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Part 2A Appendix 1 of Form ADV: Wrap Fee Program Brochure. Asset Advisory Account - PDF
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1 Part 2A Appendix 1 of Form ADV: Wrap Fee Program Brochure Asset Advisory Account Packerland Brokerage Services, Inc. 432 Security Blvd. Green Bay, WI Telephone: Web Address: March 30, 2016 This wrap fee program brochure provides information about the qualifications and business practices of Packerland Brokerage Services, Inc. If you have any questions about the contents of this brochure, please contact us at or The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Registration with the SEC or with any state securities authority does not imply a certain level of skill or training. Additional information about Packerland Brokerage Services, Inc. also is available on the SEC s website at You can search this site by a unique identifying number, known as a CRD number. Our firm's CRD number is Packerland Wrap Fee Brochure Page 1
2 Item 2: Material Changes The following items, if any, will explain material changes that you should be aware of as a current or prospective client of our advisory programs or services. Each year you will receive either a summary of material changes that were made to the brochure over the previous year or an updated brochure. You can always request a full copy of any of our current disclosures by contacting Aaron A. Doelger, Chief Compliance Officer of Packerland Brokerage Services, Inc., at (920) or The material change since the most recent (April 23, 2015) version of this document includes: Our clearing firm has changed its name from Southwest Securities, Inc. to Hilltop Securities, Inc. We have amended this brochure to reflect the name change throughout the document. Items 4 and 9: We have amended the brochure to reflect a higher limit of $1, for the prepayment of fees six (6) months in advance in cases where federal law preempts state blue sky. Packerland Wrap Fee Brochure Page 2
3 Item 3: Table of Contents Page Item 1. Cover Page 1 Item 2: Material Changes 2 Item 3: Table of Contents 3 Item 4: Services Fees and Compensation 4 Item 5: Account Requirements and Types of Clients 10 Item 6: Portfolio Manager Selection and Evaluation 10 Item 7: Client Information Provided to Portfolio Managers 10 Item 8: Client Contact with Portfolio Managers 11 Item 9: Additional Information 11 Packerland Wrap Fee Brochure Page 3
4 Item 4: Services, Fees and Compensation SERVICES For a complete description of the Registered Investment Advisory Services offered by Packerland Brokerage Services, Inc. (hereinafter referred to as Packerland or the Firm ), please refer to the Firm s Form ADV, Part 2 Firm Brochure, which is incorporated by reference hereto. As disclosed in the Firm brochure, Packerland sponsors the Asset Advisory Account (the "AAA or the Program"), a wrap fee program. A wrap fee program is an advisory program under which a specified fee or fees not based directly on transactions in the client's account is charged for advisory services, which may include portfolio management or advice concerning the selection of other investment advisers, and the execution of the client s transactions. However, clients with accounts in the Program could be charged various clearing fees, exchange fees, postage, handling and other charges on transactions involving the account of which Hilltop Securities, Inc. ( Hilltop ) is custodian. In the Program, Packerland and its Representatives provide investment advice and portfolio monitoring and performance reporting services for an annual fee, which is based on the value of the assets held in an account established under the Program. After receiving advice or recommendations from Packerland and its Representatives, clients who participate in the Program will utilize the Program to make his or her own determination regarding the investments that are best suited to meet the client s goals and objectives. The client understands and agrees that all investment decisions are the sole responsibility of the client. The Program is generally not discretionary in nature (unless otherwise indicated) and the Representative will not make independent investment decisions without first consulting with the client and obtaining agreement with the investment advice being provided. Packerland, or Hilltop, the clearing broker dealer, will also provide various administrative services which include determining the fair market value of assets held in the client s AAA at least quarterly and producing a quarterly portfolio performance report for the client, detailing account assets and summarizing receipts and disbursements of funds, interest and dividends received and account gain or loss for the total account. It is important to note that Packerland will not take possession of or maintain custody of the client's funds or securities, but shall simply monitor the holdings within the Portfolio and make trades within the Portfolio pursuant to the authorization granted by the client. Possession and custody of said funds and/ or securities shall be maintained by Hilltop. If the AAA is established with respect to an individual retirement account or a retirement plan subject to the provisions of the Internal Revenue Code of 1986, as amended, or the Employee Retirement Income Security Act of 1974, as amended, certain investments may be prohibited. For example, cross agency trades, principal trades or trades in which Packerland is acting as agent for another when dealing with the client s AAA are generally not permitted. No such transactions shall be permitted unless the client is separately notified of such transaction and gives consent prior to the completion of such transaction. In addition, Packerland shall comply with ERISA prohibited transactions or obtain any required ERISA prohibited transaction exemption. Packerland Wrap Fee Brochure Page 4
