Description of our Firm & Principal Owners Ameritas Advisory Services, LLC (herein after AAS, We, Us, or the Firm) is an investment adviser registered with the Securities and Exchange Commission (“SEC”). We offer a variety of advisory services that are made available to clients through individuals associated with us as investment adviser representatives (“IARs” or “IAR”). AAS is the successor investment adviser entity of Ameritas Investment Company, LLC (“AIC”) acquiring the assets, liabilities, clients, and investment adviser representatives (“IARs” or “IAR”) of AIC in October, 2021. AIC continues to act and is registered with the SEC as a broker-dealer, is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investors Protection Corporation (“SIPC”).
AAS is part of the Ameritas Mutual Holding Company (“AMHC”) family of companies. The Ameritas Holding Company (“AHC”), a direct subsidiary of AMHC has 100% ownership of both Ameritas Investment Partners, Inc. (“AIP”) and Ameritas Life Insurance Corp. (“ALIC”); ALIC has direct 100% ownership of Ameritas Life Insurance Corp. of New York (“ALIC NY”), AIC, our firm, and other subsidiaries.
Introduction As an investment adviser, we offer a variety of advisory services that are made available to clients through individuals associated with us as IARs. When acting as an investment adviser, we and our IARs have a fiduciary duty to our advisory clients and must make full and fair disclosure to our advisory clients relating to our advisory relationships. As a fiduciary we aim to always put your interests ahead of our own, identify material conflicts, and eliminate, mitigate and/or disclose these conflicts.
Our IARs are primarily independent contractors and may use marketing names or other names that are held out to the public. Such names are known as “doing business as” or “DBA” names. Such marketing names primarily promote overall financial services of an IAR and should not be viewed as an entity through whom securities are sold and/or investment advisory services are provided. While we allow our IARs to use a name other than Ameritas Advisory Services, LLC, the IAR must disclose on advertising and client correspondence that advisory services are offered through us.
An IAR may be registered with our affiliated broker-dealer, AIC as a broker-dealer registered representative and/or appointed as an agent with insurance companies including ALIC and ALIC NY. In these instances, an IAR may recommend fee-based investment advisory services, commission- based accounts, annuities, or other insurance products. Depending on the IAR’s licensing and affiliations with AAS, the IAR may be restricted as to the services or products they are able to offer or choose to offer a limited number of services such as financial planning and consulting.
We have a limited number of IARs who are employees of ALIC and registered representatives of AIC that receive a salary plus bonus compensation based on a variety of factors. Bonus compensation is structured so as to not favor specific securities products or product types or specific advisory programs. Before engaging with an IAR, you should discuss the many differences between broker-dealer and advisory relationships as well as any limitations in the services your IAR offers. It’s important to understand the associated costs and benefits of each option so that you can decide which types of accounts and services may be best suited for your unique financial goals, risk tolerance, investment objectives and time horizon. You should bear in mind that your total cost for transactions under a fee account versus a commission account can vary significantly and depend on a number of facts such as account size, volume of trading activity (number of transactions), type and quantity of investments purchased or sold, anticipated holding period for the investments in your account, potential risk and return, and commission rates.
Description of Primary Advisory Services Our advisory services primarily consist of asset management services, financial planning and consulting as well as retirement plan advisory services. Our services are designed to provide investment programs that are suitable for our client’s financial goals, objectives, and risk tolerances.
Asset Management Services We offer fee-based asset management services through portfolios or custom strategies created by IARs, co-advisory relationships with third-party money managers, and may refer clients to third-party money managers. Depending on your IAR’s registrations and qualifications, the types of investments that your IAR may purchase and sell for your account include, but are not limited to, mutual funds, exchange traded funds (“ETFs”), unit investment trusts (“UITs”), structured products, interval funds, stocks, bonds, money market funds (otherwise known as “securities”), brokered certificates of deposit (“brokered CDs”) (which may or may not be securities), and cash. Your IAR may also recommend the purchase of a fee based variable annuity or life insurance product and make recommendations on subaccounts to develop a portfolio which may be diversified or concentrated in individual securities or sectors. Your IAR, will examine your investment objectives, risk tolerance, and other factors in order to recommend specific investments or strategies. When developing recommendations for you, IARs compare your financial goals with your investment risk tolerance and the risk and potential of a specific investment or strategy.
Your account will be managed on a discretionary or non-discretionary basis. In a discretionary account we, our IARs, our sub-advisers, or third-party investment advisers have the authority to buy or sell investments without contacting you in advance. Depending on the program selected, discretionary authority will include selection of model portfolios, subaccount selection in variable annuities, or the selection and purchase or sale of investments in line with your investment objectives and risk tolerance. You may withdraw this authority at any time by providing written notice to AAS and/or your IAR.
