Branch Office Checklist - The Planners Network

1 1 The Planners Network , Inc. Branch Office Compliance A Registered Investment Advisor Audit Pre-Visit Checklist 42145 Lyndie Lane, Suite 116 Temecula, CA 92591 (951) 676-6288 Please answer the questions below. Use additional sheets if necessary. BACKGROUND INFORMATION AND REPRESENTATIVE STATUS 1. Please list persons in your Office providing investment advice to clients or who are TPN representatives: Name: _____ Office Location: _____ Name: _____ Office Location: _____ Name: _____ Office Location: _____ 2. Please list persons in your Office who are not registered RIA representatives of TPN and briefly describe their job functions: Name: _____ Job Function: _____ Name: _____ Job Function: _____ Name: _____ Job Function: _____ 3. List the states you have clients in, with the number of clients in that state if there are less than 5 clients in the state: _____ _____ 2 4.

2 List the states in which you have a place of business, Office or other place in which you hold yourself out to the public as conducting business from ( seminars held at a hotel). _____ 5. Do you maintain or represent an investment advisor other than TPN? _____ (If so, please provide the name and Form ADV). _____ A. Do any of your clients receive investment advice from both TPN and your other investment advisor? _____ (If so, please specify the names and the nature of the services the client receives from each RIA.) _____ _____ PRACTICE DESCRIPTION 1. Check the types of securities or investments you render investment advice on: a. Equity Securities q Exchange-listed securities q Securities traded over-the-counter q Foreign issuers q Warrants q Corporate debt securities (other than commercial paper) q Commercial paper q Certificates of deposit q Municipal securities q Variable life insurance q Variable annuities q Mutual fund shares q United States government securities b.

3 Options contracts on: q Securities q Commodities c. Futures contracts on: q Tangibles q Intangibles d. Interests in partnerships investing in: q Real estate q Oil and gas interests q Other (Please describe) 3 e. Other investments (please describe) 2. Check the method of securities analysis you use q Charting q Fundamental q Technical q Cyclical q Other 3. Check the types of services you use as a basis for your investment advice q Financial newspapers and magazines q Inspections of corporate activities q Research materials prepared by others q Corporate rating services q Timing Services q Annual reports, prospectuses, filings with Securities and Exchange Commission q Company press releases q Other 4. Check the investment strategies used to implement any investment advice given to clients q Long term purchases (securities held at least a year) q Short term purchases (securities sold within a year) q Trading (securities sold within 30 days) q Short Sales q Margin transaction q Option writing, including covered options, uncovered options or spreading strategies q Other 5.

4 Check the types of fees you charge: q A percentage of assets under management q Hourly charges q Fixed fees (not including subscription fees) q Subscription fees q Commissions q Other 6. Indicate the percentages of your RIA client base which are: _____% Individuals 4 _____% Banks or thrift institutions _____% Investment companies _____% Pension and profit sharing plans _____% Trusts, estates, or charitable organizations _____% Corporations or business entities other than those listed above _____% Other PRACTICE PROCEDURES 1. Explain what your standard procedure is with regard to bringing on a new client, ( What initial documentation is given to the client? What is signed by client?) Please attach forms that you regularly use with your clients or in your practice relating to your investment advisory business. _____ 2. Do you impose a minimum dollar value of assets or other conditions for starting or maintaining an account?

5 If so, what is the amount? a. Have you deviated from this minimum? If so, what is the lowest amount you have accepted? _____ 3. Do you maintain client files? _____ a. Do you maintain an individual file for each client? _____ b. Do clients have an RIA file separate from any other file ( Broker-Dealer)? _____ c. Do these files contain copies of a new account form? _____ d. Do the files contain a new client questionnaire or some other document containing background data on the client? _____ i. Is it signed by the client? _____ e. How do you determine suitability of advice for the client? 5 _____ _____ f. Do you maintain documentation which indicates how the investment recommendation is suitable to the client in light of their background, goals and circumstances, ( investment policy guideline)? If so, please describe. _____ _____ g. How do you keep abreast of your clients circumstances and objectives, ( know your customer ) on an on-going basis?

