Types of Advisory Services Offered by Stifel
Our services include discretionary and non-discretionary1
Advisory services, which generally involve account and/or
portfolio management, asset allocation and related services, and
recommendation of, or assistance with the selection of, securities
and/or investment managers (“Managers”). Such Managers
include firms that are independent of our firm (“Independent
Managers”) as well as firms owned by our parent company,
Stifel Financial Corp., or one of its subsidiaries (“Affiliated
Managers”).
We enter into written advisory agreements (each, an “Advisory
Agreement”) with clients acknowledging our Advisory
relationship and disclosing our obligations when acting in an
Advisory capacity to the client. We provide Advisory services
to a variety of clients, including individuals, corporations and
other businesses, pension or profit sharing plans, employee
benefit plans, trusts, estates, charitable organizations, state and
municipal government entities, private funds, educational
institutions, insurance companies, and banks or thrift institutions
(“Clients”). We generally provide Advisory services through
our investment advisory representatives (“Financial Advisors”),
who determine the services that are most appropriate for Clients
based on each Client’s stated individual investment goals,
financial circumstances, and other information provided by the
Client. We are able to fulfill a Client’s wealth management
needs by acting as broker-dealer, investment adviser, or both.
Our Advisory services cover many types of debt and equity or
equity-related securities of domestic and foreign companies, as
well as national, state, and local government issuers, whether
trading on an exchange or over-the-counter. In addition to
stocks and fixed income securities, we recommend or invest
Client assets in other types of investments, such as rights and
warrants, options, certificates of deposit (“CDs”), mutual funds
and other open and closed-end funds, exchange traded products
(“ETPs”), including exchange traded funds (“ETFs”), unit
investment trusts (“UITs”), real estate investment trusts
(“REITs”), American Depositary Receipts (“ADRs”), foreign
ordinary shares, publicly traded master limited partnerships
(“MLPs”), private investment vehicles (including, but not
limited to, hedge funds and private equity funds), and other
investments deemed appropriate for our Clients.
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Throughout this brochure and depending on the type of program
referenced, the term “Portfolio Manager” shall refer to, as
applicable, a) Stifel where our firm or your Financial Advisor (as
the firm’s agent) provides discretionary portfolio management
services and/or b) an Independent Adviser or Affiliated Adviser
that provides discretionary portfolio management services.
Assets Under Management
As of December 31, 2023, we had approximately
$93,479,356,739 of Client assets that were managed on a
discretionary basis and $55,769,579,424 in non-discretionary
assets.
Our Responsibilities as an Investment Adviser
When serving as an investment adviser to Clients in our
Advisory programs (“Programs”), we are acting as a fiduciary
with respect to the assets held in accounts covered by the
Advisory Agreements. In our capacity as an investment adviser,
we are held to the legal standards set forth in the Investment
Advisers Act of 1940 (the “Advisers Act”), certain state laws,
and common law standards applicable to fiduciaries as well as,
where applicable obligations imposed under the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”) or other relevant regulations for Advisory retirement
accounts. Such standards include the duty of care, including the
obligation to have a reasonable basis for believing that our
investment recommendations are suitable and consistent with
Client’s stated objectives and goals (including any applicable
investment restrictions) and the duty of loyalty, including the
obligation to provide Clients with full disclosure of material
conflicts of interest. Our duties of care and loyalty differ
depending on the terms of relationship with the Client, the type
and level of agreed services, and other factors, including whether
we provide non-discretionary versus discretionary services or
when we provide episodic (e.g., financial planning) versus
continuous advice. Our duty of care may be defined in our
Client agreement, and our duty of loyalty may be modified or
limited through Client disclosure and affirmative or implied
Client consent by receiving and not objecting to the disclosure.
Additional information about our fiduciary obligations,
including some of the policies and procedures that we undertake
to fulfill those obligations, is available throughout this brochure,
including under the section entitled “Participation or Interest in
Client Transactions.”
Investment Restrictions
If you have accounts in our discretionary programs, you may
impose investment restrictions on any of those accounts (or
specific assets within the accounts), such as restricting
investments in specific securities, types of securities, industries,
or sectors. We generally require Clients to provide requests for
investment restrictions in writing. If we determine that your
proposed investment restrictions are reasonable and accept them,
we and/or the Adviser you have selected will be responsible for
implementing, and managing the account, consistent with the
restrictions that you have imposed. It is important for you to
understand that, if the restrictions are approved and imposed on
your account, the performance of your account will differ (even
significantly) from the performance of other accounts in the
same portfolio, without similar restrictions. You may request in
writing that specific mutual funds or ETFs not be purchased in
your discretionary Advisory account(s); however, we cannot
accommodate requests to restrict the underlying securities that
may be purchased or sold by mutual funds, ETFs, private funds,
or other collective investment vehicles in Advisory accounts.
