LSIA is a SEC-registered investment advisor with its principal place of business located
in Elmhurst, Illinois. LSIA began operations in 1999. The firm provides personalized fee-
based financial planning and investment management to individuals, trusts, estates,
pensions, qualified plans, charitable organizations and small businesses among others.
After consultation, a LSIA Investment Advisor Representative (“IAR”) provides clients with
advice which may include: determination of financial objectives, cash flow management,
tax planning, investment management, recommendation of investment advisors and
subadvisors, asset allocation, education funding, retirement planning and estate
planning, and other financial planning.
Listed below are the firm's principal shareholders (i.e., those individuals and/or entities
controlling 25% or more of this company).
• LaSalle St. Holdings, LLC (“LSH”), Sole Owner. Formerly known as McDermott
Holdings 1, LP.
LSIA offers various advisory services to clients through specific investment supervisory
services under the LSIA umbrella, qualified plan consulting services, third party money
managers, financial planning, and advisory/soliciting services. These are described
further below.
A. LSIA INVESTMENT SUPERVISORY SERVICES
1. Our Services in General.
LSIA provides advice to clients about investing assets based on the needs of the client.
Through personal discussions during which LSIA identifies client goals and objectives we
develop a client's personal investment strategy and create and manage a portfolio or
recommend third party managers based on that strategy. During our data-gathering
process, we determine the client’s individual objectives, time horizons, risk tolerance, and
liquidity needs. As appropriate, we also review and discuss a client's prior investment
history, as well as family composition, background and other salient matters.
We manage advisory accounts on a non-discretionary or discretionary “managed” basis
as the client elects. This means either the client must affirmatively approve each
recommendation before the recommendation is implemented (non-discretionary) or we
invest without reference to the client’s actual consent pursuant to a power of attorney
given by the client (managed discretionary). Some of the trading in either type of account
is based on non-solicited orders received from a client – an “unsolicited order” is one
where the client initiates the idea, not the broker or adviser.
We invest and make recommendations based on the client’s stated objectives (for
example without limitation, preservation of assets, capital appreciation, growth, income,
or growth and income), as well as tax and other relevant considerations. We may
recommend third party advisors, subadvisors, and/or co-advisors to help manage the
client’s account.
Clients may impose if they choose reasonable restrictions on investing in certain
securities, types of securities, industry sectors, or categories of business.
Our investment recommendations are not limited to any specific product or service and
will generally include advice regarding the following securities:
• Exchange-listed securities
• Securities traded over-the-counter
• Foreign issuers
• Warrants
• Corporate debt securities (other than commercial paper)
• Commercial paper
• Certificates of deposit
• Municipal securities
• Variable annuities
• Mutual fund shares
• United States governmental securities
• Options contracts on securities
• Interests in partnerships investing in real estate
• Interests in partnerships investing in oil and gas interests
• Other types of alternative investments
Because every investment strategy involves different degrees of risk, all investment
strategies will be implemented/recommended only when consistent with the client’s stated
investment objectives, tolerance for risk, liquidity and suitability, and any restrictions
placed by the client.
2. The Two Categories of Investment Programs at LSIA
a. Non-Discretionary Programs. LSIA’s non-discretionary program is called the
LaSalle St. Asset Management Program (“LAMP”). LSIA offers LAMP based on
recommendations for investment decisions which the client must approve before the
recommendations are implemented by our IAR. In other words, this program is managed
on a non-discretionary basis, but also allows clients to submit unsolicited orders based
on ideas generated by the client. LSIA, in addition to providing non-discretionary
investment programs may also at the client’s request, provide additional advice on non-
investment management services which are included as part of the LAMP management
fee agreed upon by the client and LSIA at no additional cost. These services can include
budgeting, administrative management, educational funding and other matters as agreed
between the client and LSIA.
b. Managed Programs. LSIA also provides investment supervisory services defined
as rendering “managed” discretionary advice to clients or making investment decisions
on behalf of clients, based on defined objectives, individual characteristics and needs of
the client. Clients are also welcome to submit unsolicited orders where their investments
are part of a managed program. The managed programs LSIA offers do not otherwise
require individual client approval of each trade. Instead, the implementation of
recommendations is done pursuant to the discretion the client gives to LSIA to make
investment decisions. Some of the managed programs do, however, seek client approval
before implementing recommendations in any event, even though discretion permits the
Investment Advisor Representative (“IAR”) to implement the recommendation without
such approval.