5 This Wrap Fee Program Brochure is limited to describing the services, fees, and other necessary information the clients should consider prior to becoming a client within the Program. For a complete description of the other services and fees offered by our firm, clients should refer to our Form ADV Part 2: Firm Brochure. Please Note that this AAA Program is distinct and different from the Solicitor Services to Third Party Money Managers Program, wherein the Firm s broker-dealer and its Representative acts as a Solicitor and assists their clients in the selection of a third party money manager as investment advisor for the clients portfolios. If you would like to know more about the Solicitor Services to Third Party Money Managers Program, please review the Firm Brochure. You may obtain a copy of our Firm Brochure by contacting us via Aaron A. Doelger, Chief Compliance Officer at or via to Mr. Doelger at OTHER WRAP FEE PROGRAMS Packerland s Firm Brochure describes other wrap fee programs utilized by the Firm, which are sponsored by other parties. For example, the Premier Advisors and the Advantage program are wrap fee programs sponsored by Hilltop, while the Russell Strategies program is sponsored by the Russell Investment Company. The Firm s brochure provides a general description of these wrap fee programs. If you would like further information about these wrap fee programs that are not sponsored by Packerland, please advise your Representative and he or she will advise you how to obtain these brochures. FEES The client agrees to pay Packerland an annual fee, assessed quarterly, for transaction execution and clearing services. The Adviser s annual fee for investment management services provided under this Agreement shall be a percentage of the net value of the Assets under management in accordance with the negotiated fee between Packerland, the Representative and the client. Notwithstanding the negotiable nature of the fee, the maximum annual fee for the Program shall not exceed two and one half percent (2.5%). In addition to Packerland s annual investment management fee, the client shall also incur, relative to certain securities purchases, charges imposed directly at the securities level (e.g. mutual fund advisory fees and other fund expenses). No portion of Adviser Compensation shall be based on capital gains or capital appreciation of the Assets except as provided for under the Investment Advisers Act of If the client goes over the 150% account turnover ratio, Packerland may charge additional clearing fees, exchange fees, postage, handling and other charges on transactions involving the account. As of the date of this brochure, the fee schedule for the additional charges is: Packerland Wrap Fee Brochure Page 5
6 Equities: Common Stocks, Preferred stocks & Exchanged Traded Funds. Mutual Funds: Purchases and redemptions (full and partial) of selected open-end mutual funds available to Program accounts. Periodic Investments/Systematic Withdrawals/Periodic Exchanges/Subsequent Purchases have $1.50 ticket charge. $24.00 per transaction $0 to $ $2.45 per transaction $2001 to $ $4.55 per transaction $5001 to $ $7.00 per transaction $25001 to $ $10.50 per transaction $75001 and up - $14.00 per transaction Options: $ $1 per contract charge Fixed Income: Corporate Bonds - $36.50 Municipal Bonds - $24.00 Certificate of Deposits - $24.00 Unit Investment Trust - $17.50 Packerland may in its discretion from time to time reduce or waive such execution and clearing fees for a particular transaction or transactions. The client may also incur charges for other account services provided by Packerland or its clearing firm, Hilltop. Under the AAA Program, Packerland s broker-dealer is appointed by the client as sole and exclusive broker with respect to the client s AAA for the execution of purchase and sale transactions. How are Fees Charged? This annual fee shall be paid on a calendar quarterly basis, in advance, based upon the value of the client s AAA, net of any AAA Fee Exempt Investments, as determined by Hilltop. No increase in the annual fee shall be effective without prior written notification to the client. Unless the client pays the Packerland directly for its services (in which event Packerland s fee is due and payable upon receipt of Packerland s billing invoice), the client authorizes the Custodian of the Assets to charge the Account for the amount of the AAA Fee and to remit such fee to Packerland in accordance with required regulatory procedures. What services are covered by the Program fees? Packerland and its Representative will provide the client, upon acceptance of the client s AAA account, investment advisory services, including portfolio reviews and recommendations, with respect to various investments. Packerland, or Hilltop, the clearing broker dealer, will also provide various administrative services which include determining the fair market value of assets held in the client s AAA at least quarterly and producing a quarterly portfolio performance report for the client detailing account assets and summarizing receipts and disbursements of funds, interest and dividends received and account gain or loss for the total account. Packerland will not take possession of or maintain custody of Packerland Wrap Fee Brochure Page 6