For accounts in which Stifel has discretionary trading authority,
where an investment restriction applies to prevent the purchase
of a security, the funds that would have been invested in the
restricted position will either be invested in cash equivalents
(including short-term fixed income instruments), other substitute
securities, or reallocated among other positions at our discretion.
A higher than usual allocation to cash, cash equivalents, or other
securities as a result of investment restrictions will impact the
performance of the account relative to other accounts that are
fully invested.
We define and/or identify certain permissible category
restrictions (e.g., prohibiting investments in particular industries
or based on social consciousness) by reference to information
provided by a third-party service provider using the provider’s
proprietary methodologies. If you elect to impose investment
category restrictions on a discretionary account, we will apply
the restrictions based on our internal policies, by referencing the
third-party service provider’s information. The service provider
typically flags securities as violating specific category
restrictions based on the issuer’s revenue or asset levels from the
restricted activity(ies). The threshold or level at which revenue
or assets are considered to have violated a particular restriction
can change at any time, without notice to you. In addition, you
should note that Managers with trading responsibility over your
account(s) may use their own trading systems and, as a result,
use different reference points than Stifel in defining prohibited
investments, activity, or revenue levels for category restrictions.
As set forth above, we accept investment restrictions only if we
conclude that those restrictions are reasonable and can be
accommodated through our current monitoring processes. We
will reject any proposed investment restriction that does not
meet this standard, in which case you have the option of (i)
modifying your restrictions until acceptable to us or (ii) not
opening or otherwise terminating your discretionary account(s)
with us.
We generally do not accept the responsibility for monitoring
investment restrictions in non-discretionary accounts. As a non-
discretionary account, you must approve recommendations for
your account before the related trades can be implemented. We
expect you to consider your applicable investment restrictions
when considering recommendations for your non-discretionary
account(s), and to approve a trade only to the extent you
conclude that the recommendation does not violate your
investment restrictions.
Investment Policy Statements
We do not accept any responsibility for monitoring compliance
with a Client’s investment policy statement (“IPS”) unless the
Client account is in one of our discretionary programs and the
Client is using either a Stifel-approved template for the IPS, or
our home office personnel have reviewed the Client’s IPS and
determine that the requirements and limitations of the IPS are
reasonable and that we are capable of monitoring them, and we
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have confirmed in writing that we have accepted responsibility
for monitoring compliance with the IPS.
Clients may submit their IPS for review and will be notified in
writing if and when their IPS has been accepted by Stifel.
Please note that you are solely responsible for monitoring
compliance with your own IPS, even where you have provided
a copy of the IPS to your Financial Advisor(s) until you have
received written notice from Stifel of its acceptance of your
IPS.
In the event that you update your IPS, you are responsible for
providing Stifel with the updated document for our review and
approval. If we agree that we can continue to monitor your IPS
with the new guidelines, we will notify you in writing of our
acceptance. Stifel will not be responsible for monitoring any
new guidelines until we have notified you of our acceptance.
Stifel’s goal is to follow your IPS. However, market, economic,
or geopolitical conditions may impact our ability to do so and, in
those cases, Stifel’s policy is to do what it deems to be in the
client’s best interest.
ADVISORY PROGRAMS OFFERED BY STIFEL
Wrap Fee Programs
As set forth on the cover page, we offer various Advisory
Programs to our Clients, including “wrap fee” Programs for
which we are the sponsor and, in certain Programs, both the
sponsor and Portfolio Manager for investment portfolios
(“Portfolio(s)”) within the Program. A “wrap fee” is an annual
fee paid by the Client that is intended to cover applicable
services to the account, including investment advice and, where
applicable, may include portfolio management, trade execution,
clearing, settlements, custody, administrative, and account
reporting services provided by Stifel, as well as investment
advice and/or portfolio management services provided by an
Adviser to the Portfolio. To the extent that portfolio
management or similar services for a Portfolio are provided by
an Adviser, a portion of the wrap fee is paid to the Adviser for
its services – please refer to the section “Fees and
Compensation” below for additional details about our wrap fees
(also called Advisory Account Fees).
