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Investment Broker v/s Registered Investment Advisor - What's the Difference?

A Registered Investment Advisor (RIA) has a fiduciary duty to place a client's interests ahead of his own. Brokers have no such obligations. A broker (or "Registered Representative") is essentially a sales agent-and rather than your interests coming first, a broker's first duty is to the brokerage firm he/she represents. A broker is encouraged to sell his firm's products- which may not always be your best buy-and not always be in your best interests. With a broker, you may not be offered the most economical fee/commission payment option, or fees might be even disguised. Brokers do not always clearly describe themselves as brokers but there is a big difference between a Registered Investment Advisor (RIA) and the other similar titles used by brokers such as financial advisor, financial consultant, or financial planner. The nature of a broker's compensation and his relationship with his employer might seriously diminish a client's chance of achieving a fee-efficient, tax-efficient, well-performing portfolio. If a broker takes commissions from the investment that he buys, his decisions might be biased or self-serving. The integrity of advice might be compromised. When sales incentives or job security issues drive a broker's buying decisions, his client's interests might suffer.

A Registered Investment Advisor (RIA) is a fiduciary. A fiduciary is legally required to act in your best interest-and is defined as "a person in a position of authority whom the law obligates to act solely on behalf of the person he represents." Examples of other fiduciaries are executors, trustees, guardians, and officers of corporations. Fiduciaries are not permitted to seek personal benefit from their transactions with those they represent. Are all financial advisors required to be fiduciaries? The answer is, "No." As already explained, unlike Registered Investment Advisors, brokers are not required under the law to act as fiduciaries-their first obligation is to their employers-and not necessarily to you. Legacy Wealth Advisors, Inc. is an independent Registered Investment Advisory firm. Knowing this will help you recognize that we must always act in your best interest.

F.Y.I. - General Information & Disclosure Statement

Legacy Wealth Advisors, Inc. (Legacy) was organized as a Registered Investment Advisor in January 2000. The firm advises individuals, pension plans, businesses, trusts, estates, and charitable organizations in financial matters, for a fee.

Personnel
Danny J. Frazell, EA, CFP
1985-Present
Founder and President of Legacy Wealth Advisors, Inc., a Registered Investment
Advisory firm of Certified Financial Planners™ (CFP®). Legacy serves individual clients as well as employer sponsors and 401K participants , providing workplace financial planning, financial education and investment advice in the following areas:
       Investment Policy Statement construction and Comprehensive Financial Planning including retirement
       planning, estate planning, employee benefit programs, elder care issues, social security disability, trust
       planning, and college education planning.

1978-1998
Founder, of Frazell Bookkeeping and Tax Service, a business tax consulting and bookkeeping firm. The firm specialized in tax compliance issues. Mr. Frazell represented the firm's clients in audit and collection matters before the administrative departments of the Internal Revenue Service. The firm also helped clients implement employee benefit programs including Age Based New Comparability Profit sharing Plans, 401-K plans, Simplified Employee Pension Plans, and Simple IRA Plans.

1970-1978
Mr. Frazell was employed in the computer services industry as a systems analyst and client services representative, teaching
and helping independent public accountants to implement in-house automated "Client Write-up Systems".

Professional Certifications and Designations
CFP® -Certified Financial Planner™ - Awarded by the Certified Financial Planners Board of Standards
EA - Enrolled Agent - Awarded by the United States Treasury, Department of Internal Revenue Service
ATA - Accredited Tax Advisor- Awarded by the Accreditation Council for Accounting and Taxation - Denver Co.

Dennis D. Holzwarth, CPA, CFP
2003 - Present
Registered Investment Advisory Agent with Legacy Wealth Advisors, Inc.

1989 - Present
Founder and President of Wealth Building, Inc. (WBI), a firm of Certified Financial Planners™ (CFP®). WBI provides Comprehensive Financial Planning, financial education in the areas of retirement, estate and business planning.

1989 -2003
Registered Representative with Walnut Street Securities, Inc.

