FREQUENTLY ASKED QUESTIONS

By being Fee-Only¹xThe national association of personal financial advisors (NAPFA) defines a fee-only financial advisor as one who is compensated solely by the client with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product.  Neither advisors or their firms may receive commissions, rebates, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations.  "fee-offset" arrangements, 12b-1 fees, insurance rebates or renewals and wrap fee arrangements that are transaction based are examples of compensation arrangements that do not meet the napfa definition of fee-only practice.

Source: napfa.org, Legend wants its clients to be assured that recommendations are always made in the client’s best interest.  Legend believes that if it accepts commissions, clients could view Legend as having a bias.  Therefore, by always providing objective, unbiased advice to its clients, Legend will be working in its clients’ best interests.  Furthermore, Legend is governed by the fiduciary standard of law otherwise known as the fiduciary standard of care.

confusion often arises from the public as well as accountants, attorneys, bankers and other financial professionals as to what the difference is between a Fee-Only¹xThe national association of personal financial advisors (NAPFA) defines a fee-only financial advisor as one who is compensated solely by the client with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product.  Neither advisors or their firms may receive commissions, rebates, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations.  "fee-offset" arrangements, 12b-1 fees, insurance rebates or renewals and wrap fee arrangements that are transaction based are examples of compensation arrangements that do not meet the napfa definition of fee-only practice.

Source: napfa.org advisor and a Fee-BasedxUnlike fee-only, financial advisors who are paid by the client directly (not through commissions), fee-based advisors often earn commissions on products sold as well as charge fees.  Obviously, this is a conflict of interest and not in the best interest of the client.

In short, fee-based advisors are paid by their clients but also receive payments from other sources, such as commissions from financial product sales.

Brokers and dealers (or registered representatives) are required to sell products for commissions that are "suitable" to their clients.

Selecting a financial advisor? ask if they are a registered investment advisor and if they and their firm are fee-only advisors 100.0% of the time – meaning they never receive commissions!  if they don’t receive any commissions, then both the advisor and the firm are fiduciaries.

If the advisor is a broker or a dealer, they are a registered representative, which means they are generally held to a lower legal standard, which requires them to sell products that are “suitable” to their clients.

If an individual is a registered representative of a broker/dealer or is a fee-based advisor, search for their firm’s form adv filing at the U.S. securities and exchange commission website: www.sec.gov.  The adv document includes information that spells out how brokers at the company are compensated.  Check form adv before retaining any financial advisor.  Form adv explains an advisor and advisory firm’s fee structure, but also lists any past misconduct. advisor/broker (they can earn commissions in addition to fees).  Most so-called Fee-BasedxUnlike fee-only, financial advisors who are paid by the client directly (not through commissions), fee-based advisors often earn commissions on products sold as well as charge fees.  Obviously, this is a conflict of interest and not in the best interest of the client.

In short, fee-based advisors are paid by their clients but also receive payments from other sources, such as commissions from financial product sales.

Brokers and dealers (or registered representatives) are required to sell products for commissions that are "suitable" to their clients.

Selecting a financial advisor? ask if they are a registered investment advisor and if they and their firm are fee-only advisors 100.0% of the time – meaning they never receive commissions!  if they don’t receive any commissions, then both the advisor and the firm are fiduciaries.

If the advisor is a broker or a dealer, they are a registered representative, which means they are generally held to a lower legal standard, which requires them to sell products that are “suitable” to their clients.

If an individual is a registered representative of a broker/dealer or is a fee-based advisor, search for their firm’s form adv filing at the U.S. securities and exchange commission website: www.sec.gov.  The adv document includes information that spells out how brokers at the company are compensated.  Check form adv before retaining any financial advisor.  Form adv explains an advisor and advisory firm’s fee structure, but also lists any past misconduct. advisors/brokers call themselves Fee-BasedxUnlike fee-only, financial advisors who are paid by the client directly (not through commissions), fee-based advisors often earn commissions on products sold as well as charge fees.  Obviously, this is a conflict of interest and not in the best interest of the client.

In short, fee-based advisors are paid by their clients but also receive payments from other sources, such as commissions from financial product sales.

Brokers and dealers (or registered representatives) are required to sell products for commissions that are "suitable" to their clients.

Selecting a financial advisor? ask if they are a registered investment advisor and if they and their firm are fee-only advisors 100.0% of the time – meaning they never receive commissions!  if they don’t receive any commissions, then both the advisor and the firm are fiduciaries.

if the advisor is a broker or a dealer, they are a registered representative, which means they are generally held to a lower legal standard, which requires them to sell products that are “suitable” to their clients.