The wrap fee Programs that we offer include the Opportunity,
and Investment Management Consulting Programs, whereby an
Affiliated or Independent Adviser acts as your discretionary
portfolio manager, or provides their model Portfolio to us for our
implementation. Stifel also offers discretionary investment
advisory services through the Solutions and Fundamentals wrap
fee Programs. Our non-discretionary investment advisory wrap
fee Programs include the Horizon and Connect Program (where
Stifel recommends an Adviser with which you enter into a
separate advisory agreement). Finally, under the Custom
Advisory Portfolio (“CAP”) Program, our firm offers clients
investment management services utilizing various investment
products within a single account, whose Portfolios may be a
combination of any of internal and/or external model Portfolios,
mutual funds and/or ETFs. Clients determine their selection of
either the Client-Directed option or the Financial Advisor-
Directed option.
Each of these wrap Programs is further described in the Stifel
Wrap Fee Programs Brochure, which is available to you free,
upon request.
Fee-Based Financial Planning
We offer fee-based financial planning services that are covered
in great detail in a separate disclosure brochure. Clients signing
up for our fee-based financial planning services should note that
wealth planning services are generally provided at no charge as a
service incidental to our brokerage relationship with Clients.
Other Advisory Programs
We also offer Advisory services to Clients under a number of
non-wrap fee Programs. You may select from the following
other non-wrap fee Advisory Programs as appropriate for your
needs:
Stifel Vantage Program
Our Vantage Program (“Vantage”) offers discretionary account
management by certain Financial Advisors who are approved to
participate in the Vantage Program.
If you choose to enroll in the Vantage Program, your Financial
Advisor will assist you in selecting an appropriate strategy for
your Vantage account once you have established your
investment objectives, goals, risk tolerance, and an overall asset
allocation. To implement your investment objectives for the
account and based on your risk tolerance, your Financial
Advisor may utilize fundamental, qualitative, quantitative,
and/or technical research published by Stifel or another source.
Your Financial Advisor may also employ short-term purchases
and/or limited options trading in your Vantage account, provided
such strategies are suitable and appropriate for you and, as
applicable, approved for the account. Our Financial Advisors
use different strategies to manage their discretionary Client
accounts; your Financial Advisor may utilize multiple strategies
and/or may customize a strategy to fit your particular situations
in ways that are different from other Clients. As such, the
performance of your Vantage account will differ (at times,
materially) from the accounts of similarly situated Clients for
your Financial Advisor and/or other Stifel Financial Advisors.
Subject to such limitations
as we may impose from time to time,
our Financial Advisors invest in various kinds of equity and
fixed income securities in Vantage accounts. You are
encouraged to discuss with your Financial Advisor and review
how your Vantage account will be managed, the types of
investments to be made, as well as the risks that will be
applicable to your Vantage account. As with our other
discretionary Programs, you may impose reasonable investment
restrictions on your Vantage account.
Vantage Commission Schedule: If you enroll an account in the
Vantage Program, you will pay transaction-based charges
(commissions) for the services provided by your Financial
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Advisor and Stifel. Commissions are charged based on our
standard commission schedule (subject to negotiation in certain
circumstances) for brokerage transactions.
The Vantage Program is generally not available to IRAs and is
not available to retirement accounts subject to ERISA.
Conflicts of Interest
It is important that you understand that, due to the
commission-based structure of the Vantage Program, Stifel
and your Financial Advisors have a conflict of interest with
respect to transactions implemented in your Vantage account
due to the fact that your Financial Advisor’s compensation
rises as more transactions are implemented in the account
(conversely, the Financial Advisor is not paid if no
transactions are implemented in the account). You should
carefully consider whether a Vantage account is appropriate
for your investment objectives, risk tolerance, time horizon,
and investment experience. While we do not consider the
appropriateness of the Vantage Program for a Client solely
based on a comparison to wrap fee programs, the Vantage
Program may not be suitable for you if you (and/or your
Financial Advisor) anticipate a high level of trading activity
where the transaction costs could potentially exceed those that
would otherwise be charged under a discretionary wrap
Program. We highly encourage you to review all available
options at Stifel with your Financial Advisor(s).
Stifel Summit Program
Under our Summit Program (“Summit”), our Financial Advisors
serve Clients who are seeking investment advice for assets held
and traded through other custodians or other broker-dealer firms.
Clients that may benefit from a Summit relationship include (but
are not limited to): municipalities, endowments, foundations,
corporations, high-net-worth individuals, and sponsors and/or
trustees of qualified retirement plans subject to the ERISA.
