II. WHAT FEES WILL I PAY?
The fees or costs you will pay depend on whether you choose brokerage services, advisory services, or both.
For brokerage services, the primary costs you will incur are transaction-based commissions for securities trades. Depending on the type of investment you select, costs can include up-front commissions for the purchase and sale of securities, syndicate related costs, as well as fees that are charged on an on-going basis for as long as you hold the investment.
If Janney buys a security from you, or sells a security to you from our own account (as “principal”), Janney will mark the price up or down, which is a benefit to us.
Because Janney and Janney Financial Advisors are compensated for each transaction, we have an incentive to encourage you to trade more frequently in brokerage accounts, and in greater amounts, and to trade with Janney as principal because Janney, in some cases, receives more revenue when you do so.
The commissions you pay when buying and selling securities in a brokerage account may be higher or lower than the fees you would pay if you bought or sold those securities in an advisory account, depending on the number of securities transactions, the type of securities purchased or sold, and other variables.
For additional information about the costs associated with our brokerage services, please see Janney’s commission schedule.
For advisory services, you are charged an asset-based advisory fee. Janney generally charges a wrap fee based on a percentage of the assets in your advisory account. A wrap fee is a bundled fee for services such as investment advice, including portfolio management, research, custodial services, reporting and trading and execution. Janney’s asset-based advisory fee does not cover transaction costs incurred when a third-party asset manager uses a broker other than Janney to execute a trade, or custody fees if the assets being advised upon are held in an account with another financial services firm. The total fees you pay with a wrap fee program may be higher than a typical asset-based advisory fee that does not include costs for trading and execution. We may also provide investment advisory services on a non-wrap basis where you pay separate fees for investment advisory services, custody, trading and execution.
Asset-based fees are calculated as a percentage of the value of the assets in your advisory account. The fee rate is set by the agreement between you and your Janney Financial Advisor according to the fee schedule detailed in Janney’s Form ADV Part 2A. We generally bill advisory account fees in advance of each calendar quarter, based on the value of your advisory account on the last business day of the prior quarter. The more assets you invest in your account, generally the more you will pay in fees, and therefore we have an incentive to encourage you to increase your advisory account assets. Janney imposes a minimum advisory account fee. If the calculated asset-based fee, based on account value and fee rate, is less than the minimum account fee applicable to the account, Janney will charge the minimum account fee.
If you discontinue your advisory service, Janney will rebate the asset-based fees you paid for the period of time for which services are no longer provided.
Other Advisory Services
In addition to Janney’s asset-based advisory programs, we offer other advisory services including retirement plan investment advisory services, financial planning services and consulting services for which you may pay an asset-based fee or a fixed fee, which is either a onetime fee or an annual fee, depending on the service. See Managed Account Agreements and Disclosures for more information.
Client accounts held at Janney are subject to various account services charges depending upon the account services selected. These account services include, but are not limited to, delivery of checkbook requests or check disbursements, the processing of outgoing full or partial account transfers, prepayments to cover the cost of securities distributed from an account prior to settlement of a trade, and service charges for insufficient funds or securities that were not received for a trade by settlement date. Account level sweep fees apply to certain managed retirement accounts, such as IRAs.
If you hold mutual funds, ETFs or variable annuities, you will also incur and pay the fees, charges and expenses that are imbedded in these investments, as disclosed in the applicable prospectus or offering documents.
Important Additional Information: 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.
For additional information, please see Janney’s Form ADV Part 2A, Regulation Best Interest Disclosures and Janney’s Service Charges & Fees policy.