Non-discretionary accounts are accounts where your IAR provides recommendations as to the purchase or sale of specific investments or third-party money managers, however your IAR does not place orders to buy or sell investments without first receiving your authorization. If your IAR manages your account on a non-discretionary basis, you must be willing to accept that your IAR cannot buy or sell investments in your account without your prior consent. If you are unavailable, we will not be able to buy or sell any investment (as we would for our discretionary clients) should there be a market correction or if we determine that a particular investment should be bought or sold for our client accounts.
Your IAR will request information from you regarding your financial situation, investment objectives, risk tolerance, and other factors that might be considered in the management of your account and the appropriateness of the program options. Your IAR will assist you in determining suitable investments and setting appropriate investment objectives. The ultimate decision to invest in a specific program rests with you. Based upon the information you provide, your IAR will recommend specific investments, investment strategies, or model portfolios developed by your IAR or a AAS 1023 Page 5 of 34 03-21-24 third-party investment manager. Your IAR will utilize the financial information you provide to monitor your portfolio to ensure that it remains prudent based on your risk profile and financial situation.
Your IAR will contact you at least annually to discuss any changes or updates in your financial situation, investment objectives, risk tolerance and time horizon as well as any reasonable restrictions you may wish to impose on the management of your account, including the type of investments that can be purchased in your account. Your IAR may make recommendations including, but not limited to, recommendations to change, hold, add, or replace investments, rebalance the mix of investments in your account, change the model selected for your account (if applicable), and increase or decrease the anticipated risk of the investments in your account.
If you own multi-share class mutual funds in a discretionary or non-discretionary account, AAS will direct the broker/dealer, clearing firm or custodian of your account to convert the mutual fund shares you own to the lowest cost share class available to us for the same funds at no cost or tax consequences to you. Such conversions will be made without notice. AAS will utilize the mutual fund share classes designated for the model portfolios or investment strategies we or a third party investment adviser offer in the Ameritas Investment Strategies (“AIS”) Program, AIS Wrap Program, and Managed Account Solutions Program. This could result in client’s owning share classes where a lower cost share class is available to us. AAS does not review or convert individual mutual fund holdings in Third-Party Investment Management Programs. Please review the program description in this brochure and in the third-party investment adviser’s Form ADV Part 2A for additional information. Wrap Fee Programs We offer asset management services through both wrap fee and non-wrap fee programs. A wrap fee program is defined as an advisory program in which the client pays a specified fee for portfolio management services and trade execution. We receive a portion of the investment advisory fee you pay when you participate in any of the wrap-fee programs we offer.
Wrap fee programs differ from other programs in that the fee structure for wrap programs is all-inclusive, whereas non-wrap fee programs assess trade execution costs that are in addition to the investment advisory fees. A wrap fee program is more expensive when trading activity is low and less expensive when trading activity is higher (such as when an account is established or actively managed). Conversely, a non-wrap fee program is more expensive when trading activity is high and less expensive when trading activity is less frequent. If the number of transactions in a wrap fee program is low enough, the wrap fee you pay will exceed the stand-alone investment advisory fee and separate brokerage commissions that would otherwise have been charged. We do not charge our clients higher advisory fees in wrap fee programs based on their trading activity; however, you should be aware that certain custodians including Charles Schwab & Co., Inc. (“Schwab”), and Fidelity Brokerage Services, Inc. (“Fidelity”) have eliminated commissions [or transaction fees] for online trades of U.S. equities, ETFs and options (subject to an additional fee per contract fee). This means that, in most cases, when we buy and sell these types of securities, we will not have to pay any commissions to Schwab and Fidelity. We also have an incentive to limit our trading activities in your account(s) because we are charged for executed trades.
A wrap fee program is not appropriate for every client. You should carefully consider and discuss the investment objectives for your account with your IAR to determine whether a wrap or non-wrap fee program is most appropriate.
Galaxy Program The Galaxy Program is offered on a discretionary and non-discretionary basis. This program provides participants with customized asset management services. AIC acts as the introducing broker-dealer for this program and assets for this program are custodied at NFS: 245 Summer St., Boston, MA 02210. Depending on your IAR’s registrations and qualifications, the types of investments that your IAR may purchase and sell for your account include, but are not limited to, mutual funds, exchange traded funds (“ETFs”), unit investment trusts (“UITs”), structured products, interval funds, stocks, bonds, money market funds (otherwise known as “securities”), brokered CDs (which may or may not be securities), and cash. Your IAR may also recommend the purchase of a fee based variable annuity or life insurance product and make recommendations on subaccounts. If you own multi-share class mutual funds in your account, AIC, on behalf of AAS, will convert the mutual fund shares you own to the lowest cost share classes available through NFS for the same mutual funds and with no cost or tax consequences to you. In connection with the Galaxy Program, your IAR may also provide financial planning or consulting services. In these circumstances, your IAR’s initial analysis will include a basic review of your fundamentals, including your net worth and current cash flow, protection needs and basic estate planning needs. Your IAR is not obligated to make any recommendations or give any financial advice to you that, in the sole judgment of the IAR, would be impractical, unsuitable, unattainable, or undesirable. As part of your IAR’s basic review of your fundamentals, you may receive, without charge, a life insurance needs analysis. Your IAR will receive no compensation for the life insurance needs analysis but will receive compensation in the form of commissions or fees if you choose to purchase insurance through your IAR.