The firm provides its advisory services under various managed programs and is
compensated pursuant to a fee arrangement between LSIA and the client. The fee
charged by the firm includes the design and management of the client portfolio. Fees are
negotiated on a client by client basis, based on the size of account, related business from
the client, length of relationship, and other individual factors unique to the client/advisor
relationship. The charges incurred through the use of a custodian are not included in the
managed fee. Any charges incurred through a broker, for example, ticket charges, are
also not part of the management fee LSIA charges. The client will pay these costs over
and above the management fee. As discussed below, there are certain other costs not
included in the management fee.
The primary investment vehicles used in the management of client accounts are no-load
mutual funds, exchange traded funds (“ETF”), equities, fixed income, annuities, options
and index funds. The IAR engages the client in personal interviews to gain an
understanding of the client’s investment objectives and individual needs.
At the present time, the various programs through which LSIA manages a client’s assets
on a discretionary basis should be reviewed by the client and his or her advisor before
selection of an approach.
Broadly speaking (although each situation is different) these programs offer account
recommendations and decisions based on client risk tolerance, financial situation, and
stated investment objectives which can include among other objectives preservation of
capital, income, growth and income, various degrees of more aggressive investment,
speculation, etc. In each instance these programs employ various asset allocation models
to implement investment strategies selected by the client. Certain programs focus on
retirement and/or financial planning. Other programs feature socially responsible
investing. Some rely on quantitative or fundamental analysis. Still others offer passive
investing in various index funds.
In each instance, the investments for each client are maintained and if necessary
rebalanced periodically to stay within investment strategy parameters and target asset
allocations.
B. QUALIFIED PLAN CONSULTING SERVICES
In addition to the non-discretionary and discretionary program listed above, LSIA also
offers Qualified Plan Consulting services described below.
This program is designed for plan sponsors, such as 401(k) plans, to invest in mutual
funds held with specific custodians who have outside TPA and/or record keepers. The
IAR helps educate the plan participants and may offer a variety of services. IAR may
choose to offer any or all of these services:
Plan Consulting: Our IARs consult with the plan sponsor about investment-related goals
and objectives. He or she conducts an assessment about the plan which may aide in a
possible plan design that meets the needs of the employer and/or participants.
Selection and Monitoring of Plan Investment Options: LSIA participates in the selection
of the menu of investment choices, including analysis of proposed menu and
development of portfolio models.
Participant Meetings: LSIA conducts meetings with eligible participants and provides
information to about referred plans and their purposes, education in investing in general
and investment choices available. Investment Advisor Representatives are, however, not
required to conduct such meetings outside the state in which their principal office is
located. Such meetings occur at the times and places determined by the Plan Sponsor.
The use and content of visual or electronic aids or printed materials is determined by
LSIA.
Participant Investment Consultant: LSIA consults with individual participants as to
appropriate investment choices. This includes assistance in developing custom portfolio
models on a participant-by-participant basis.
Assisting Participants in Completion of Forms: LSIA confers with participants to assist
them in completing enrollment forms, investment election forms and designation of
beneficiary forms.
Forwarding Forms to Plan Service Providers: The Firm assures that each eligible
participant completes the appropriate forms, and collecting such forms from participants
and forwarding them to the appropriate providers that require them.
Regular Contact with Plan Sponsor: LSIA makes contact by phone or personal visit with
each Plan Sponsor on a recurring and regular basis to provide ongoing assurance of the
Investment Advisor Representative’s continued interest in the Plan Sponsor’s needs with
respect to the Plan.
C. THIRD-PARTY MONEY MANAGERS
We also offer advisory management services to our clients through our Recommendation,
Selection, and Monitoring of Third-Party Money Managers programs in which clients
enroll, discussed below in four categories.
1. Third Party Investment Advisors – Wrap Fee. LSIA offers advisory management
services to clients by selecting, recommending, supervising, and monitoring one or more
unaffiliated third party investment managers who offer a wrap fee platform. LSIA itself
does not sponsor a wrap fee program. Certain wrap fee services are provided by Fidelity
Institutional Wealth Adviser, LLC (“FIWA”), a Registered Investment Advisor. FIWA has
developed and sponsors the Fidelity Managed Account Xchange℠ managed account
program (“FMAX”) whereby investment advisers, broker-dealers, banks, family offices or
other financial institutions use the FMAX Platform to provide investment advisory and
administrative services to their clients.