7 the client's funds or securities, but shall simply monitor the holdings within the Portfolio and make trades within the Portfolio pursuant to the authorization granted by the client. Possession and custody of said funds and/ or securities shall be maintained by Hilltop. What services are not covered by the Program fees? The Program fees do not cover brokerage to the extent trades are conducted through brokers or dealers other than Packerland or its clearing firm, Hilltop, and custody charges if the client uses an entity other than Hilltop as the custodian. Similarly, as discussed above, if the client goes over a 150% account turnover rate, Packerland may charge additional clearing fees, exchange fees, postage, handling and other charges on transactions involving the account in accordance with the schedule then in place at the time (as of the date of the brochure, the current schedule is listed above, but may be subject to change at the sole discretion of Packerland). The Program fees do not include expenses of mutual funds and exchange traded funds ( ETFs ) such as fund management fees charged to each fund's investors. Mutual funds contain internal expenses which are apart from and in addition to AAA fees and are described in the respective funds prospectuses. Certain funds offered in the Program, while not having sales charges or having sales charges waived, may assess distribution fees, such as those assessed pursuant to SEC Rule 12b-1 of the Investment Company Act of 1940, as amended ( 12b-1 Fees ). A portion of these 12b-1 Fees may be paid to Packerland and its Representative. Other Fees and Expenses. the clients may incur charges for other account services provided not directly related to the execution and clearing of transactions, including, but not limited to, IRA custodial fees, safekeeping fees, wire transfer fees, interest charges on margin loans, exchange fees, fees for transfers of securities and any and all fees other than transaction fees for the purchase and sale of securities, the fees of the custodian and reporting services. Additional Information about Program fees. Under the Program, the participant receives investment advisory services, the execution of securities brokerage transactions, custody and reporting services for a single specified Program Fee. Clients are cautioned that depending on the level of fees charged by the executing broker-dealer, and the amount of portfolio activity in the clients' accounts, the value of the services provided under this Program may exceed the total cost of such services had they been provided separately. In addition, the Program Fee may be higher or lower than that charged by other sponsors of comparable wrap fee programs. GENERAL INFORMATION Termination of the Advisory Relationship: A client agreement may be canceled at any time, by either party, for any reason upon receipt of written notice. Packerland and the client may terminate the Agreement for the AAA Program at any time by providing written notice of such election to the other party. This Agreement will also terminate automatically upon receipt by Packerland or Hilltop of legal notice of the death of the client. Termination of this Agreement will not affect the client s liability or responsibility with regard to transactions for the client s AAA, and the client agrees to be responsible for any commissions, fees or expenses prior to or after such termination. Transaction processing charges paid to Packerland are not subject to refund in the event of termination of this Agreement because they will be incurred at the time a service is performed. Upon request, prior to transfer of assets, all fees due under this Agreement at termination will be Packerland Wrap Fee Brochure Page 7