Galaxy Wrap Fee Program (Closed to New Accounts) The Galaxy Wrap Fee Program is distinguishable from the Galaxy Program in that it provides the services available in Galaxy for an asset-based fee, and any trades within the program are made without incurring transaction charges. AIC acts as the introducing broker-dealer for this program and assets for this program are custodied at NFS: 245 Summer St., Boston, MA 02210. Additional charges for the program such as confirmation fees, reorganization fees, transfer fees, IRA, and Qualified Retirement Plan Account Custodian fees, and/or termination fees may be assessed by NFS or AIC. Other fees may be assessed directly by mutual fund companies as described in the applicable prospectus(es). More detailed information about the Galaxy Wrap Fee Program, including services and fees, can be found in the Galaxy Wrap Fee Program brochure available through your IAR.
Galaxy II Program The Galaxy II Program is a discretionary program that is only available through a limited number of IARs subject to our discretion. Assets for this program are custodied at Schwab: 211 Main St., San Francisco, CA 94105 and Fidelity: 245 Summer St., Boston, MA 02210.
AAS 1023 Page 6 of 34 03-21-24 Depending on your IAR’s registrations and qualifications, the types of investments that your IAR may purchase and sell for your account include, but are not limited to, mutual funds, exchange traded funds (“ETFs”), unit investment trusts (“UITs”), structured products, interval funds, stocks, bonds, and money market funds (otherwise known as “securities”) brokered CDs (which may or may not be securities), and cash. Your IAR may also recommend the purchase of a fee based variable annuity or life insurance product and make recommendations on subaccounts. You may place reasonable restrictions on the management of your account including restrictions on the types of investments that can be purchased for your account.
In connection with the Galaxy II Program, your IAR may also provide financial planning or consulting services. In these circumstances, your IAR’s initial analysis will include a basic review of your fundamentals, including your net worth and current cash flow, protection needs and basic estate planning needs. The initial recommendations may address only the areas that you have identified as your most immediate needs and priorities. Your IAR is not obligated to make any recommendations or give any financial advice to you that, in the sole judgment of the IAR, would be impractical, unsuitable, unattainable, or undesirable. As part of your IAR’s basic review of your fundamentals, you may receive, without charge, a life insurance needs analysis. Your IAR will receive no compensation for the life insurance needs analysis but will receive compensation in the form of commissions or fees if you choose to purchase insurance through your IAR.
Galaxy II Wrap Fee Program The Galaxy II Wrap Fee Program is only available to a limited number of IARs subject to our discretion. It is distinguishable from the Galaxy II Program in that it provides you with the services available in Galaxy II for an asset-based fee, and any trades within the program are made without incurring transaction charges. Assets in this program are custodied at Schwab: 211 Main St., San Francisco, CA 94105 and Fidelity: 245 Summer St., Boston, MA 02210.
Miscellaneous custodial charges for the program such as confirmation fees, reorganization fees, transfer fees, IRA, and Qualified Retirement Plan Account Custodian fees, and/or termination fees may be assessed by the custodian. Other fees may be assessed directly by mutual fund companies as described in the applicable prospectus(es).
More detailed information about the Galaxy II Wrap Fee Program, including services and fees, can be found in the Galaxy II Wrap Fee Program brochure available through your IAR.
Ameritas Investment Strategies Program The Ameritas Investment Strategies (“AIS”) Program is a discretionary program that is a managed asset allocation program in which we and our IARs provide ongoing investment advice and management. Client’s accounts are invested in a variety of model portfolios that primarily utilize transaction fee mutual funds, no-transaction fee mutual funds, and exchange traded funds (“ETF”s). Your IAR will provide you with a Risk Assessment Questionnaire to determine the appropriate investment strategy for you and will make recommendations based on your responses and the information your provide. If you choose to participate in the AIS Program, we will initiate the steps necessary to open a brokerage account with one of our approved custodians for the purposes of clearing and custody of the securities and other assets in your account. Approved custodians for this program are Fidelity: 245 Summer St., Boston, MA 02210 and Schwab: 211 Main St., San Francisco, CA 94105, As a participant in the AIS Program, you will have the opportunity to choose from a series of managed model portfolios. Once you select a model portfolio and invest, your IAR will monitor the portfolio to help ensure it remains appropriate based upon your investment objectives, risk tolerance, and other financial needs.
