In a profession based on objective advice, true independence offers many choices intended to benefit you, the client. Your choice of an independent financial professional is the first step in getting recommendations with impartial guidance based directly on your needs and goals.
Objective advice on achieving your financial goals may be best delivered by an independent financial professional. The independent financial professionals at Sterling Financial Group are not employees of an investment or financial services firm—they are independent business owners. We have the freedom to structure our business in a manner that best serves our clients. Sterling Financial utilizes a broker/dealer who provides services that include processing investment business, marketing assistance, practice management, and education. In addition, a broker/dealer holds responsibility for regulatory compliance and adherence to securities laws.
There are many different types of firms for Sterling Financial to consider in choosing a broker/dealer. You may be familiar with broker/dealers that are subsidiaries of conglomerates such as commercial banks, investment banks, and investment companies. Independent broker/dealers are different from such firms because they generally do not underwrite securities, they do not create research, and they do not engage in investment banking.
An independent broker/dealer allows financial professionals to offer nonproprietary products, such as mutual funds or life insurance, from a wide variety of companies. Sterling Financial has chosen to work with an independent broker/dealer in order to offer you impartial investment advice compensated in the form of fees, commissions, or both.
Just as you have the opportunity to choose your financial professional, we in turn choose our independent broker/dealer. Sterling Financial has chosen Commonwealth Financial Network® as our independent broker/dealer. Commonwealth serves your best interests because they, too, are independently owned, allowing Sterling Financial the freedom to offer you objective guidance. This means we are not forced to sell proprietary products or meet any sales quotas, and, therefore, the professionals at Sterling Financial are not pressured or distracted by corporate interests and can focus on what is best for you and your financial goals.
Commonwealth also believes in the entrepreneurial spirit of Sterling Financial. Instead of asking our financial professionals to fit into a mold, Commonwealth empowers us with a vast menu of compliance-friendly programs, products, and services. This enables your financial professional to customize an investment strategy designed to meet your unique long-term financial needs.
An independent broker/dealer can choose a clearing firm to provide the trade execution, clearing, custody, and other related services for clients of their financial professionals. Clearing relationships are typical throughout the industry and allow your financial professional to focus on helping you achieve your investment goals while taking advantage of the clearing firm’s safeguards for the physical protection of your assets.
Securities regulations are designed to protect clients’ funds and securities when they are in custody at a registered broker/dealer. The Securities Exchange Commission (SEC) is an agency of the U.S. government that oversees the Financial Industry Regulatory Authority (FINRA), which in turn oversees broker/dealers, clearing firms, and your financial professional. Both the SEC and FINRA require members to comply with various rules intended to minimize the chance of financial failure and maximize the protection of your assets. The SEC also requires a registered broker/dealer to segregate fully paid, investor-owned assets—meaning that if the broker/dealer fails, investors’ assets will remain safe, separate from the broker/dealer’s assets.
Client assets are protected by the Securities Investor Protection Act, which is administered by the Securities Investor Protection Corporation (SIPC). SIPC is a nonprofit, nongovernment membership corporation funded by member broker/dealers. SIPC’s primary role is to return funds and securities to investors if the broker/dealer holding these assets becomes insolvent. SIPC does not insure against the rise and fall of the market but does insure your funds against theft, up to $500,000 in securities.
- Now, more than ever, a client wants peace of mind when it comes to the safety of financial assets.
- A registered representative is an independent business owner who provides financial guidance to their clients and is typically paid a commission when you purchase a financial product.
- An Investment Adviser Representative (IAR) is an independent business owner who provides financial guidance to their clients and is generally paid a fee for either managing assets, giving advice or both.
- A broker/dealer processes the commission business of registered representatives licensed with the firm and holds responsibility for regulatory compliance and adherence to securities laws.
- A Registered Investment Adviser (RIA) processes the fee-based business of IARs licensed with the firm and holds responsibility for regulatory compliance and adherence to securities laws.
- National Financial Services LLC (NFS)* and select firms provide the trade execution, clearing, custody, and other services for securities and related transactions.
- These include mutual funds, managed accounts, stocks, bonds, and the like.