8 deducted from the client s AAA before assets are delivered from the account. The client may also terminate this Agreement within five (5) business days of the Effective Date without payment of any fee for Packerland s services. Upon termination of any account, any prepaid, unearned fees will be promptly refunded within 30 days. In calculating a client s reimbursement of fees, we will pro rate the reimbursement according to the number of days remaining in the billing period. Grandfathering of Minimum Account Requirements: Advisory clients are subject to Packerland s minimum account requirements and advisory fees in effect at the time the client entered into the advisory relationship. Therefore, our firm's minimum account requirements may differ among clients. ERISA Accounts: We offer Non-discretionary Investment Advisory Services, Discretionary Investment Management Services, and Administrative Services (each a form of Retirement Plan Services ) that are designed to assist plan sponsors of employee benefit plans ( Sponsor(s) ). When providing any Non-discretionary Investment Advisory Service, we will solely be making investment recommendations to Sponsor and Sponsor retains full discretionary authority or control over assets of the Plan. We agree to perform any Non-discretionary Investment Advisory Service to the Plan, as a fiduciary, as defined in ERISA Section 3(21)(A)(ii), and will act in good faith and with the degree of diligence, care and skill that a prudent person rendering similar services would exercise under similar circumstances. When providing any Discretionary Investment Management Service, we will be exercising discretionary authority or control over assets of the Plan. We will have full power and authority to select, monitor, remove and replace the investment options offered under the Plan; provided, however, we will not have any power or authority to direct the investment of Plan assets to any investment. We agree to perform any Discretionary Investment Management Service to the Plan as a fiduciary, as defined in ERISA Section 3(21)(A)(i), and will act in good faith and with the degree of diligence, care and skill that a prudent person rendering similar services would exercise under similar circumstances. When providing any Administrative Service, we may support the Sponsor with Plan Governance and Committee Education, Vendor Management and Service Provider Selection and Review, Investment Education or provide Plan Participant Non-Fiduciary Education Services. We agree to perform any Administrative Service solely in a capacity that would not be considered a fiduciary under ERISA or any other applicable law. Advisory Fees in General: Clients should note that similar advisory services may (or may not) be available from other registered (or unregistered) investment advisers for similar or lower fees. Limited Prepayment of Fees: Under no circumstances do we require or solicit payment of fees in excess of $ more than six months in advance of services rendered unless federal statutes preempt the state blue sky laws. In that case, we will not require or solicit payment of fees in excess of $1, more than six months in advance of services rendered. COMPENSATION In addition to Packerland being a registered investment adviser, our firm is registered as a brokerdealer and is a member of FINRA. Under the AAA Program, Packerland s broker-dealer is appointed by the client as sole and exclusive broker with respect to the client s AAA for the Packerland Wrap Fee Brochure Page 8
9 execution of purchase and sale transactions. Since the Representative is an investment advisory representative of Packerland, the Representative will receive compensation in the form of a portion of all advisory fees paid to Packerland pursuant to this Agreement. Further, the Representative may also be a registered securities representative affiliated with Packerland. In said capacity this individual may provide securities brokerage services through Packerland which involve securities not transacted in the client s AAA account pursuant to the terms and conditions of this Agreement. Such securities transactions may result in a commission to be paid to Packerland and, if so, the affiliated registered representative will receive a portion of said commission. Some transactions executed for an AAA account may, from time to time, be effected in the secondary or third market. In this event, Packerland or its custodian, Hilltop may receive other remuneration or compensation and will furnish the source and amount upon written request. The client is advised that mutual funds contain internal expenses which are apart from and in addition to AAA fees and which are described in the respective funds prospectuses. Certain funds offered in the Program, while not having sales charges or having sales charges waived, may assess distribution fees, such as those assessed pursuant to SEC Rule 12b-1 of the Investment Company Act of 1940, as amended ( 12b-1 Fees ) which may be paid to Hilltop. the client understands and acknowledges that Packerland or Hilltop will retain any fees, including but not limited to, 12b-1 Fees, that are paid by such mutual funds and further acknowledges that any reduction in fees, if deemed appropriate by the Representative managing the account, charged to accounts containing any mutual fund is intended to offset any 12b-1 Fee that may be payable by a mutual fund in which the client s AAA is invested. A portion of these 12b-1 Fees may be paid to Packerland. The client is referred to the respective mutual fund prospectuses for detailed information about such fees. The advisory fees described in Section 6 cover only the services of the Program. As part of the program, the client should receive of a copy of the mutual fund prospectuses and understands that the Program will charge separate fees and expenses as set forth herein. All or a portion of the AAA may be held in cash or cash equivalents issued by money market mutual funds. The client understands that Packerland or Hilltop may receive fees for the services provided as set forth in the prospectuses of these mutual funds and consents to the use of these funds in connection with the Program to the extent permitted by law. Depending on the fee percentage charged, the trading activity and types of securities utilized in the client s AAA, the total costs to the client may be more or less than the client would incur if the client paid separately for investment advice, brokerage and other services provided by the Program. Packerland may, therefore, have a financial incentive to recommend the Program over other services offered by Packerland or Hilltop. Packerland Wrap Fee Brochure Page 9