We make several managed model portfolios available through the AIS Program to suit a variety of risk tolerances and investment objectives. We have engaged Capital Research and Management Company, the investment adviser to the American Funds family of funds, to provide model portfolios (the “American Funds Models”) for the program. The American Funds Models consist entirely of American Funds’ proprietary mutual funds and exchange traded funds (ETFs). The American Funds Models are developed and monitored by the American Funds Portfolio Oversight Committee. AAS will utilize the mutual fund share classes designated in the model portfolios offered through the AIS Program. This could result in AAS holding mutual fund share classes where a lower cost share class is available.
AAS, through its Investment Committee, has developed certain model portfolios (the “AIS Models”) and makes the final decision as to the composition of the AIS Models including asset allocation, investment selection, and investment criteria. AAS has also engaged a third-party sub- adviser to place trades in client accounts including investing new accounts in model portfolios available in the program as selected by AAS or its IARs; selling portfolio holdings to meet cash withdrawal requests; and rebalancing accounts to a model’s target allocation. Ameritas Investment Strategies Wrap Fee Program (Closed to New Accounts) The Ameritas Investment Strategies Wrap Fee Program (“AIS Wrap Program”) is distinguishable from the AIS Program in that it provides you with the services available in the AIS Program for an asset-based fee, and any trades within the program are made without incurring transaction charges. Miscellaneous custodial charges for the program such as confirmation fees, reorganization fees, transfer fees, IRA and Qualified Retirement Plan account custodian fees, and/or termination fees may be assessed by the custodian of your account. Other fees may be assessed directly by mutual fund companies or ETFs as described in the applicable prospectus(es). Approved custodians for this program are Fidelity: 245 Summer St., Boston, MA 02210 and Schwab: 211 Main St., San Francisco, CA 94105.
More detailed information about the AIS Wrap Program, including services and fees, can be found in the AIS Wrap Fee Program brochure available through your IAR.
Adviser Managed Retirement Program The Adviser Managed Retirement (“AMR”) Program is a discretionary program that provides you with fee-based asset management in an employer sponsored retirement plan. If your employer offers a self-directed brokerage option through your retirement plan, you can retain an IAR to provide investment advisory services with respect to your retirement plan account assets. AAS 1023 Page 7 of 34 03-21-24 Under the AMR Program, you will establish a brokerage account (“self-directed brokerage account” or “account”) with a custodian approved by your employer sponsored retirement plan and complete documents necessary to provide your IAR with access to manage the assets in the account including your contributions and any contributions by your employer on your behalf. Approved custodians for this program are Fidelity: 245 Summer St., Boston, MA 02210 and Schwab: 211 Main St., San Francisco, CA 94105.
Your IAR’s investment advice and asset management services are limited to those assets in your self-directed brokerage account. Your IAR’s advice and recommendations with respect to assets in your self-directed brokerage account may be limited by the terms of your employer sponsored retirement plan.
You may terminate your AMR Program Agreement at any time by contacting us or the custodian of your self-directed brokerage account. Upon termination, we and our IARs will no longer have access to your account and as such, you will be responsible for monitoring the investments in your account and will pay retail brokerage transaction fees.
Adviser Managed Solutions Program The Adviser Managed Solutions (“AMS”) Program is a discretionary program offered by our firm. Approved custodians for this program include Fidelity: 245 Summer St., Boston, MA 02210 and Schwab: 211 Main St., San Francisco, CA 94105. The AMS Program provides participants with customized asset management services. Your IAR may construct portfolios specific to your situation or build customized models using a wide variety of asset classes and use these model to manage multiple client accounts. Depending on your IAR’s registrations and qualifications, the types of investments that your IAR may purchase and sell for your account include, but are not limited to, mutual funds, exchange traded funds (“ETFs”), unit investment trusts (“UITs”), interval funds, structured products, stocks, bonds, and money market funds (otherwise referred to as “securities”), brokered CDs (which may or may not be securities), and cash to develop a portfolio which may be diversified or concentrated in individual securities or sectors. Depending on the custodian selected, IARs may utilize models created by third-party investment managers to varying degrees for research and portfolio construction support when creating and managing your portfolio. The portfolios may also be customized to restrict securities from trading, managed for tax efficiency, or restrict the purchase of specific securities in your account. Your IAR may also engage a third-party manager to manage the assets in your account in accordance to model strategies created by the third-party manager. Your IAR will pay the third-party manager’s management fee on your behalf unless you enter into an amendment to your AMS agreement whereby the third-party investment adviser will act as sub-adviser to your account. If you agree to the amendment, the third-party manager will directly debit its advisory fee and have discretionary authorization to buy, sell or exchange securities in the account. The strategies available and specific fees debited from your account will be in addition to AAS’s fee and outlined in the amendment you sign. You and your IAR will retain the authority to remove or replace third-party managers. Your IAR may also recommend the purchase of a fee based variable annuity or life insurance product and make recommendations on subaccounts.