We typically offer non-discretionary advice under the Summit
Program. Our services include, for example: analysis of asset
allocation and style consistency; due diligence and/or advice
regarding use of third-party investment managers; evaluation of
investment risk and performance; and analysis and/or
recommendations on the purchase and sale of individual
investment vehicles including stocks, bonds, mutual funds,
UITs, ETFs, closed-end funds, and/or options. Our Financial
Advisors provide investment advice to Clients in accordance
with each Client’s stated investment objectives, risk tolerance,
time horizon, and investment experience. If you sign up for such
an arrangement, you will be solely responsible for implementing
any non-discretionary advice provided by the Financial
Advisor(s).
In limited circumstances, we will approve arrangements under
which our Financial Advisors provide discretionary investment
management services through the Summit Program. In such
event, you (not Stifel or the Financial Advisor) will determine
the specific qualified independent custodian and the broker-
dealer firm(s) to execute transactions in your account. In such
cases, while our Financial Advisors may direct the specific
securities to buy and sell for the account, your directed broker-
dealer firm(s) provide brokerage execution services.
In all cases and without regard to whether our Financial Advisor
is providing discretionary or non-discretionary services under
the Summit arrangement, you will be solely responsible for all
brokerage and custodial charges imposed by your independent
qualified custodian.
If you elect to enroll in the Summit Program in connection
with your assets at other institutions, you should be aware that,
through our wrap Programs, you could pay a wrap fee for
investment management, execution, and custodial services
through Stifel. These wrap Programs may be a cheaper
alternative than using the Summit Program and paying
separate fees to different institutions for advice, custody, trade
execution, and clearing; we highly encourage you to review all
available options at Stifel with your Financial Advisor(s).
Summit Fee Schedule: For our services under a Summit
arrangement, we charge a fee at an annual rate of up to 1.00% of
the total value of investments under the arrangement. You can
typically negotiate the fee for your specific arrangement with
your Financial Advisor. In certain circumstances, we may agree
to a flat dollar fee arrangement, which may be payable at once or
in installments (e.g., monthly, quarterly, or other agreed
frequency).
In general, the initial fee for any Summit arrangement is
calculated based on the account’s most recent account statement,
quarterly or otherwise. The fee is typically billed quarterly in
advance, although some relationships may bill in arrears and/or
at a frequency that is not quarterly.
Additional Information on Services to Retirement and
Benefit Plans: We provide investment advice, education, and
other services to various kinds of retirement and benefit plans,
including defined contribution plans (e.g., 401(k) plans), defined
benefit plans, nonqualified retirement plans, deferred
compensation plans, and others. Our services to plans typically
include one or more of the following non-discretionary services:
• Assisting plan fiduciaries in reviewing the plan design to
improve efficiency and/or reduce costs. This may include
an analysis of plan terms, as well as an evaluation of service
providers;
• Assisting plan fiduciaries in creating, reviewing, and/or
updating investment policy statements;
• Asset allocation and creating an investment menu, including
diligence of potential investments and/or periodic
monitoring of the selected investments (other than any
securities that are specifically excluded pursuant to the
agreement with the plan); and,
• Participant education services on investment-related topics
(under limited circumstances, note that these services may
include provision of investment advice to participants).
We may also provide such other agreed-upon services as are set
forth in our agreement with the plan. For example, from time to
time, we may agree to provide discretionary investment services
to plans, including in selecting and implementing a plan
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investment menu, creating and managing default investment
options, and/or creating and managing risk-based model
portfolios for the plan.
It is important to note that, in our arrangements with plans under
the Summit Program, our agreement is with the plan and our
Client is the plan (not any individual participant with whom we
may interact). In these arrangements, we may provide fiduciary
advice to participants, but will not assume any discretionary or
other authority over a participant’s selection of any investment
option or product on the plan’s investment menu. In limited
circumstances, we may agree to provide individualized advisory
services to participants in a plan; in those cases, we may require
the participant to, among other things, complete and execute
agreements, certifications, or other documents.
OTHER INFORMATION ABOUT THE PROGRAMS
As discussed above, we enter into written Advisory Agreements
you acknowledging our Advisory relationship, disclosing our
obligations when acting in an Advisory capacity, and describing
the roles and responsibilities of each party.
Processing Guidelines for Advisory Accounts
New Account Processing
As set forth in our Advisory Agreements, our Advisory
relationship with you begins after we have accepted a fully
executed Advisory Agreement (referred to as the “effective date”
in the Advisory Agreements). In general, this occurs after (i)
your Financial Advisor has submitted all required account
opening documentation through the appropriate channels
(typically through our account opening systems); (ii) all required
internal approvals have been documented and submitted; (iii)
our processing personnel have confirmed that the account
documentation is in good form (for example, Client signatures
are generally required to be dated within 90 days of submission);
(iv) your account is funded with no less than the minimum
amount required for the particular Program in which you are
seeking to invest; and (v) the account has been coded as an
Advisory account in our recordkeeping systems.
