John Kevin Serocke

Our Investment Advisory Services
In most of our investment advisory relationships, you are charged an agreed-upon percentage of the assets held in your account, also known as an asset-based fee, each quarter. The standard fee varies by advisory program and covers the cost of our advice, custody of assets, manager fees (if applicable), and execution of most transactions. Because the fee is typically based on the value of your account, we have an incentive to encourage you to increase the assets in your account.

We also offer advisory programs with other fee structures. In one program, you elect to pay for our services with either an asset-based fee or a commission for each transaction. Consulting services are available for a one-time flat fee, an ongoing flat fee, or an asset-based fee. Financial planning services are subject to a one-time flat fee, which does not cover the cost to implement the plan.

Depending on the level of trading in your account, paying an assetbased fee could cost more or less than separately paying for each transaction.

An Advisory Platform Fee applies to certain clients. Clients subject to the Advisory Platform Fee will be eligible to receive the Advisory Account Credit.

Other Fees

You will bear a proportionate share of an investment product’s expenses, such as investment management fees that are paid to the product’s adviser, which may be an affiliate of ours, and distribution, shareholders services or other fees paid to us and our affiliates. These expenses are an additional expense to you and not covered by the fees or charges described above; rather, they are embedded in the price of the investment product.

Other operational and service fees may be charged as outlined in the Annual and Operational Fee Schedule.

You will be charged interest on the amount borrowed through margin loans and securities-based loans.

When we provide you with a recommendation as your broker-dealer or act as your investment adviser, we have to act in your best interest and not put our interest 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 recommendations and investment advice we provide you. Here are some examples to help you understand what this means:

Proprietary Products: We and our affiliates receive additional compensation from products we issue, sponsor, or manage, known as proprietary products. This creates an incentive for us to recommend proprietary products over third-party products.

Third-Party Payments: Some third-party product providers pay us additional compensation as an incentive to sell their products. This creates an incentive for us to recommend third-party product providers that pay us additional compensation over those that do not pay additional compensation or that pay smaller amounts of additional compensation.

Revenue Sharing: Some managers or sponsors of products or other intermediaries share with us the revenue they earn on products, known as revenue sharing. This creates an incentive for us to recommend products where we receive revenue sharing over products for which we do not receive revenue sharing or receive smaller revenue sharing payments. In applicable advisory programs, however, any such payments are included in the Advisory Account Credit.

Principal Trading: Where permitted under applicable law, we trade certain products on a principal basis, meaning you are buying from or selling to our firm’s inventory account. When we execute transactions as principal, we earn a mark-up or mark-down from the then-prevailing market price of the security.

In addition, we may make a profit (or a loss) on the difference between the price at which we purchased the security and the price at which we sell it to you. As a result, we may make more on a principal transaction than on an agency transaction.

The amount of compensation your financial advisor receives is dependent upon several factors: the amount of client assets they service; the time and complexity required to meet a client’s needs; the products they sell and associated commissions; and revenue the firm earns from advisory services and recommendations. Financial advisors may also be eligible for annual or ongoing bonuses and deferred compensation awards. These are often based upon a variety of factors that could include reaching certain production levels, tenure with the firm, asset gathering, referrals to affiliates or other targets, as well as compliance with our policies and procedures and meeting best business practices.

Typically, a financial advisor’s payout schedule increases with revenue generation and asset levels.

Some financial advisors and financial professionals are compensated by way of a salary and are eligible for an annual or ongoing bonus at the discretion of management. Financial advisors may receive financial incentives and assistance from the firm as part of joining the firm. The incentives and assistance may include optional loans which is common in the financial services industry. Noncash compensation is provided to most financial advisors in the form of credits toward business expense accounts and recognition titles.

They may also attend educational meetings and recognition trips sponsored by external vendors and affiliates, such as mutual fund companies, insurance carriers, or money managers. Financial advisors could also receive promotional items, meals, entertainment, and other noncash compensation from product providers. The receipt of noncash compensation and other benefits from product providers creates an incentive for financial advisors to recommend those providers' products over other products.