A wrap fee program of which FMAX is an example provides an all-inclusive fee for
investment advice, as well as trading costs. The fee for service is based on a percentage
of the assets under management and is capped at no more than 2.40% of the assets
under management (“AUM”). Since trading costs are included, the wrap fee charged is
usually higher than comparable non-wrap fee programs offered by LSIA. In addition, LSIA
participates in the wrap fee with the wrap fee sponsor and receives part of the fee. As
such, LSIA has an actual and potential conflict of interest which incentivizes it and its
IARs to recommend wrap fee programs in general and the FMAX wrap fee program in
particular since this will result in additional revenue to the IAR and LSIA.
FMAX, while charging a higher fee, also provides certain services which are sometimes
not available to clients investing in other non-wrap fee programs whether through LSIA
or elsewhere. Such services include, but are not be limited to assessment of client’s
needs, investment policy statements, portfolio modeling, monitoring, administrative
services, money manager evaluation, client periodic account statements and reporting
regarding investment strategies.
Participation in FMAX’s program enables LSIA to leverage FMAX’s established
relationship with various third party managers who provide asset allocation for portfolios.
Clients who participate in the program enter into an agreement styled “Statement of
Investment Selection.” The parties to this agreement are FMAX, LSIA, and the client. This
agreement establishes an understanding among the parties as to the client’s investment
goals and objectives among other subjects. LSIA will be appointed Advisor on the
account. In consultation with your LSIA advisor, the client will select an investment
portfolio containing various investments, usually mutual funds and or exchange traded
funds (“ETF”). LSIA advisors will periodically meet with the client to discuss changes in
investment objectives and risk tolerance and review the performance of the assets in the
portfolio, as well as asset allocation changes.
Before choosing the FMAX wrap fee program or any wrap fee program, clients should
compare the overall fee of any program in which they participate with non-wrap fee
comparable programs. This comparison should review not only fees and costs but also
level of service. In particular, the client should examine cost and service in light of the
investment objectives of the account, the level of trading anticipated, as well as
alternatives including brokerage
accounts which do not charge any fee (instead charging
transaction based compensation), and/or other advisor programs, either offered by LSIA
or not, which charge lower fees than FMAX or other wrap fee programs. At all times,
clients are under no obligation to choose any particular program offered by LSIA.
LSIA recommends only those advisors who agree to share part of the fee paid by the
client to the advisor. This is true when LSIA recommends FMAX wrap fee programs to
clients. A split is paid to LSIA, based on a percentage of the advisor fee calculated against
the assets under management the client deposits with FMAX. The amount of
compensation LSIA receives is agreed to by a contract between LSIA, FMAX and NFS.
Although LSIA endeavors at all times to put the interests of clients ahead of it and its
IAR’s interests, relationships like the one it has with FMAX described in this section
constitutes an actual and potential conflict of interest for LSIA and its IARs since the
incentive and/or actual receipt of compensation because of revenue split arrangement
based on a referral to FMAX could and in some instances does affect the judgement of
LSIA and its IARs when recommending participation in FMAX’s wrap fee program.
There are other third party investment advisor programs suitable for clients who might
otherwise invest in a wrap fee program like FMAX that are less costly to the client. Before
accepting any recommendation from LSIA regarding a wrap fee program, the client
should weigh the cost of the program, the frequency of trading, the availability of other
advisors, and the impact of receipt of part of the fee by LSIA before acting on the
recommendation.
For those clients participating in wrap fee programs offered by a third party, whether
FMAX or otherwise, LSIA IARs will contact each wrap fee program client at least annually
to verify there are no changes in the client’s financial circumstances and/or investment
objectives, and determine whether the client wishes any reasonable restrictions be placed
on the management of the accounts. Any such changes or requests must be
communicated in writing to the client’s portfolio manager, who is responsible for
implementing any appropriate adjustment to the Client’s investment portfolio.