In connection with the AMS Program, your IAR may also provide financial planning or consulting services. In these circumstances, your IAR’s initial analysis will include a basic review of your fundamentals,

including your net worth and current cash flow, protection needs and basic estate planning needs. Your IAR is not obligated to make any recommendations or give any financial advice to you that, in the sole judgment of the IAR, would be impractical, unsuitable, unattainable, or undesirable. As part of your IAR’s basic review of your fundamentals, you may receive, without charge, a life insurance needs analysis. Your IAR will receive no compensation for the life insurance needs analysis but will receive compensation for any insurance products you choose to purchase.
Constellation Wrap Fee Program The Constellation Wrap Fee Program (“Constellation”) provides you with ongoing discretionary management of your portfolio for an annualized fee. AIC acts as the introducing broker-dealer for this program and assets for this program are custodied at NFS: 245 Summer St, Boston, MA 02210. We provide several professionally managed investment portfolios developed by AAS’s Investment Committee which includes individuals from our affiliated investment adviser, AIP. We have retained AIP to assist with the development of investment portfolios, portfolio monitoring, trading, and account administration. We will act with discretionary authority to buy and sell securities or other investments for your account consistent with the model(s) you select. If multi-share class mutual funds are held in an investment portfolio, the Investment Committee will utilize the lowest cost share classes available to us through NFS.
More detailed information about the Constellation Wrap Fee Program, including services and fees can be found in the Constellation Wrap Fee Program brochure available through your IAR.
Held Away Retirement Plan Program The Held Away Retirement Plan Program (“HARP Program”) is a discretionary program that provides you with fee-based asset management in an employer-sponsored retirement plan. Unlike the AMR Program, the HARP Program permits your IAR to manage your employer-sponsor retirement plan account rather than a self-directed brokerage account. Your IAR’s investment advice and recommendations for investments in your account are limited to only those investment options made available in the employer-sponsored retirement plan. AAS has engaged Pontera as a third-party platform to facilitate management of held away assets such as defined contribution plan participant accounts, with discretion. A link will be provided to you allowing Pontera to connect your account(s) to the platform. Once your account(s) is/are connected to the platform, your investment adviser representative will review the current account allocations. When deemed necessary, your investment adviser representative will rebalance the account considering your investment goals and risk tolerance, and may change your allocations or future contributions based on current economic and market trends. Any contributions or distributions to or from your account must be administered through your employer-sponsored plan. You may terminate your HARP Program Agreement at any time by removing your account from the Pontera platform. Upon termination, we and our IARs will no longer have access to your account, and as such, you will be responsible for monitoring the investments in your account. AAS 1023 Page 8 of 34 03-21-24 Managed Account Solutions Wrap Fee Program The Managed Account Solutions Wrap Fee Program (“MAS Program”) is a wrap fee program sponsored by our firm. The services in the MAS Program are available for an asset-based fee, and any trades within the program are made without incurring transaction charges. Additional charges for the program such as confirmation fees, reorganization fees, transfer fees, IRA, and qualified retirement plan account custodian fees, and/or termination fees may be assessed by NFS and/or AIC. Other fees may be assessed directly by mutual fund companies as described in the applicable prospectus(es). We have retained Envestnet Asset Management, Inc., and its affiliates (“Envestnet”), an unaffiliated registered investment adviser, to provide, either directly or indirectly, various investment advisory and related technology and program services to our IARs and clients participating in the program. The MAS Program offers Fund Strategist Portfolios (FSPs), Multi-Manager Accounts (MMAs), Separately Managed Accounts (SMAs), Strategist Unified Managed Accounts (SUMAs) managed by third-party money managers, Private Wealth Consulting for high-net-worth clients, and Adviser Directed UMAs. When designing and managing model portfolios, third-party investment advisers may utilize multi-share class mutual funds. In those cases, Envestnet or the third-party investment adviser determine the share class designated for the model portfolios they offer. This could result in your owning a mutual fund share class where a lower cost share class is available. AIC acts as the introducing broker-dealer for this program and assets for this program are custodied at NFS, 245 Summer St, Boston, MA 02210.
IARs will utilize tools provided by Envestnet to assess your risk profile and investment objectives to construct a proposal for your Account, including a statement of investment selection identifying the portfolios chosen. Envestnet will execute all trades for your account based upon the model you select. Neither we nor your IAR have the authority to make discretionary investment decisions for you in this program.
If you choose to participate in this program, you should read a copy of our MAS Program Brochure and Envestnet’s Program Brochure. Both documents contain more detailed information on fees and services.
