Features

Lincoln Financial Advisors (LFA) offers brokerage account services through two clearing firms: National Financial Services, LLC®, (NFS), a Fidelity® Investments Company, and Pershing, LLC®, an affiliate of Bank of New York Mellon.

Brokerage account statements from LFA will clearly indicate which clearing firm serves your account. LFA, NFS and Pershing are members of the Securities Investor Protection Corporation (SIPC). Congress created SIPC in 1970 to protect clients of member broker-dealers that may fail or be liquidated.

Account Protection

NFS 

Securities in accounts carried by National Financial Services LLC (NFS), a Fidelity Investments company, are protected in accordance with the Securities Investor Protection Corporation (SIPC) up to $500,000. For claims filed on or after July 22, 2010, the $500,000 total amount of SIPC protection is inclusive of up to $250,000 protection on claims for cash, subject to periodic adjustments for inflation in accordance with terms of the SIPC statute and approval by SIPC's board of directors. NFS also has arranged for coverage above these limits. Neither coverage protects against a decline in the market value of securities, nor does either coverage extend to certain securities that are considered ineligible for coverage. For more details on SIPC, or to request an SIPC brochure, visit www.sipc.org  or call 202-371-8300.

"Excess of SIPC" Coverage
In addition to SIPC protection, NFS provides for brokerage accounts additional "excess of SIPC" coverage through Lloyd's of London, together with other insurers.1 The excess of SIPC coverage will be used only when SIPC coverage is exhausted. Like SIPC protection, excess of SIPC protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while broker-dealers remain in business. Total aggregate excess of SIPC coverage available through NFS's excess of SIPC policy is $1 billion. Within NFS's excess of SIPC coverage, there is no per-account dollar limit on coverage of securities, but there is a per-account limit of $1.9 million on coverage of cash. This is the maximum excess of SIPC protection currently available in the brokerage industry. 
 

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Pershing

Pershing provides account protection for the total net equity of assets held in custody by Pershing for individual brokerage accounts. Of that total, the SIPC provides $500,000 of coverage, including $250,000 for claims for cash awaiting reinvestment (SIPC coverage). This account protection applies when a SIPC member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against the losses from the rise and fall in the market value of investments.

Neither SIPC nor excess SIPC coverage protects against loss due to market fluctuation of investments. An excess of SIPC coverage claim would only arise in the unlikely event that Pershing fails financially and client assets for covered accounts cannot be located due to theft, misplacement, destruction, burglary, robbery, embezzlement, abstraction, failure to obtain or maintain possession or control of client securities, or to maintain the special reserve bank account required by applicable rules. 

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Account statements

Monthly or quarterly statements provide easy-to-read summaries of your financial activity and offer clarity and comprehensive data. Depending on the type of account you choose, you may enjoy all or some of these features: An asset allocation snapshot. An income summary report. Portfolio detail on securities positions and current market value. Detailed cost-basis information, including realized and unrealized gains and losses. Expense coding to help organize your check-writing activity. How to Read Your Statement (NFS) (PDF). Understanding Your Brokerage Account Statement (Pershing) (PDF).

Additionally, all account holders receive annual statements that summarize their annual account activity for tax-reporting purposes. Ask your LFA planner if you may benefit from a consolidated statement that combines your financial holdings from many different financial services providers into one summary.

Bill payment services

A variety of bill payment services are available to you depending on which clearing firm your LFA account is managed through. Visit the Access page for information on bill payment services. 

Check writing

LFA brokerage accounts offer a convenient check-writing service, providing an efficient system of cash flow management and making it easy to track your check-writing activity. You have limited or unlimited check-writing access to your core money market fund or margin loan balance, depending on the type of account you hold.

Before you consider check-writing from a margin loan balance, note that margin trading entails considerable risk and is not suitable for all investors. If the market value of securities in a margin account declines, the investor may be required to deposit more money or securities to maintain his or her line of credit. Investment losses do not minimize the obligation of a margin account investor to repay a loan in full. 

Core Money Market Fund Sweep

Brokerage accounts provide a core money market sweep to ensure that all cash dividends, interest and transaction proceeds over $1 are invested automatically in the core money market fund of your choice. Money in your core fund earns competitive money market returns. The money market sweep feature makes settling trades and transactions easier. Cash that is not immediately used for other purposes is invested in your designated money market fund.

An investment in a money market fund if neither insured, nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other U.S. government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in a money fund.

Ask your LFA planner for a current money market prospectus containing more complete information, including charges, risks and expenses. Read the prospectus carefully before you invest or send money. 

Debit card features

NFS

Brokerage Portfolio® Accounts through NFS are available at two levels — Gold and Platinum — with VISA® Debit/ATM cards among the services and features offered at both levels. These features are available with both the VISA Gold and Platinum Debit/ATM cards:

  • You can use the funds in your core money market fund to purchase goods and services with your VISA card or make cash withdrawals more than 600,000 locations worldwide, wherever you see the VISA symbol displayed.
  • You can avoid finance charges and monthly credit card bills. Each debit card transaction is automatically deducted from your core money market fund.
  • You may make up to five free ATM withdrawals per month, although ATM surcharge fees may apply. There is a 50-cent fee for each subsequent transaction.
  • As a VISA cardholder, you'll also receive auto rental discounts and no cost auto rental insurance, worldwide travel accident insurance, emergency card replacement and more.
  • Around-the-clock live customer service is available for VISA card questions at 877-506-2399.