If an individual is a registered representative of a broker/dealer or is a fee-based advisor, search for their firm’s form adv filing at the U.S. securities and exchange commission website: www.sec.gov.  The adv document includes information that spells out how brokers at the company are compensated.  Check form adv before retaining any financial advisor.  Form adv explains an advisor and advisory firm’s fee structure, but also lists any past misconduct. to deceive or trick the public into thinking that Fee-BasedxUnlike fee-only, financial advisors who are paid by the client directly (not through commissions), fee-based advisors often earn commissions on products sold as well as charge fees.  Obviously, this is a conflict of interest and not in the best interest of the client.

In short, fee-based advisors are paid by their clients but also receive payments from other sources, such as commissions from financial product sales.

Brokers and dealers (or registered representatives) are required to sell products for commissions that are "suitable" to their clients.

Selecting a financial advisor? ask if they are a registered investment advisor and if they and their firm are fee-only advisors 100.0% of the time – meaning they never receive commissions!  if they don’t receive any commissions, then both the advisor and the firm are fiduciaries.

If the advisor is a broker or a dealer, they are a registered representative, which means they are generally held to a lower legal standard, which requires them to sell products that are “suitable” to their clients.

If an individual is a registered representative of a broker/dealer or is a fee-based advisor, search for their firm’s form adv filing at the U.S. securities and exchange commission website: www.sec.gov.  The adv document includes information that spells out how brokers at the company are compensated.  Check form adv before retaining any financial advisor.  Form adv explains an advisor and advisory firm’s fee structure, but also lists any past misconduct. is really Fee-Only¹xThe national association of personal financial advisors (NAPFA) defines a fee-only financial advisor as one who is compensated solely by the client with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product.  Neither advisors or their firms may receive commissions, rebates, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations.  "fee-offset" arrangements, 12b-1 fees, insurance rebates or renewals and wrap fee arrangements that are transaction based are examples of compensation arrangements that do not meet the napfa definition of fee-only practice.

Source: napfa.org.  In short, it is not.  The original title of a Fee-BasedxUnlike fee-only, financial advisors who are paid by the client directly (not through commissions), fee-based advisors often earn commissions on products sold as well as charge fees.  Obviously, this is a conflict of interest and not in the best interest of the client.

In short, fee-based advisors are paid by their clients but also receive payments from other sources, such as commissions from financial product sales.

Brokers and dealers (or registered representatives) are required to sell products for commissions that are "suitable" to their clients.

Selecting a financial advisor? ask if they are a registered investment advisor and if they and their firm are fee-only advisors 100.0% of the time – meaning they never receive commissions!  if they don’t receive any commissions, then both the advisor and the firm are fiduciaries.

If the advisor is a broker or a dealer, they are a registered representative, which means they are generally held to a lower legal standard, which requires them to sell products that are “suitable” to their clients.

If an individual is a registered representative of a broker/dealer or is a fee-based advisor, search for their firm’s form adv filing at the U.S. securities and exchange commission website: www.sec.gov.  The adv document includes information that spells out how brokers at the company are compensated.  Check form adv before retaining any financial advisor.  Form adv explains an advisor and advisory firm’s fee structure, but also lists any past misconduct. advisor/broker is a fee and commission advisor/broker.  This title was used commonly until the late 1990s.  The original title of such an advisor clearly indicates how they are compensated.

Fee-BasedxUnlike fee-only, financial advisors who are paid by the client directly (not through commissions), fee-based advisors often earn commissions on products sold as well as charge fees.  Obviously, this is a conflict of interest and not in the best interest of the client.

In short, fee-based advisors are paid by their clients but also receive payments from other sources, such as commissions from financial product sales.

Brokers and dealers (or registered representatives) are required to sell products for commissions that are "suitable" to their clients.

Selecting a financial advisor? ask if they are a registered investment advisor and if they and their firm are fee-only advisors 100.0% of the time – meaning they never receive commissions!  if they don’t receive any commissions, then both the advisor and the firm are fiduciaries.

If the advisor is a broker or a dealer, they are a registered representative, which means they are generally held to a lower legal standard, which requires them to sell products that are “suitable” to their clients.