Adviser Managed Annuity Program The Adviser Managed Annuity Program (AMAP) is a discretionary program where your IAR will provide asset management services for the subaccount allocations in a variable annuity. Your IAR will request information from you regarding your financial situation, investment objectives, risk tolerance, and other factors that will be considered in the recommendation to purchase a variable annuity to complement other investments you may have. Your IAR will assist you in determining a suitable allocation, setting appropriate investment objectives and will request information from you regarding your financial situation, investment objectives, risk tolerance, guidelines for your annuity, and other factors that should be considered in the management of your annuity. You will grant your IAR with the authority to reallocate your subaccount allocations without contacting you in advance. You may place reasonable restrictions on the management of your annuity including restrictions on the type of subaccount allocations that can be utilized in your annuity. You may withdraw your authorization at any time by providing written notice to AAS or your IAR.
Your IAR is not obligated to make any recommendations or give any financial advice to you that, in the sole judgment of the IAR, would be impractical, unsuitable, unattainable, or undesirable.
Your IAR will be available to you on an ongoing basis should your financial situation, investment objectives or other factors change or if you wish to place reasonable restrictions on the management of your account. Your IAR will contact you at least annually to determine whether there have been any changes in your financial situation or investment objectives and may make recommendations including but not limited to recommendations to hold, add, or replace investments, rebalance the mix of investments in your account, and increase or decrease the anticipated risk of the investments in your account.
Third-Party Investment Management Programs We offer investment advisory services and programs of third-party investment advisers where our IAR provides non-discretionary recommendations of third-party investment advisers’ programs and related client relationship services. On a limited basis, your IAR may be granted discretionary authority to select investment strategies offered through the third-party investment adviser. Through these programs, third-party investment advisers provide ongoing discretionary investment management. When designing and managing model portfolios, third-party investment advisers may utilize multi-share class mutual funds. In those cases, the third-party investment adviser will determine the share class designated for the model portfolios they offer. Assets for the programs will be held with custodians selected by the third-party investment advisers.
Third party advisory relationships offered through our firm typically impose a minimum dollar value of assets for establishing or maintaining an account. If you engage in any of these programs, you should read a copy of the program agreement and any relevant disclosure documents for detailed information about services, fees, and account minimums.
Among our third-party investment management offerings, we also offer third-party investment advisory programs through our affiliate, AIP. In the Gemini, Mercury, and Private Clients programs, AIP provides investment management on a discretionary basis, including review of each investment prior to purchase. The Private Clients program is closed to new clients. For more information on the Gemini, Mercury, and Private Clients programs, please review AIP’s ADV Part 2 Disclosure Brochure.
Compensation for Endorsements & Referrals IARs may recommend that clients utilize services provided by third-party investment advisers and receive compensation for this recommendation in the form of an ongoing referral fee. When AAS and our IARs receive compensation for such referrals, this is a conflict of interest. When you are referred to another investment adviser, your IAR will disclose their status as a client or non-client of the investment adviser; that they are compensated; and that such compensation is a conflict of interest. Additional conflicts of interest will be provided through a separate disclosure based upon the relationship that AAS and your IAR have with the third-party investment adviser. If AAS compensates a third-party for referrals, the third-party is to provide clear and prominent disclosure which outlines their relationship to AAS, whether or not compensation is paid, and the incentives such compensation introduces. Additionally, AAS will enter into written agreements with any third-party who receives compensation from AAS for referral activity. AAS will monitor the activities of these third parties to ensure they are complying with the requirements outlined in Rule 206(4)-1(b)(1) and (b)(3). AAS 1023 Page 9 of 34 03-21-24 Financial Planning and Consulting We also offer financial planning and ongoing consulting services on a fee basis to help you achieve your stated financial goals and objectives. Your IAR may market his or her financial planning and consulting services under their own program name. All such programs and services are offered solely through AAS. Financial planning and consulting services include personal and/or business planning and can be either comprehensive or narrowly tailored to address specific areas. Personal financial planning and consulting services may include a cash flow and net worth analysis as well as risk management and insurance planning, tax planning, investment planning, education, and estate planning. Business plans may include an assessment of your business’ current and projected balance sheet, income statement and other data helpful in assessing a business’ capital and liquidity requirements; key financial ratios, tax trends, operational reserves, retirement plan options for employees; and business continuation plans such as the loss of key employees.
Your IAR will ask you to provide financial information and documentation to assist them in developing a financial plan. One or more meetings may be required to gather all information necessary to develop a plan appropriate for your needs. If requested, your IAR may also work closely with your attorney, accountant, or other professionals to develop a comprehensive plan. Any consultation or coordination required will be considered when determining your fee.