6 _____ _____ h. How do you ensure suitability on an on-going basis? _____ _____ 4. Do you use a vendor or software to assist you in providing investment advice to a client? If so, please describe. _____ _____ 5. Have you entered into any transactions with clients? (If so, please describe) _____ _____ 6. Have you made a loan to or received a loan from any client? If so, please describe. _____ _____ 7. Have you made you fee contingent upon the client s portfolio making any specified return? If so, please describe. 6 _____ _____ 8. Do you have any foreign clients or clients residing in a foreign country? If so, please describe. _____ _____ 9. Any clients which are banks without a physical presence in the US? If so, please describe. _____ _____ 10. How are account reviews conducted? _____ _____ a. How often? _____ b. What are their frequency? _____ c. Are there different levels of reviews?

7 _____ d. What are the triggering factors? _____ _____ 11. Privacy a. How do you use client s information: _____ _____ b. Do you offer privacy policy to client at time they become a client and annually thereafter? _____ c. Do you offer the client the ADV with schedule F when the client first becomes a client as well as annually thereafter? _____ 12. How do you affect trades for clients? _____ _____ 13. How do you handle errors? 7 _____ _____ 14. Have you received a proxy relating to an RIA client s account? _____ If so, how did you handle it? _____ _____ 15. Do you have ERISA accounts? If so, please identity and provide an AUM for those accounts. _____ _____ 16. Please list and describe any and all written complaints since the earlier of your last compliance audit or becoming a TPN RIA rep (attach copies of the complaint and any responses). _____ _____ a. Have you had any material ( important to a reasonable person) oral complaints within the time period specified above?

8 _____ 17. How are client funds and securities handled? _____ _____ 18. Do you have any discretionary accounts ( do you have or use authority to determine, without express client consent, the securities to be bought or sold or the amount of the securities to be bought or sold or the broker or dealer to be used or the commission rates paid)? If so, please describe. _____ _____ 19. Do you ever change a client s allocation without first receiving consent from the client? _____ 8 FEES 1. Please provide the percentages of billings that you receive from the following business: _____% Investment supervisory service _____% Manage investment advisory accounts not involving investment supervisory services _____% Furnish investment advice through consultations not included in either service described above _____% Issue periodicals about securities by subscription _____% Issue special reports about securities by subscription _____% Issue, not as part of any service described above, any charts, graphs, formulas, or other devices which clients may use to evaluate securities _____% On more than an occasional basis, furnish advice to clients on matters not involving securities _____% Provide a timing service _____% Furnish advice about securities in any manner not described above 2.

9 Fees. a. Is your current fee schedule as stated in ADV? _____ b. What is procedure for billing? (also please attach a copy of one of your last billing statements). _____ _____ c. What is your procedure for fee collection _____ _____ d. Do you share in capital gains with clients? If so, please describe. _____ _____ e. Do you charge any fees in advance? _____ If so, how much and how far in advance? _____ 9 3. Are you paid cash by or receive some economic benefit (including commissions, equipment or non-research services) from a non-client in connection with giving advice to clients? If so, please describe. _____ _____ 4. Do you directly or indirectly compensate any person for client referrals? If so, please describe. _____ _____ 5. Do you receive any compensation for RIA services which is not paid through TPN? If so, please describe. _____ _____ DISCLOSURES AND CONFLICTS 1.

10 Is your business still consistent with what is disclosed in the form ADV and schedule F? (Please note if your practice differs in any way than described in the form ADV). _____ _____ a. How do you obtain the most recent version of the form ADV? _____ _____ b. Do you notify TPN of any changes in your business which are different than what is described in your Schedule F? _____ c. Do you annually (or more frequently) offer your clients a copy of the most recent ADV and your schedule F? _____ How? _____ _____ d. Do you provide clients with a choice of the broker-dealer firm to execute their transactions? _____ 10 2. Do you have any personal interest in any securities recommended to clients? _____ a. Have you recommended to clients that they buy or sell securities or investment products in which you or a related person has some financial interest? If so, please describe the transaction and client.