James Raymond Lin

If you open a brokerage account, you will pay a transaction based fee, generally called a commission, every time you buy or sell an investment. When we trade with you on a principal basis, we will charge a mark-up or mark-down that will be reflected in the price and may earn a dealer spread (i.e., the difference between the price we paid for a security and what you pay). If you purchase a mutual fund with a sales load, the sales load will be deducted from the amount that will be invested in the fund. Mutual funds, variable annuities and unit investment trusts impose additional fees that will reduce the value of your investments over time. You will also pay fees for custodial, administrative, and other services provided for your account. You will pay more commissions when there are more trades in your account. We, therefore, have an incentive to encourage you to trade often.

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.

You can obtain additional information about our fees and costs in our Brokerage Relationship and Disclosure Guide, Advisory Brochure and Wrap Fee Brochure.

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. When we act as your investment adviser, we are a fiduciary. Here are some examples to help you understand what this means.

Proprietary Products: We (or our affiliates) will earn higher compensation when you invest in alternative investment products that we (or one of our affiliates) issue, manage, or sponsor. This creates an incentive for us to recommend those alternative investment products over others to earn greater compensation.

Third-Party Payments: We receive payments from third-party product sponsors and managers (or their affiliates) when we recommend or sell certain products to you, including 12b-1 fees on mutual funds (which we credit back to advisory clients, except for certain consulting arrangements), and system support or network fees (which we retain). Although we do not charge third-party managers for participating in our advisory programs, the managers can make payments to us for sales and marketing materials and training. This creates an incentive for us to recommend (or to invest your assets in) products of third parties that pay us over products of third parties that do not pay us, or pay us less. We also receive a fee from each deposit bank that participates in our cash sweep program.

Revenue Sharing: We receive payments from the sponsors of UITs and hedge funds on our platform. We therefore have an incentive to recommend that you choose UITs or hedge funds on our platform.

Principal Trading: We can act as a principal for transactions in your brokerage account, which means you buy or sell securities to or from us. We earn markups, markdowns, and dealer spreads on principal trades. We therefore have an incentive to execute your trades as principal instead of trading other market participants.

You can obtain additional information about our conflicts of interest in our Brokerage Relationship and Disclosure Guide, Advisory Brochure (Item 4 and Item 10) and Wrap Fee Brochure (Item 4 and Industry Affiliations).

Your financial professional receives a percentage of advisory fees and brokerage commissions paid to us. The percentage of the advisory fee varies among financial professionals depending on the level of revenue generated by a financial professional. Financial professionals can discount the advisory fee and brokerage commission charged within certain guidelines. Providing a discount reduces the fees or commissions payable to the financial professional depending on the size of the discount. We offer a variety of products in brokerage accounts. The sale of certain of these products results in payments to us that are not shared with financial professionals. The receipt of these payments creates a conflict for us to the extent that the selection of available products is determined by the receipt of these payments. The sale of certain products pay a financial professional more than other products. A financial professional has a conflict of interest to the extent that he or she has a financial incentive to recommend products with a higher payout. See the Regulation Best Interest disclosure for a more comprehensive discussion of financial advisory compensation for brokerage services.