Janney has partnered with Advisor Credit Exchange, LLC, (“ACE”), a third-party technology company that operates a platform known as the Advisor Credit Exchange (the “Advisor Credit Exchange”).  The Advisor Credit Exchange facilitates the ability of Janney Financial Advisors to make loan options available to Janney clients through third-party lenders participating in the Advisor Credit Exchange (each a “Lender”). 

Janney is making this information publicly available to provide some basic facts about the Advisor Credit Exchange and possible lending options available through the Lenders.  Please consult your Financial Advisor regarding any questions or concerns you may have about the Advisor Credit Exchange.

Subject to creditworthiness, the Advisor Credit Exchange currently has the ability to create loan opportunity sheets for (1) unsecured (personal) loans; (2) residential real estate loans; and (3) securities-based loans. Additional information on these types of loans is available below in the section entitled “Loan Options Available through the Advisor Credit Exchange.”  Janney is not a lender and does not take or accept any loan applications, offer or negotiate loan terms, make credit decisions for loans, issue loan commitments or rate lock agreements or originate, make or service loans. Janney does not solicit residential real estate loan applications or assist in filling out applications.

Any loan application you make would be with a Lender and not Janney. Janney does not make any representations or warranties regarding the rates, fees, or other loan terms offered by participating Lenders for its services in connection with the lending platform and does not charge any related fees to consumers. Rates are subject to change based on the Lender. Any interest and additional fees paid to the Lenders in connection with the loan are separate from, and in addition to, the fees that you pay Janney for services on your Janney account(s). Janney does not endorse, recommend, or provide advice on any particular Lenders or loan products. The services provided by Janney are a tool that consumers may use among other resources to compare loans. Janney does not guarantee that you will be approved for a loan or receive the terms shown below. Lenders may approve or decline the application. If your application is approved for a loan, Janney may be apprised of such information by the Advisor Credit Exchange.

For unsecured loans and securities-based loans, Janney will receive a one-time compensation payment of 25 bps of the loan amount for each loan that we refer to the Advisor Credit Exchange. There is a financial incentive for Janney to utilize the Advisor Credit Exchange, however you are not required to use these services and can utilize other resources and tools to compare and negotiate, potentially more favorable, lending arrangements. Janney does not share this compensation with its Financial Advisors, and therefore, Janney Financial Advisors do not have a financial incentive if one Lender is selected over another. Janney is compensated for marketing the Advisor Credit Exchange.

Lenders are solely responsible for loan terms and underwriting of any loans obtained by consumers.  If, at any point, a dispute should arise between you and the Lender, you should refer to your applicable loan agreement for further details.  Janney is not responsible for consumer satisfaction with any Lender or loan obtained through the Advisor Credit Exchange. 

Loan Options Available Through the Advisor Credit Exchange

1.     Residential Real Estate Loans 

A fixed-rate mortgage is a home loan with a fixed interest rate for the entire term of the loan. Once locked-in, the interest rate does not fluctuate with market conditions. Borrowers who want predictability and those who tend to hold property for the long term tend to prefer fixed-rate mortgages. Most fixed-rate mortgages are amortized loans. In contrast to fixed-rate mortgages, there exist adjustable-rate mortgages (ARM), whose interest rates change over the course of the loan. An adjustable-rate mortgage employs a floating rate over part or all of the loan's term, rather than having a fixed interest rate throughout. The variable rate will most often utilize an index rate, such as LIBOR or the Fed funds rate, and then add a loan margin on top of it. ARMs are subject to interest-rate risk, or the possibility that the interest rate will change. After the initial term, the interest rate for this type of mortgage adjusts to reflect current market conditions. When rates go up, ARM borrowers can expect to pay higher monthly mortgage payments. If a consumer defaults on a residential real estate loan, there is a possibility of foreclosure. Consumers should be aware of the potential impact of rising interest rates on their loans and of any potential tax consequences associated with a residential loan.  Proceeds from residential real estate loans cannot be used to purchase securities. 

2.     Unsecured Loans

Unsecured loans or personal loans are supported only by the borrower’s creditworthiness, rather than by collateral, such as property or other assets. Unsecured loans are riskier than secured loans for lenders, so they typically have higher interest rates. If a borrower defaults on an unsecured loan, the lender may commission a collection agency to collect the debt or take the borrower to court. Proceeds from unsecured loans cannot be used to purchase securities.

3.     Securities-Based Loans

A line of credit backed by securities, such as a securities-based loan, may not be suitable for all clients and investors. Borrowing on securities-based lending products and using securities as collateral may involve a high degree of risk including unintended tax consequences and the possible need to sell your holdings, which may lead to a significant impact on long-term investment goals. Market conditions can increase any potential for loss. If the market turns against the client, they may be required to quickly deposit additional securities and/or cash in the account(s) or pay down the loan to avoid liquidation. The securities in the Pledged Account(s) may be sold to meet the collateral calls and Janney may sell the client’s securities without contacting them. Pledged Accounts are the accounts assigned to collateralize the loan. A client is not entitled to choose which securities or other assets in their account are liquidated or sold to meet a collateral call. A client may not be entitled to an extension of time on a collateral call. Increased market interest rates could also affect the applicable rate index that applies to your line of credit causing the cost of the credit line to increase significantly. The interest rates charged on bank lines of credit backed by securities are determined in part by the line of credit amount as outlined in the Loan Agreement.

The proceeds from a line of credit backed by securities cannot be (a) used to purchase or carry securities; (b) deposited into a Janney investment or trust account.

For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.

To learn about the professional background, business practices, and conduct of FINRA member firms or their financial professionals, visit FINRA’s BrokerCheck website: http://brokercheck.finra.org/