10 Item 5: Account Requirements and Types of Clients MINIMUM ACCOUNT REQUIREMENTS Participation in this program is subject to certain minimum account requirements. Accordingly, we have established $25, as a minimum investment to participate in this program. Packerland, at its sole discretion, may allow "householding", which utilizes the combination of various accounts within a household to meet the minimum requirements of the AAA account. AAA Program Clients must use Packerland as to the broker dealer and Hilltop as the custodian to be used in managing their account. As a condition for program participation, clients are required to direct us to custody their assets with and to place trades through Hilltop. Hilltop is an unaffiliated FINRA-member broker dealer and the clearing firm and custodian that we use for brokerage accounts. Packerland has negotiated an arrangement with Hilltop to provide custodial and brokerage services as part of the AAA Program. As such, we reserve the right to decline acceptance of any client account for which the client directs the use of a broker dealer/custodian other than Hilltop. Please refer to the "Other Financial Industry Activities and Affiliations" section of Item 9 for additional information. TYPES OF CLIENTS Packerland Brokerage Services, Inc. provides advisory services in the AAA Program to all clients listed in the Firm brochure. Item 6: Portfolio Manager Selection and Evaluation Packerland's AAA Program, as described in the Firm brochure, is similar to a simple brokerage account (mutual funds and/or securities are held at Hilltop, our clearing firm). Similar to a brokerage account, the investment adviser interviews the client to determine the client's needs, risk tolerance and time horizons to arrive at recommendations for the client. Inc. Under the program, Packerland will not take possession of or maintain custody of the client s funds or securities, but will simply monitor the holdings within the Portfolio and make trades within the Portfolio pursuant to the authorization granted by the client. Possession and custody of the said funds or securities will be maintained by Hilltop as custodian. In the Program, Packerland and its Representatives provide investment advice and portfolio monitoring and performance reporting services. After receiving advice or recommendations from Packerland and its Representatives, the clients who participate in the Program will utilize the Program to make his or her own determination regarding the investments that are best suited to meet the client s goals and objectives. The client understands and agrees that all investment decisions are the sole responsibility of the client. The Program is generally not discretionary in nature (unless otherwise indicated) and the Representative will not make independent investment decisions without first consulting with the client and obtaining agreement with the investment advice being provided. Item 7: Client Information Provided to Portfolio Managers Packerland s Representatives are responsible for developing an initial financial profile of the prospective client. Prior to opening an account, we assist the Representative in determining a participant's profile for the Program by obtaining from the participant appropriate information (i.e., Packerland Wrap Fee Brochure Page 10
11 investment objectives, risk tolerance, time horizon, and any reasonable restrictions the client wishes to impose upon the management of the account). Initial investment strategy is discussed with the client based on an assessment of the information provided by the client and only implemented at the direction of the client. While we provide the client with periodic reminders, it remains the client's responsibility for the ongoing suitability of any prior determined investment strategies and/or objectives. When the Firm has knowledge of any changes in a client s suitability, it will review the portfolio to determine whether the strategies remain suitable in light of those changes. Packerland and its Representatives are in regular contact with each Program Client and will directly contact each wrap fee program client on a regular basis (in accordance with the client s needs and desire) to verify that there has been no change in the client's financial circumstances and/or investment objectives, and determine whether the client wishes to impose any reasonable restrictions on the management of the account(s). Any such changes or requests shall be taking into consideration and