In an investment advisory relationship, financial advisors receive a percentage of the ongoing fees you pay. As a result, they have an incentive to recommend that you invest more assets in an advisory program, and depending on your anticipated level of trading activity, can have an incentive to recommend advisory programs instead of brokerage services when you engage in a limited number of transactions.

Our Brokerage Services

In a brokerage relationship, you are charged for each trade you make, also known as transaction-based charges. These transaction-based charges can include commissions, commission equivalents, sales charges, mark-ups, mark-downs, and dealer spreads, which differ based on the product purchased, size of the transaction, overall value of your account, and frequency of trading activity in your account. You will pay higher total transaction-based charges when there are more trades in your account. Therefore, we have an incentive to encourage you to trade more often.

The fees you pay are higher when you work with a financial advisor than when you have a WellsTrade account.

As stated in your Client Agreement, you will be charged annual account fees and custodial fees that are based on the number and type of accounts you hold in your household.

Other Fees

You will bear a proportionate share of an investment product’s expenses, such as investment management fees that are paid to the product’s adviser, which may be an affiliate of ours, and distribution, shareholders services or other fees paid to us and our affiliates. These expenses are an additional expense to you and not covered by the fees or charges described above; rather, they are embedded in the price of the investment product.

Other operational and service fees may be charged as outlined in the Annual and Operational Fee Schedule.

You will be charged interest on the amount borrowed through margin loans and securities-based loans.

When we provide you with a recommendation as your broker-dealer or act as your investment adviser, we have to act in your best interest and not put our interest 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 recommendations and investment advice we provide you. Here are some examples to help you understand what this means:

Proprietary Products: We and our affiliates receive additional compensation from products we issue, sponsor, or manage, known as proprietary products. This creates an incentive for us to recommend proprietary products over third-party products.

Third-Party Payments: Some third-party product providers pay us additional compensation as an incentive to sell their products. This creates an incentive for us to recommend third-party product providers that pay us additional compensation over those that do not pay additional compensation or that pay smaller amounts of additional compensation.

Revenue Sharing: Some managers or sponsors of products or other intermediaries share with us the revenue they earn on products, known as revenue sharing. This creates an incentive for us to recommend products where we receive revenue sharing over products for which we do not receive revenue sharing or receive smaller revenue sharing payments. In applicable advisory programs, however, any such payments are included in the Advisory Account Credit.

Principal Trading: Where permitted under applicable law, we trade certain products on a principal basis, meaning you are buying from or selling to our firm’s inventory account. When we execute transactions as principal, we earn a mark-up or mark-down from the then-prevailing market price of the security.

In addition, we may make a profit (or a loss) on the difference between the price at which we purchased the security and the price at which we sell it to you. As a result, we may make more on a principal transaction than on an agency transaction.

The amount of compensation your financial advisor receives is dependent upon several factors: the amount of client assets they service; the time and complexity required to meet a client’s needs; the products they sell and associated commissions; and revenue the firm earns from advisory services and recommendations. Financial advisors may also be eligible for annual or ongoing bonuses and deferred compensation awards. These are often based upon a variety of factors that could include reaching certain production levels, tenure with the firm, asset gathering, referrals to affiliates or other targets, as well as compliance with our policies and procedures and meeting best business practices.

Typically, a financial advisor’s payout schedule increases with revenue generation and asset levels.

Some financial advisors and financial professionals are compensated by way of a salary and are eligible for an annual or ongoing bonus at the discretion of management. Financial advisors may receive financial incentives and assistance from the firm as part of joining the firm. The incentives and assistance may include optional loans which is common in the financial services industry. Noncash compensation is provided to most financial advisors in the form of credits toward business expense accounts and recognition titles.

They may also attend educational meetings and recognition trips sponsored by external vendors and affiliates, such as mutual fund companies, insurance carriers, or money managers. Financial advisors could also receive promotional items, meals, entertainment, and other noncash compensation from product providers. The receipt of noncash compensation and other benefits from product providers creates an incentive for financial advisors to recommend those providers' products over other products.

In a brokerage relationship, financial advisors receive a percentage of the fees, charges, and certain other revenue our firm collects from transactions in your account. As a result, financial advisors have an incentive to provide brokerage recommendations that result in selling more investment products and services, as well as investment products and services that carry higher fees and charges.