You are under no obligation to engage our firm for additional services or implement any financial recommendations made by your IAR. In that case you would not receive the services we provide which are designed, among other things, to assist you in determining which investments, investment strategies or programs may be most appropriate for your circumstances.
Portfolio Advisor (Closed to New Clients) In the Portfolio Advisor program your IAR provides an on-going analysis of your current investment portfolio for a flat or asset-based fee. Your IAR may also provide performance reports, consolidated statements, periodic consultations, or other services at your request. Certain reports that may be made available to you either in writing or available on-line are obtained from sources believed to be reliable, however, cannot be guaranteed. You should always rely upon information you receive directly from the custodian(s) of your assets. The reports made available are created from data obtained from the custodians who hold the data, from technology that obtains the data from your custodians, or from statements received from product sponsors. As such, the report presentations you may see are subject to the accuracy of their source. Reports may not reflect all holdings or transactions, their costs, or proceeds received by you. Your IAR may also provide an analysis of your portfolio that is custodied with an independent third party who is not affiliated with us. The Portfolio Advisor program is closed to new clients.
Retirement Plan Advisory Services We provide a variety of services for compensation to ERISA plan fiduciaries and plan participants. Our IARs may provide investment education to ERISA plan fiduciaries and plan participants or may act as a 3(21)-investment advice fiduciary to provide ongoing non-discretionary investment advisory services, as well as non-fiduciary consulting services to plan sponsors. IARs providing services to retirement plan sponsors must enter into either a consulting and advisory services or non-fiduciary services agreement with the plan sponsor.
The scope of investment education provided to participants at the request of the plan sponsor will not constitute “investment advice” within the meaning of ERISA. Participant education will relate to general principles of investing and information about the investment options currently in the plan. The IAR may also participate in initial enrollment meetings, periodic workshops, and enrollment meetings for new participants as agreed upon between the IAR and plan sponsor.
Retirement plan advisory services are typically offered to plan sponsors of participant directed retirement plans, including 401(k) plans that a company establishes for its employees. The IAR will generally establish the plan sponsor’s needs and objectives through an initial meeting to collect data and review plan information and assist the sponsor in developing or updating the plan’s Investment Policy Statement.
Ongoing advisory services to the plan sponsor may include recommendations regarding the selection and review of investment options. If the IAR is engaged to provide fiduciary investment advice, the IAR will periodically review the investment options selected by the plan sponsor and make recommendations to keep or replace investment options as appropriate. Plan sponsors are under no obligation to follow the recommendations of the IAR.
IARs may provide general investment-related guidance, investment education and information about investment options and rollovers to a retirement plan fiduciary and to its participants without being considered a 3(21)-investment advice fiduciary. An IAR can provide investment advice to a plan while also providing investment education to plan participants. IARs are not authorized to have discretionary authority (i.e., act as a 3(38) Investment Management Fiduciary) over an ERISA retirement plan account.
We do not act as a recordkeeper for ERISA plans, however our parent company, ALIC does provide recordkeeping services for ERISA plans participating in our Retirement Plan Consulting and Advisory Services program. This creates a conflict of interest for us. The decision to select ALIC as record keeper is at the discretion of the ERISA Plan Sponsor and not AAS or the IAR.
Advantage Advisory Program (Closed to New Accounts) The Advantage Advisory Program (“AAP”) provides you, a fiduciary of a participant directed 401(k) plan, or an individual retirement account, with investment advisory services for an asset-based fee. Your IAR will provide non-discretionary fiduciary investment advice as agreed between you and the IAR. Services may include: 1. creating the line-up of investment options, you offer to your plan participants from a universe of funds reviewed, monitored, and approved by us; 2. creating asset allocation models that your plan may offer to participants to educate them on how to allocate their plan contributions among your plan’s investment options; and 3. reviewing and recommending periodic changes to your plan’s investment options and asset allocation models.
AAS 1023 Page 10 of 34 03-21-24 In the course of developing an asset allocation you will be able to impose reasonable investment restrictions on the management of the account. Your IAR will recommend allocating the asset weighting among various market sectors or classifications, taking into consideration factors such as time horizon, liquidity needs, regulatory issues, as well as each client/participant’s special considerations.
We acknowledge that we and our IARs are fiduciaries of your plan under Section 3(21) of ERISA (as well as Section 4975 of the Internal Revenue Code for IRAs) as a result of our provision of advice to plan fiduciaries as described above. Third-party investment advisers who will convey investment advice to plan fiduciaries, but who will not provide investment advice themselves, are not plan fiduciaries under AAP.