2. Third Party Investment Advisors – Solicitor Programs and Referral
Services. LSIA recommends from time to time and does refer clients to third party
advisors through solicitor programs operating in compliance with the Investment
Advisers Act of 1940 (“The Act”) and its Rules. In these situations, LSIA refers clients to
third party money managers and acts as a contracted solicitor for these advisors. LSIA
enters into solicitor agreements with the third-party advisers which reflect the terms of
the solicitation. After meeting with the client and reviewing account size, individual
circumstances, personal and financial goals, investment objectives and risk tolerance,
as well as desired asset allocation, the LSIA advisor recommends one or more
programs of various unaffiliated third party advisors who sometimes take discretionary
authority to determine the securities purchased for the client. The client, however, will
sign an advisory agreement with the recommended third party advisor, not LSIA. The
account is also managed by the third party advisor, not LSIA. LSIA and its IARs are
available generally to answer questions and act as a relationship manager between the
client and the independent advisor. LSIA may also meet with clients periodically to
discuss third party performances, status, and any necessary changes to asset
allocation. LSIA, however, does not otherwise manage the client’s account. The client
will receive all necessary disclosure information regarding the solicitor arrangement
between LSIA and the third-party advisor.
Typically, LSIA, as a solicitor, recommends only those who agree to share part of the fee
paid by the client to the advisor. The advisor pays LSIA a split of the fee paid by the client,
either by flat referral fee or a percentage of the advisor fee calculated against the assets
under management the client deposits with the advisor. The amount of compensation
LSIA receives is agreed to by contract with the advisor LSIA recommends. LSIA typically
receives approximately 1.00% of the invested assets under management as its solicitor’s
fee. In each case where LSIA makes a recommendation pursuant to a Solicitor’s
Agreement with an advisor, LSIA gives notice to the client and describes the details of
any compensation paid for recommending the advisor.
Although LSIA endeavors at all times to put the interests of clients ahead of it and its
IAR’s interests, solicitation relationships like those described above constitute an actual
and potential conflict of interest for LSIA and its IARs since the incentive and/or actual
receipt of compensation because of a Solicitor’s Agreement affects the judgment of LSIA
and its IARs when recommending investment products, advisors and others. In addition,
because the advisor fee is split with LSIA, the overall fee can be in some instances higher
than it would be without the fee split. The client should be aware of these actual/potential
conflicts of interest and circumstances when making decisions based on advice received
from LSIA.
There are other non-LSIA third party investment advisor programs suitable for clients that
are less costly to the client than those recommended by LSIA pursuant to a Solicitor
Agreement with a third party advisor. Before accepting any recommendation from LSIA
regarding a third party advisor, the client should weigh the cost of the program, the
availability of other advisors, and the impact of receipt by LSIA of a solicitor’s fee on the
recommendation.
3. Third Party Investment Advisor “Co-Advisor” Programs. LSIA also offers
certain unaffiliated third party investment “co-advisor” programs. LSIA recommends
unaffiliated co-advisor third party investment advisors based on client account size,
individual circumstances, personal and financial goals, investment objectives, investment
experience, risk tolerance, and whether the client is an institution as opposed to an
individual. As part of co-advisor programs, LSIA assists clients in selecting suitable
strategies. The client enter an agreement with both LSIA and the outside advisor for
management. LSIA remains involved by providing assistance in not only selecting the
unaffiliated advisor, but also advising the client regarding third party models or programs
in which to invest and monitors management performance and asset allocation. The
actual management of the Account, however, remains with the third-party manager, not
LSIA.
Once again, LSIA recommends only advisors who share with LSIA part of the fee paid by
the client to the advisor. This split is paid to LSIA, as a percentage of the advisor fee
calculated against the assets under management the client deposits with the advisor. The
amount of compensation LSIA receives is agreed to by a contract between LSIA and the
advisor LSIA recommends. In co-advisor programs, the typical overall fee is less than
2.40% (which LSIA shares with the co-advisor), although each compensation situation is
different. In each case where LSIA makes a recommendation pursuant to a co-advisor
program, LSIA gives notice to the client and describe the details of any compensation the
firm is paid for the recommendation, including its share of the total fee.
Although LSIA endeavors at all times to put the interests of clients ahead of it and its
IAR’s interests, arrangements like the ones described with co-advisor programs constitute
an actual and potential conflict of interest for LSIA and its IARs since the incentive and/or
actual receipt of compensation because of fee sharing arrangements based on
recommendations may affect the judgment of LSIA and its IARs when recommending
investment products, advisors and sponsored companies, and investment strategies.
LSIA and its IARs also have an actual and potential conflict of interest by only offering
and recommending third party advisors who pay a portion of the client’s advisory fee to
LSIA. There are other non-LSIA third party investment advisor programs suitable for
clients that are more or less costly to the client. Before accepting any recommendation
from LSIA regarding a third party advisor, the client must weigh the cost of the program,
the availability of other advisors, and the impact and cost of receipt of part of the fee by
LSIA on the recommendation.