Additionally, the VISA Platinum Debit/ATM card offers:

  • Reward points that may be redeemed for an array of goods and services.
  • Cash back based on debit card spending and reward points.
  • Pay-per-use roadside assistance.
  • One-phone-call concierge service to assist with entertainment, business and travel arrangements.
  • A lost luggage reimbursement for checked-on baggage. Reimbursement coverage is up to $5,000 of the difference between the value of the amount claimed and the common carrier's payment. The VISA Platinum Card must be used when purchasing the common carrier ticket.

Brokerage Access® Accounts through NFS offers an optional VISA® Classic Debit/ATM Card with the following features:

  • You can use the funds in your core money market fund to purchase goods and services with your VISA card or make cash withdrawals more than 600,000 locations worldwide, wherever you see the VISA symbol displayed.
  • You can avoid finance charges and monthly credit card bills. Each debit card transaction is automatically deducted from your core money market fund.

Pershing

CorestoneTM Accounts through Pershing provide a variety of features including access to a regular VISA debit card, or a Gold or Platinum MasterCard® debit card, depending on which account you have:

  • With the Corestone Silver Account enjoy use of a VISA debit card, which is available on the account with no-charge access to 6,500 ATMs with up to a $500 daily limit and 24/7 live customer service for all debit card-related questions.
  • With the Corestone Account Gold enjoy cash management services including a Gold MasterCard debit card to access cash and make purchases worldwide, bank and brokerage activity on each of your account statements, cost basis on each statement at no extra charge and 24-hour voice-response account system. All this comes for a nominal annual fee.
  • With Corestone Account Platinum take the next step in cash management services with a Platinum MasterCard debit card, 24-hour customer service and concierge services and more.

Deposits

Periodically, you might wish to make physical check or securities deposits to your brokerage account with LFA. Contact your LFA planner to help you facilitate the deposit process.

Margin

The margin feature of a brokerage account allows you to leverage your purchasing power by borrowing against the securities in your account. It allows investors to take advantage of trading opportunities even when investment cash is not readily available. Additionally:

  • Borrowing costs are generally lower than they are from traditional lending sources.
  • There is no repayment schedule.
  • You have access to cash in a margin line of credit without liquidating securities.
  • Check-writing privileges on a margin line of credit include overdraft protection.

However, consultation with your LFA planner is strongly suggested before you consider margin trading. Margin trading entails considerable risk and is not suitable for all investors. If the market value of securities in a margin account declines, you may be required to deposit more money or securities to maintain your line of credit. Investment losses do not minimize the obligation of a margin account investor to repay a loan in full. If you are unable to do so, LFA may be required to sell all or a portion of your pledged assets. We encourage you to read the margin disclosure. 

Mutual Fund Trading

Mutual Fund Dollar Cost Averaging is a system of buying mutual fund shares in fixed dollar amounts at regular fixed intervals, regardless of the share's price. The investor purchases more shares when prices are low and fewer when prices are high, thus lowering the average cost per share over time.

Dollar cost averaging does not assure a profit or protect against loss in declining markets. Because dollar cost averaging involves continuous investment regardless of changing price levels, you should consider your ability to continue purchasing through periods of all price levels. This feature provides a convenient method for systematic investing in a wide variety of mutual funds from an extensive list of fund families.

Also, money market funds are frequently used as holding funds for assets in mutual fund dollar cost averaging plans. In these cases, ask your LFA planner for a current money market prospectus containing more complete information, including charges, risks and expenses. Please read the prospectus carefully before you invest or send money.

Mutual Fund Systematic Withdrawal provides a convenient method for systematic liquidation of mutual fund positions held in your brokerage accounts.

Tax Corner

The following websites are valuable resources for annual tax information regarding your accounts, including statement information and understanding the safeguarding of your accounts.

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Transfer Service

Opening a brokerage account with LFA can help simplify the management of multiple investments. Assets at banks, credit unions and other financial institutions may be transferred into a single brokerage account, making it easier to implement your investment strategy — and potentially reduce fees. Such a transfer can be prudent if you're nearing or in retirement. Take a look at your various holdings:

  • Are you eligible to receive cash or other assets from an Individual Retirement Account (IRA)?
  • Are you ready to withdraw assets from a pension or profit sharing plan?

A direct rollover of retirement assets to a retirement account with LFA allows you to continue deferring taxes on the assets without a tax penalty. Your LFA planner can help you arrange direct rollovers as well as direct transfers between other custodians and trustees.

Talk to your LFA planner today to hear more about the benefits involved with opening an account with us. 

1Fidelity's "excess of SIPC" insurance is provided by Lloyd's of London together with Axis Specialty Europe Ltd., Markel International Insurance Company, XL Specialty Insurance Company, and Munich Reinsurance Co.