutional. If you are an LSIA Wealth client, our investment advisory services include portfolio management and financial planning. That means we meet with you to consider your specific goals and objectives and develop a customized investment strategy for you. By contract, you grant us the authority to buy and sell securities for you at any time and in any manner that we believe is consistent with that strategy.
If you are a Baird or CLA retail client with an account sub-advised by LSIA Institutional, you are not a client of LSIA and we have no direct contact with you. Baird or CLA, as applicable, selects the strategy for your account and provides us with information and direction needed to ensure the way we manage it is appropriate for your individual circumstances. We have authority to buy and sell securities in your account at any time and in any manner that we believe is consistent with your selected strategy.
Each of the strategies we offer to retail investors involves investment in one or more of the following types of securities that trade in the United States: stocks, bonds, mutual funds and/or exchange-traded funds. For each strategy, we will make modifications to accommodate reasonable restrictions on the types of investments we will make.
All accounts have a designated portfolio manager who is responsible for reviewing and monitoring the account and its underlying securities continuously in accordance with the account’s stated investment objectives and guidelines. For LSIA Wealth clients, portfolio managers periodically schedule in-person or telephone conferences to review these objectives and guidelines, as well as any financial plan developed for that client. For sub-advised LSIA Institutional accounts, the portfolio manager relies on the other investment advisor or investment program sponsor to conduct reviews of objectives and guidelines. For all accounts, in order to assist with day-to-day monitoring of compliance with applicable investment guidelines, we utilize an integrated and automated compliance management system to help identify potential guideline issues caused by trading activity, cash flows, market movements, or other non-volitional events.
All of our strategies typically have a minimum account size of at least $1 million; however, we will accept accounts below applicable minimums based on existing relationships, expectations of growth, and our opinion as to whether we can manage the account in a manner that meets the client’s objectives. Further, we will negotiate lower account minimums for sub-advised strategies.
WHAT FEES WILL I PAY?
At the beginning of each calendar quarter, LSIA Wealth clients will pay us one-fourth of our annual fee, based on the market value of the assets we managed at the end of the previous calendar quarter. If you are a Baird or CLA retail client with an account sub-advised by LSIA Institutional, you will not pay us any fees; rather, we will receive a portion of the compensation you pay to them. Because our fees are based on the size of your account, we have an incentive to encourage you to add assets. In addition to the fees you pay us (or Baird or CLA) directly, you will also indirectly pay the costs associated with any trading we do in your account, as well as your share of the operating expenses of any mutual fund or exchange-traded fund (ETF) in which you invest. Depending on the nature of your account, there may be additional fees you pay to your broker or custodian, such as maintenance or other custody fees.
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
WHAT ARE YOUR LEGAL OBLIGATIONS TO ME WHEN ACTING AS MY INVESTMENT ADVISER? HOW ELSE DOES YOUR FIRM MAKE MONEY AND WHAT CONFLICTS OF INTEREST DO YOU HAVE?
When we act as your investment adviser, we have to act in your best interest and not put our interests ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are some examples to help you understand what this means.
First, we routinely recommend clients use Charles Schwab & Co. as their custodian. While we receive no compensation from Schwab for such recommendations, we do receive a number of free services as a result of being a large Schwab user. Additionally, some of our LSIA Wealth portfolio managers earn a portion of their bonus compensation based on net new assets brought to the firm. Read more about our conflicts of interest and how we manage them in Items 10, 12, 14 and 17 of our Brochure.
HOW DO YOUR FINANCIAL PROFESSIONALS MAKE MONEY?
All financial professionals receive a salary plus an annual bonus. Bonuses are not formulaic; rather, they are based on a variety of factors, including overall firm profitability, as well as individual financial and non-financial contributions to the firm. LSIA Wealth portfolio managers also receive quarterly bonus compensation based on the amount of new LSIA assets under management that were added during the period and attributable to the portfolio manager’s relationships.
DO YOU OR YOUR FINANCIAL PROFESSIONALS HAVE LEGAL OR DISCIPLINARY HISTORY?
No. Verify this information at www.investor.gov/CRS for a free and simple search tool to learn more.
Investors can find out more about LSIA by CLICKING HERE to read our entire Brochure. It contains important information about our advisory services. Call 248-430-2650 for up-to-date information about us and to request a copy of our Relationship Summary. You can also visit us at: www.myLSIA.com/Form CRS.