appropriate adjustments to the client's portfolio be made. Item 8: Client Contact with Portfolio Managers Packerland s Representatives, who assist in the implementation of the client s strategies, are in regular contact with the clients. There are no restrictions placed on the client s ability to meet and consult with their portfolio managers. Item 9: Additional Information Disciplinary Information We are required to disclose any legal or disciplinary events that are material to a client's or prospective client's evaluation of our advisory business or the integrity of our management. Our firm and our management personnel have no reportable disciplinary events to disclose. Other Financial Industry Activities and Affiliations In addition to Packerland Brokerage Services, Inc. being a registered investment adviser, our firm is registered as a FINRA member broker-dealer. Under the AAA Program, Packerland s brokerdealer is appointed by the client as sole and exclusive broker with respect to the client s AAA for the execution of purchase and sale transactions. The custodian of the accounts in the AAA program, Hilltop, is Packerland s clearing firm. Although unaffiliated with Packerland, Hilltop may derive some benefits from participants in the AAA program, as described in Item 4. above, including but not limited to 12b-1 Fees, that are paid by such mutual funds, and fees for the services provided as set forth in the prospectuses of these mutual funds. Depending on the fee percentage charged, the trading activity and types of securities utilized in the client s AAA, the total costs to the client may be more or less than the client would incur if the client paid separately for investment advice, brokerage and other services provided by the Packerland Wrap Fee Brochure Page 11
12 Program. The Representative may, therefore, have a financial incentive to recommend the Program over other services offered by Packerland/Hilltop. Code of Ethics, Participation or Interest in Client Transactions and Personal Trading Please refer to Packerland s Form ADV Part 2A Firm Brochure, which is hereby incorporated by reference. Review of Accounts While the underlying securities within Individual Portfolio Management Services accounts are continually monitored, these accounts are reviewed at least annually, or in accordance with customer direction. Accounts are reviewed in the context of each client's stated investment objectives and guidelines. More frequent reviews may be triggered by material changes in variables such as the client's individual circumstances, or the market, political or economic environment. These accounts are reviewed by the Packerland Representative with the client, unless directed otherwise by the client. These accounts are also subject to review by Packerland s Compliance Department, or other designee, as part of the Compliance Department s routine inspection of the representative s branch office, targeted examination of the Representative or a specific investment, routine or special surveillance program or random inspection of the Representative and/or the Representative s accounts. Reports: Packerland, or Hilltop, the clearing broker dealer, will also provide various administrative services which include determining the fair market value of assets held in the client s AAA at least quarterly and producing a quarterly portfolio performance report for the client detailing account assets and summarizing receipts and disbursements of funds, interest and dividends received and account gain or loss for the total account. Under the terms of the Program, the client will verify all portfolio performance reports prepared by Hilltop for Packerland and will acknowledge the correctness of said reports upon request. The client shall immediately notify Packerland of any discrepancy in such reports and such reports shall be deemed conclusive if no discrepancy is reported in writing within ten (10) days after being transmitted to the client. Client Referral and Other Compensation It is Packerland's policy not to engage solicitors or to pay related or non-related persons for referring potential clients to our firm. Financial Information We do not require our clients to pay fees in excess of $ more than six months in advance of services rendered unless federal statutes preempt the state blue sky laws. In that case, we will not require or solicit payment of fees in excess of $1, more than six months in advance of services rendered. As an advisory firm that maintains discretionary authority for client accounts, we are also required to disclose any financial condition that is reasonable likely to impair our ability to meet our contractual obligations. Packerland Brokerage Services, Inc. has no additional financial circumstances to report. Packerland has not been the subject of a bankruptcy petition at any time during the past ten years. Packerland Wrap Fee Brochure Page 12
Part 2A of Form ADV: Firm Brochure. Packerland Brokerage Services, Inc. 432 Security Blvd. Green Bay, WI 54313 9709
Part 2A of Form ADV: Firm Brochure Packerland Brokerage Services, Inc. 432 Security Blvd. Green Bay, WI 54313 9709 Telephone: 920 662 9500 Email: aarond@pbshq.com Web Address: https://www.packerlandbrokerage.com