If an individual is a registered representative of a broker/dealer or is a fee-based advisor, search for their firm’s form adv filing at the U.S. securities and exchange commission website: www.sec.gov.  The adv document includes information that spells out how brokers at the company are compensated.  Check form adv before retaining any financial advisor.  Form adv explains an advisor and advisory firm’s fee structure, but also lists any past misconduct. advisor/brokers receive fees paid by the client, as well as commissions paid to them through their brokerage firm.  The brokerage firm takes its share of commissions generated because of a sale of a stock, bond or other investment product transaction, or the sale of an insurance company product such as life insurance and/or annuities.  Fee-BasedxUnlike fee-only, financial advisors who are paid by the client directly (not through commissions), fee-based advisors often earn commissions on products sold as well as charge fees.  Obviously, this is a conflict of interest and not in the best interest of the client.

In short, fee-based advisors are paid by their clients but also receive payments from other sources, such as commissions from financial product sales.

Brokers and dealers (or registered representatives) are required to sell products for commissions that are "suitable" to their clients.

Selecting a financial advisor? ask if they are a registered investment advisor and if they and their firm are fee-only advisors 100.0% of the time – meaning they never receive commissions!  if they don’t receive any commissions, then both the advisor and the firm are fiduciaries.

If the advisor is a broker or a dealer, they are a registered representative, which means they are generally held to a lower legal standard, which requires them to sell products that are “suitable” to their clients.

If an individual is a registered representative of a broker/dealer or is a fee-based advisor, search for their firm’s form adv filing at the U.S. securities and exchange commission website: www.sec.gov.  The adv document includes information that spells out how brokers at the company are compensated.  Check form adv before retaining any financial advisor.  Form adv explains an advisor and advisory firm’s fee structure, but also lists any past misconduct. advisor/brokers’ investment recommendations are often limited to the products that they recommend/sell and are restricted by the "approved" list, of the broker/dealer.  This list is often partially determined by the amount of compensation received from the financial product.  Many investment products can have higher additional compensation paid based upon the type of product sold.

In comparison, a Fee-Only¹xThe national association of personal financial advisors (NAPFA) defines a fee-only financial advisor as one who is compensated solely by the client with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product.  Neither advisors or their firms may receive commissions, rebates, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations.  "fee-offset" arrangements, 12b-1 fees, insurance rebates or renewals and wrap fee arrangements that are transaction based are examples of compensation arrangements that do not meet the napfa definition of fee-only practice.

Source: napfa.org financial advisory firm receives no compensation from a brokerage firm, a mutual fund company, an insurance company, or any other company.  Fees charged directly to the client by the advisory firm (Legend is an advisory firm.) is the only compensation paid to the advisory firm.

Legend was incorporated on july 23, 1993 and began business operations on january 10, 1994.

In addition to clients located within the pittsburgh metropolitan area, approximately 25.0% of clients live more than 50 miles outside of pittsburgh.  They are located nationwide in addition to a few clients that live in foreign countries.

Legend does not charge any fees to prospective clients until they decide to become clients.  In many instances, this has taken as many as two or three meetings and/or conference calls to discuss the prospective client’s needs and goals, as well as how Legend can assist them.

When applied to financial advisors, a fiduciary is an advisor who has a legal responsibility for managing investment decisions and making all decisions in the best interest of the client at all times.  A fiduciary duty is the highest standard of care.  Unlike many other firms and their advisors/brokers, Legend and its advisors/brokers are governed by the fiduciary standard of law.  Therefore, Legend and its advisors are fiduciaries and are required to work in their clients’ best interests at all times.

Yes, Legend always acts in the client’s best interest and is willing to put that commitment in writing.  It does so by providing potential clients with Legend’s signed copy of the fiduciary oath: putting clients interest first.

Many so-called advisors/brokers are in fact, “individual salespeople” employed by brokerage firms and usually are called brokers, registered representatives, account executives and/or other similar names.  As a result, much of the advice these individuals provide is influenced by the compensation that they receive from the recommended transactions.  Consequently, they are not acting in a fiduciary capacity.

Many so-called advisors/brokers are in fact, “individual salespeople” employed by brokerage firms and usually are called brokers, registered representatives, account executives and/or other similar names.  As a result, much of the advice these individuals provide is influenced by the compensation that they receive from the recommended transactions.  Consequently, they are not acting in a fiduciary capacity.

Legend believes it is important that individuals seeking financial advice retain a securities and exchange commission registered investment advisor (an individual and/or firm) who is a fiduciary that does not receive commissions and who has a fundamental obligation to provide investment advice in clients’ best interests.

For more information about the fiduciary law, visit the “why Legend is a fiduciary?” page.