Retirement Accounts Guidance from the US Department of Labor (DOL) under Title I of the Employee Retirement Income Security Act (ERISA) and/or the Internal Revenue Code (Code), requires AAS to inform you that when we and our financial professionals provide nondiscretionary investment advice (including recommendations of our advisory program(s)) to you regarding your ERISA retirement plan or participant account or individual retirement account (which are all referred to as “retirement accounts”), that we and our financial professionals are fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code as applicable, which are laws governing retirement accounts. The way we make money creates some conflicts with your interests, so for retirement accounts we operate under a special rule that requires us to act in your best interest and not put our interest ahead of yours. Regulations under ERISA and the Code define fiduciary investment advice as (1) advice or recommendations, for a fee or other compensation, regarding investing in, purchasing or selling securities or other property to a plan, plan participant, or IRA owner; (2) provided on a regular basis; (3) where the advice is provided pursuant to a mutual agreement or understanding that; (4) the advice serves as a primary basis for investment decisions with respect to the plan or IRA assets; and (5) the advice is individualized to the plan, participant or IRA owner. Retirement Plan Rollovers When leaving an employer, you typically have four options regarding your existing retirement plan: (1) leave the assets in the former employer’s plan, if permitted, (2) roll over the assets to the new employer’s plan, if one is available and rollovers are permitted, (3) roll over the assets to an Individual Retirement Account (“IRA”), or (4) take a full withdrawal in cash, which would result in ordinary income tax and a penalty tax if you are under age 59 1/2.
If your IAR recommends that you roll over your 401(k) or other qualified plan assets to an IRA, this rollover recommendation presents a conflict of interest in that we and your IAR would receive compensation (or may increase current compensation) when investment advice is provided following your decision to roll over your plan assets. Your IAR will discuss your retirement plan options including retention of your 401(k) or qualified plan assets with your current plan, if allowed. Prior to making a decision you should carefully review the information regarding your rollover options and are under no obligation to rollover retirement plan assets to an account managed by us.
General Disclosure Regarding ERISA Qualified Accounts If an advisory account is a retirement account subject to the provisions of Title I of ERISA (ERISA) and/or Internal Revenue Code section 4975(c) (1) (IRC), we and our IARs who act as a fiduciary by providing investment advice for such retirement accounts (“Qualified Account”) are generally prohibited from receiving both an advisory fee and any transaction-based compensation unless in compliance with applicable prohibited transaction exemptions under ERISA or the IRC or authorized by the U.S. Department of Labor. You will represent that the Qualified Account and any instructions given by you regarding the Qualified Account are consistent with applicable Plan documents, including any investment policies, guidelines, or restrictions. You will provide us with a copy of all relevant documents and agree that the advisory program you have selected is consistent with those documents. You will notify us, promptly in writing, of any changes to any of the Plan’s investment policies, guidelines, or restrictions, or other Plan documents pertaining to investments by the Plan. If the assets in the Qualified Account constitute only a part of your Plan assets, you shall provide us with documentation of any of the Plan’s investment guidelines or policies that affect the Qualified Account. The compliance of any recommendation or investment your IAR makes for the Qualified Account with any such investment guidelines, policies, or restrictions shall only be determined on the date of the recommendation or purchase. You have the responsibility to give us prompt written notice if any investments made for the Qualified Account are inconsistent with such guidelines, policies, restrictions, or instructions. You understand that the services that we perform shall have no effect on the assets of the Plan that are not in the Qualified Account, and that we shall have no responsibility for such other assets. We are not responsible for Plan administration or for performing any other duties that are not expressly set forth in the advisory agreement. You shall obtain and maintain at your own expense any insurance or bonds you deem necessary to cover yourself and any of your affiliates, officers, directors, employees, and agents in connection with the advisory services AAS provides.
How Services are Tailored to Fit your Needs When you open an account with us or consult one of our IARs for a financial plan, your IAR will obtain the necessary financial data from you in the form of a Risk Assessment Questionnaire, a Client Data Sheet, and/or a New Account Form.
Your IAR will examine your investment objectives, risk tolerance, and other factors to recommend specific investments or advisory programs to suit your needs. If there are any changes to this information, please notify your IAR immediately. Your IAR will review your account annually or more frequently as necessary to determine whether or not your assets should be reallocated due to changes in your financial situation, the market, or other conditions.
The investment advisory services provided largely depend on the personal information you provide. In order for your IAR to provide appropriate investment advice to, or in the case of discretionary accounts, make appropriate investment decisions for you, it is important that you provide accurate and complete responses to your IAR’s questions about your financial condition, investment objectives and needs as well as any reasonable investment restrictions you wish to apply to the investments or types of investments, to be bought, sold, or held in your account. It is also important for you to inform your IAR of any changes to your personal or financial circumstances, investment objectives or risk tolerance as well as any reasonable investment restrictions which may affect the advice provided.
AAS 1023 Page 11 of 34 03-21-24 Assets Under Management As of December 31, 2023, AAS had $10,289,301,520 in assets under management, of which $5,183,642,195 was managed on a discretionary basis and $5,105,659,325 was managed on a non-discretionary basis.