4. Subadvisor Programs. LSIA also offer clients access to certain subadvisory
programs it maintains under the LSIA management program umbrella. In these
programs, the client contracts directly with LSIA who in turn contracts with one or more
subadvisors for assistance in management of the client’s account. The client and LSIA’s
IAR select an investment portfolio and asset allocation strategy used to allocate assets.
The subadvisor is chosen to manage all or part of this investment portfolio in accordance
with the strategy chosen. The client fee will be split between LSIA and the subadvisor.
The share of the split between LSIA and the subadvisor is negotiated between LSIA and
the subadvisor. The subadvisor may or may not be given discretion to manage the client’s
assets, either independently or in conjunction with LSIA.
Typically, LSIA contracts with subadvisors who share the fee paid by the client to LSIA.
The fee is paid to LSIA, as a percentage calculated against the assets under management
the client deposits with the advisor. The amount of compensation the subadvisor receives
is agreed to by contract with LSIA. It differs from situation to situation.
Although LSIA endeavors at all times to put the interests of clients ahead of it and its
IAR’s interests, arrangements like the ones described between subadvisors and LSIA
constitute an actual and potential conflict of interest for LSIA and its IARs since the
incentive and/or actual receipt of compensation because of fee sharing arrangements
based on recommendations affects the judgment of LSIA and its IARs when
recommending investment products, advisors, subadvisors and sponsored companies.
LSIA and its IARs also have an actual and potential conflict of interest by offering and
recommending only third party subadvisors who agree to share a part of the client’s
advisory fee to LSIA. There are likely other third party investment advisor programs which
use subadvisors which are suitable for clients that are less costly to the client. Before
accepting any recommendation from LSIA regarding one of its programs which use
subadvisors, the client should weigh the cost of the program, the availability of other
advisors, and the impact of receipt of part of the fee by LSIA before acting on a
recommendation.
D. FINANCIAL PLANNING
LSIA also provides financial planning services. Financial planning offers a comprehensive
evaluation of a client’s current and future financial state by using currently known
variables to predict future cash flows, asset values and withdrawal plans. Through the
financial planning process, all questions, information and analysis are considered as they
impact and are impacted by the entire financial and life situation of the client. Clients
purchasing this service receive a written report which provides the client with a detailed
financial plan designed to assist the client achieve his or her financial goals and
objectives.
In general, the financial plan addresses any or all of the following areas:
• PERSONAL: A review of family records, budgeting, personal liability, estate information
and financial goals.
• TAX & CASH FLOW: An analysis of the client’s income tax and spending and planning
for past, current and future years; then illustrate the impact of various investments on
the client's current income tax and future tax liability.
• INVESTMENTS: An analysis of investment alternatives and their effect on the client's
portfolio.
• INSURANCE: A review of existing policies to ensure proper coverage for life, health,
disability, long-term care, liability, home and automobile.
• RETIREMENT: Analysis of current strategies and investment plans to help the client
achieve his or her retirement goals.
• DEATH & DISABILITY: Review the client’s cash needs at death, income needs of
surviving dependents, estate planning and disability income.
• ESTATE: Assistance in assessing and developing long-term client strategies, including
as appropriate, living trusts, wills, review estate tax, powers of attorney, asset
protection plans, nursing homes, Medicaid and elder law.
LSIA gathers required information through personal interviews. Information collected
includes the client's current financial status, tax status, future goals, returns objectives
and attitudes towards risk. Should the client choose to implement the recommendations
contained in the plan, LSIA suggests the client work closely with his/her attorney,
accountant, insurance agent, and/or stockbroker. Implementation of financial plan
recommendations is entirely at the client's discretion.
LSIA also provides general non-securities advice on topics that include tax and budgetary
planning, estate planning and business planning.
Typically, the financial plan is presented to the client within six months of the contract
date, provided that all information needed to prepare the financial plan has been promptly
provided.
Financial Planning recommendations are not limited to any specific product or service
offered by a broker-dealer or insurance company. All recommendations are of a generic
nature only.
E. AMOUNT OF MANAGED ASSETS
As of 12/31/2023, we were actively managing AUM of $779,981,957.00 of clients' assets
on a discretionary basis plus AUM of $2,695,041,880.00 clients' assets on a non-
discretionary basis. Additionally, at December 31, 2023 $76,728.497.00 of clients’ assets
under Advisement AUA were managed on a non-discretionary basis.