A product that is being sold for commissions simply must be “suitable” to the client even though that product may not be in the client’s best interest.  A suitability standard is a substantially lower standard than a fiduciary standard.  Brokerage representatives or advisor/brokers and their firms, insurance salespeople and other financial salespeople earn their incomes (commissions) by selling products.

Unlike non-fiduciaries, Legend will disclose any potential conflicts of interest that it is aware of.

Yes. Legend is a U.S. Securities and Exchange Commission registered investment advisory firm.  Its advisory personnel are required to acquire a series 65 license (Uniform Investment Advisor Law – i.e. a license to provide investment advice).

No.  Legend is registered with the Securities and Exchange Commission (sec) as a Fee-Only¹xThe National Association of Personal Financial Advisors (NAPFA) defines a fee-only financial advisor as one who is compensated solely by the client with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product.  Neither advisors or their firms may receive commissions, rebates, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations.  "Fee-offset" arrangements, 12b-1 fees, insurance rebates or renewals and wrap fee arrangements that are transaction based are examples of compensation arrangements that do not meet the napfa definition of fee-only practice.

Source: napfa.org registered investment advisory firm.  Therefore, Legend’s advisory personnel, who are Fee-Only¹xThe National Association of Personal Financial Advisors (NAPFA) defines a fee-only financial advisor as one who is compensated solely by the client with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product.  Neither advisors or their firms may receive commissions, rebates, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations.  "fee-offset" arrangements, 12b-1 fees, insurance rebates or renewals and wrap fee arrangements that are transaction based are examples of compensation arrangements that do not meet the napfa definition of fee-only practice.

Source: napfa.org, are not licensed to sell securities or insurance products of any type for commissions (see below for a further explanation on sales licenses).

Securities sales licenses are required for the sole purpose of earning commission compensation.  Individuals that hold these licenses are employed by brokerage firms, independent broker dealers, insurance agencies and/or insurance companies who are in the business of selling financial products for commission compensation.  Common sales licenses include:

Series 6 – investment company (mutual funds) and variable annuity and insurance contracts representative

Series 7 – general securities representative

Series 24 – general securities principal

Insurance – state life and health insurance licenses – insurance products including fixed and variable annuities

Special Note: Legend does not sell insurance products where commissions would be paid to itself or its personnel.

in contrast to the salespeople mentioned above, Legend’s advisory personnel provides in-depth analysis and non-commission sales-oriented recommendations to clients for either securities and insurance products.

Yes.  Legend offers a secure online vault service.  The electronic vault service helps maintain confidentiality and minimizes the possibility of fraud incidents.  The electronic vault service is used to share information and documents in a secure manner via the internet.  The service is free to clients.

In effect, the service enables clients to deliver documents between themselves and Legend or vice versa in an encrypted manner.  Documents can also be shared with a client’s other professional advisors such as accountants and attorneys.  The vault service also can be used as an electronic filing storage cabinet for organizing personal financial documents.  Documents can be stored in each client’s folders for years, if desired.  Some common examples of documents include:

1. Investment statements and reports
2. Tax documents
3. Income tax returns
4. Financial planning information
5. Insurance policies
6. Estate planning documents such as wills, trust documents, powers of attorney, etc.
7. Other legal documents

Files are encrypted while being uploaded or downloaded.  Each client will receive a set of instructions which specifies the step-by-step process as to how to upload and download files.  In addition, the system sits behind multiple firewalls.

Obviously, Legend would like every client to stay forever.  However, there is no obligation to do so.  Legend discloses in its contracts that clients may terminate a service at any time.  Please note, it is not unusual for some investment organizations to make a client wait until the end of the month, quarter, or even the end of the calendar year.  However, at Legend, a client can terminate their contract at the end of any day.  Of course, Legend requires payment of any fees owed through the date of termination.

Legend’s advisors have met and adhere to all ethical standards set forth by the certified financial planner board of standards, inc.  The certified financial planner™ (CFP^®) certification requires advisors to uphold the mission of the certified financial planner board of standards, inc., which is to benefit the public by granting the CFP^® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning.”

Advisors at Legend, who are members of the national association of personal financial advisors (NAPFA), follow a defined code of ethics that emphasizes objectivity, confidentiality, competence, fairness & suitability, integrity & honesty, regulatory compliance, full disclosure, and professionalism.  There is also a fiduciary oath that napfa members must take, promising to; “always act in good faith and with candor; be proactive in disclosing any conflicts of interest that may impact a client; and not accept any referral fees or compensation contingent upon the purchase or sale of a financial product.”

At this point in time, Legend does not utilize traded stock options, futures contracts and/or warrants in its portfolios.