Processing times may vary due to a number of factors, including
(but not limited to) the volume of new Advisory accounts being
processed, whether additional verification activities are needed,
etc. In general, you should note that the turnaround time for
processing new Advisory accounts or conversions between
Programs or Portfolios may require several business days to
complete, even under normal market conditions. Stifel is not
responsible for changes in market prices that occur between
the time you execute Advisory account documentation (or
otherwise authorize enrollment into a Program or Portfolio)
and the eventual investment of the account in the selected
strategy. Prior to enrolling into any Program, you should talk to
your Financial Advisor about the expected processing period for
that Program.
Processing Ongoing Account Maintenance Requests
Availability of Funds/Securities Added to Discretionary
Accounts for Trading – When you add funds or securities to
your discretionary accounts at Stifel, those funds and/or
securities are generally available for trading no earlier than the
next business day.
Processing Partial Liquidation/Withdrawal Requests in
Discretionary Accounts – To the extent possible, where your
Financial Advisor has trading discretion over your account, the
Financial Advisor will process liquidation requests promptly.
To the extent other Stifel internal teams and/or an Adviser
directs the investments in your account, liquidation instructions
are processed after our trading and/or processing staff receive
those instructions from your Financial Advisor. If your account
is traded by an Adviser, we will then relay those instructions to
the Adviser for implementation. You should note that, in
periods of unusually high volumes (which may occur, for
example, during highly volatile market conditions), we can take
more than one business day to implement these requests.
Additionally, if you are invested in a Portfolio that is traded by
an Adviser, you should also note that even after we relay a
request to an Adviser, the Adviser may take some time (such as
multiple days) to implement the request. You should refer to
each Manager’s Form ADV 2A for applicable disclosures. In
each case, please note that frequent withdrawals from your
account will affect your account’s performance. We reserve the
right to terminate any account that falls below the minimum
account value for the applicable Program due to partial
liquidations/withdrawal requests.
You should refer to the section “Terminations; Refund of Fees
Upon Terminations” below for a discussion of the processing
guidelines relating to account terminations from our Advisory
Programs.
Other Maintenance Requests – You may also experience delays
in connection with other on-going account maintenance requests.
During times of unusually high volumes of requests from
Clients, it can take multiple business days to process and
implement ongoing maintenance requests.
In each case, we recommend that you communicate your
maintenance requests to your Financial Advisor as early as
possible. You should note that, for certain securities (such as
mutual funds), we are not able to process trade instructions
received after 3:00 p.m. Eastern Standard Time.
Neither Stifel nor any Adviser is responsible for changes in
market prices that occur between the time you communicate an
account maintenance request for any discretionary account to
your Financial Advisor and the eventual implementation of
that request by Stifel and/or an Adviser.
MANAGEMENT AND ADVISORY SERVICES TO
PRIVATE FUNDS
Our firm also serves as investment adviser to private investment
funds (the “Private Funds”), each of which invests in underlying
private funds, including hedge funds and private equity funds
(“Underlying Funds) managed by unaffiliated investment
managers. Further information on the process for selecting the
Underlying Funds for these Private Funds can be found in the
“Portfolio Manager Selection and Evaluation” section of this
brochure.
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In each such case, the applicable Financial Advisor will consider
a Client’s eligibility to invest in the Private Funds based on a
review of the Client’s stated investment objectives, goals, and
limitations, and a comparison of the same to the Private Fund’s
stated objectives and other limitations. At a minimum, investors
in each Private Fund must be “accredited investors” within
meaning of the federal securities laws; provided, however, that
depending on the requirements of the Underlying Fund(s) in
which a particular Private Fund invests, we may require that
Clients seeking to invest in that Private Fund meet the “qualified
purchaser” standard of the federal securities laws. Interested
Clients should refer to the applicable Private Fund’s offering
documents for a discussion of the definition of these investor
standards.
Each Private Fund’s investment objectives are set forth in its
offering documents; a Client that invests in a Private Fund may
not impose restrictions on the investments to be made by such
Private Fund.
Please refer to the section “Fees and Compensation – Private
Fund Management Fee” below for a discussion of our
remuneration in connection with the Private Funds.