How Your NFS Brokerage and Advisory Accounts are Protected

 
National Financial Services, LLC [Member NYSE, SIPC]

National Financial Services, LLC (NFS), a Fidelity Investments ® company, serves as the custodian for all clients who elect to direct their investment advisory and brokerage transactions through Financial Planning Hawaii (FPH) and J.W. Cole Financial, Inc. (JWC) and J.W. Cole Advisors, Inc. (JWCA). Established in 1983, NFS is one of the nation’s largest providers of brokerage services (Source: www.nationalfinancial.com ).  NFS’ parent company, Fidelity Investments, is one of the world’s largest financial services providers with custodied assets of more than $2.7 trillion as of September 30, 2008  (Source: www.nationalfinancial.com ).  As custodian for JWC brokerage and JWCA investment advisory accounts, NFS is responsible for: 

  • The execution, clearance, and settlement of securities transactions
  • Preparing and sending periodic statements of client accounts and transaction confirmations
  • Custody (or safekeeping), receipt, and delivery of funds and securities
  • The extension of margin credit upon approval

J.W. Cole Financial, Inc. [Member FINRA, SIPC]

J.W. Cole Financial, Inc. (JWC) serves as a registered broker-dealer and J.W. Cole Advisors, Inc. serves as a registered investment advisor. Through its relationship with JWC/JWCA, Financial Planning Hawaii offers clients wrap-fee advisory and brokerage account business. In this capacity, JWC/JWCA serves the following functions:

  • Opening, approving, and monitoring client accounts
  • Repond to any customer complaints that may arise Ensuring that FPH and its personnel maintain compliance with all regulatory authority requirements Securities Investor Protection Corporation (SIPC)

Both National Financial Services, LLC (NFS) and J.W. Cole Financial, Inc. (JWC) are members of the Securities Investors Protection Corporation (SIPC), which was created in 1970 to protect customers of member broker/dealer firms in case of broker/dealer liquidation. A nonprofit membership corporation, SIPC is funded by broker/dealers, and protects their membership by law. To cover client assets, the SIPC fund is supported by $1 billion line of credit with a bank consortium Borrowing power of up to $1 billion from the U.S. Treasury through the SEC. Securities in accounts carried by NFS are protected in accordance with SIPC up to $500,000 (including cash claims up to $100,000). These limits are on a per-customer basis, as defined in the Securities Investor Protection Act. Most types of securities held in a brokerage account at NFS are protected, including stocks, bonds, notes, certificates of deposit (CDs), and mutual funds. For more detailed information, please see www.sipc.org .

Note: SIPC coverage does not extend to assets held in FDIC insured bank sweep deposits. Protection for these deposits is afforded by FDIC. For information on FDIC coverage limits, please see www.fdic.gov . Excess SIPC Protection To supplement its SIPC coverage National Financial Services (NFS) has arranged for additional protection for cash and covered securities from Lloyds of London, which currently has an A (Excellent) rating from insurance company ratings firm A.M. Best and A+ (Strong) ratings with “Stable Outlook” from Fitch Ratings and Standard & Poors*. This additional protection covers up to an aggregate loss limit of $1billion for all customer claims, of which $1.9 million may cover cash awaiting reinvestment at the individual account level. This is the highest level of excess SIPC coverage currently available. It is important to note that excess SIPC protection would only apply after SIPC protections were exhausted. For more information on Lloyd’s of London, please go to www.lloyds.com. Neither Lloyd’s coverage nor SIPC coverage protects against a decline in the market value of securities.

* Ratings are as of December 31, 2008 and are subject to change without notice.

Financial Advisers of America [Member FINRA, SIPC]

Financial Advisers of America (FAA) serves as a dual-registered broker-dealer/registered investment advisor. Through its relationship with FAA, Financial Planning Hawaii offers clients wrap-fee advisory and brokerage account business. In this capacity, FAA serves the following functions:

  • Opening, approving, and monitoring client accounts 
  • Repond to any customer complaints that may arise
  • Ensuring that FPH and its personnel maintain compliance with all regulatory authorityrequirements

 Securities Investor Protection Corporation (SIPC)

Both National Financial Services, LLC (NFS) and Financial Advisers of America (FAA) are members of the Securities Investors Protection Corporation (SIPC), which was created in 1970 to protect customers of member broker/dealer firms in case of broker/dealer liquidation. A nonprofit membership corporation, SIPC is funded by broker/dealers, and protects their membership by law. To cover client assets, the SIPC fund is supported by

  • $1 billion line of credit with a bank consortium
  • Borrowing power of up to $1 billion from the U.S. Treasury through the SEC.

Securities in accounts carried by NFS are protected in accordance with SIPC up to $500,000 (including cash claims up to $100,000). These limits are on a per-customer basis, as defined in the Securities Investor Protection Act. Most types of securities held in a brokerage account at NFS are protected, including stocks, bonds, notes, certificates of deposit (CDs), and mutual funds. For more detailed information, please see www.sipc.org.

Note: SIPC coverage does not extend to assets held in FDIC insured bank sweep deposits. Protection for these deposits is afforded by FDIC. For information on FDIC coverage limits, please see www.fdic.gov.

Excess SIPC Protection

To supplement its SIPC coverage National Financial Services (NFS) has arranged for additional protection for cash and covered securities from Lloyds of London, which currently has an A (Excellent) rating from insurance company ratings firm A.M. Best and A+ (Strong) ratings with “Stable Outlook” from Fitch Ratings and Standard & Poors*. This additional protection covers up to an aggregate loss limit of $1billion for all customer claims, of which $1.9 million may cover cash awaiting reinvestment at the individual account level. This is the highest level of excess SIPC coverage currently available. It is important to note that excess SIPC protection would only apply after SIPC protections were exhausted. For more information on Lloyd’s of London, please go to www.lloyds.com. Neither Lloyd’s coverage nor SIPC coverage protects against a decline in the market value of securities.

* Ratings are as of December 31, 2008 and are subject to change without notice.