1984 -1989
President of the Studios At Las Colinas and Vice President Operations/Finance of the Dallas Communications Complex. Responsible for the facilities, negotiated building/film studio leases and secured bank financing.

1981 - 1984
Financial and Administrative Vice-President of Cinco Drilling Company of Dallas
Texas. Responsible for all financial and administrative issues, developed and implemented administrative and personnel procedures manuals and company's computerized accounting system.

1978 - 1981
Corporate Treasurer for Higman Towing Company / Manhattan Holdings, Inc. Responsible for preparing the consolidated financial statements of the holding company and its nine operating subsidiaries. Designed and standardized all financial accounting and administrative reporting systems for the companies, and worked with the various company presidents to secure financing and evaluate potential acquisitions, union contract and pension plan proposals.

1976 - 1978
Corporate Controller (Saudi Arabia Operations) for Pool International Responsible for a 23 person staff representing nine countries in all financial and administrative activities.

1973 - 1976
Staff Accountant for Deloitte Haskins & Sells

Professional Certifications and Designations
CFP® - Certified Financial Planner™ - Awarded by the Certified Financial Planner Board of Standards.
CPA -    Certified Public Account - Awarded by the Institute of Certified Public Accountants

Operating Policies and Fees:
Legacy offers financial planning and investment advice to clients, a fee. This fee is charged at a rate of 1/2 of one percent and up to 1.75% of the value of the client's investments under Legacy's advisement.

From time to time, clients may ask Legacy to provide additional services other than investment advice, including (but not limited to) budgeting and bill paying, divorce mediation, credit counseling, insurance planning, estate and inheritance planning, college funding, and general tax planning. Fees for these services are negotiated by Legacy and the client and if billable, may be billed at a rates up to $ 150.00 per hour, depending upon the complexity of the clients needs in these areas. Such fees (if any) are payable upon completion of the engagement.

General Information:
Most clients of Legacy are individuals. However Legacy also works with pension plans, businesses, trusts, estates, and charitable organizations. Legacy provides advice on (but does not necessarily recommend) all types of securities, ranging from government bonds to commodities. Legacy primarily uses the "fundamental analysis" approach to its selection of securities recommended for clients. However, from time to time Legacy may also use other methods of analysis including "technical analysis", "charting", and focused analysis of "cyclical" industries. The sources of such information used by Legacy include (but is not limited to) financial newspapers and trade magazines, research materials prepared by firms not affiliated with Legacy, corporate rating services, annual reports, and company press releases. The foundation on which Legacy's investment advise is based lies in its long term investment philosophy. However, occasionally Legacy may recommend short term investing, short sales, margin transactions, and covered call options where appropriate.

Mr. Frazell may purchase and or sell securities that he recommends to clients, for his own accounts . However, there is no conflict of interest as the securities are widely-held and publicly traded, and he is too small an investor to affect the market. Client accounts and financial plans are reviewed at least annually. All reviews are conducted personally by Mr. Frazell or Mr. Holzwarth. Legacy does not regularly prepare client account performance reports, but may from time to time provide reports to the client which have been generated by "industry software suppliers". Account statements are usually prepared by the client's brokerage firm, mutual fund companies, and/or private money management firms, as appropriate. Legacy does not compensate anyone for referrals of clients or potential clients to Legacy. Legacy does not mandate a minimum account size for its clients.. Legacy does not require "limited discretionary authority" from the client to aid in advising on the client's account, but the client may choose to grant Legacy such athority. For other than Legacy's annual advisory fee (due 1/4 ech quarter of each year), Legacy's is prohibited from withdrawing funds or securities from the clients account. Legacy's does not issue any security buy, sell, and/or exchange orders for the client, usless the client has provided Legacy with limited trading athority on the client's account.

Danny J. Frazell, EA, CFP - President, Legacy Wealth Advisors, Inc.
          119 Executive Way,   Suite 301
          De Soto, TX.   75115