Kovack Advisors, Inc. (hereinafter “KAI”, “the firm”, “our firm”, “us”, or “we”) is a registered investment adviser based in Fort Lauderdale,
Florida. We are a corporation, organized under the laws of the State of Florida. KAI is wholly owned by Kovack Financial, LLC (“KFN”).
KAI was founded by Ronald Kovack, former Chairman. Brian Kovack, CEO of KFN and President of KAI, Melinda Wolfe, Executive Vice
President of KAI, and Cecilia Mercado, Chief Compliance Officer of KAI are responsible for the day-to-day management of KAI. We have
been registered as an investment adviser and have been providing investment advisory services since 2004.
You may see the term Associated Person throughout this Brochure. As used in this Brochure, this term refers to anyone from our firm
who is an officer, employee, and all individuals providing investment advice on behalf of our firm. Where required, such persons are
properly registered as Investment Adviser Representatives (“IARs”).
Currently, we offer the following investment advisory services, personalized to each individual Client:
• Asset Management Services
• Recommendation of Third-Party Asset Managers
• Financial Planning Services
KAI does not specialize in a particular type of advisory service and does not provide investment advice limited to specific types of
investments.
ASSET MANAGEMENT SERVICES
Our firm offers continuous discretionary and non-discretionary asset management services. Discretionary asset management means we
will make investment decisions and place buy or sell orders in your account without contacting you for prior approval for each
transaction. These decisions are made based on your stated investment objectives. We will monitor your portfolio’s performance on a
continuous basis, and rebalance the portfolio whenever necessary, as changes occur in market conditions, your financial circumstances,
or both.
You may impose reasonable written restrictions on investing in certain securities, types of securities, or industry sectors. Non- Non-
discretionary asset management service means that we must obtain your approval prior to making any transactions in your account. Our
investment advice is tailored to meet your needs and investment objectives. If you decide to hire our firm to manage your portfolio, we
will meet with you to gather your financial information, determine your goals, and help you determine how much risk you should take in
your investments. The information we gather will help us implement an asset allocation strategy that will be specific to your goals,
whether we are actively investing for you or simply providing you with advice.
WRAP FEE PROGRAMS
A “wrap fee program” is an advisory program under which a specified fee or fees not based directly upon transactions in a Client account
is charged for investment advisory services (which may include asset management or advice concerning the selection of other
investment advisers) and the execution of Client transactions. KAI is not the portfolio manager and/or sponsor of a wrap fee program.
However, in certain circumstances, your KAI IAR may negotiate with you to pay certain transaction costs as part of the overall advisory
fee. In such cases, this presents a conflict of interest since your KAI IAR may have an incentive to trade your account less frequently to
avoid incurring the transaction costs or to use a broker-dealer or custodian that charges lower transaction charges, although a more
favorable transaction might be available through another broker-dealer or custodian. As described in the Item 13 Account Reviews
section below, KAI conducts periodic supervisory reviews of advisory accounts for consistency with its fiduciary duties and best execution
obligations.
In recognition of the additional costs and expenses your KAI IAR may incur on your behalf, you may pay a higher Negotiated Annual
advisory fee. This fee may be higher than fees that could be obtained from other Investment advisers. Clients with less actively traded
accounts may, therefore, benefit from paying the fees, costs, and expenses themselves and paying a lower overall Negotiated Annual
advisory fee. All fees and costs, including transaction fees, administrative fees and the like will reduce your overall return on your
investment.
You should carefully review all disclosures and account forms provided by KAI, any recommended brokers, dealers, custodians, and/or
recommended Third-Party Asset Managers to fully understand the total fees you will pay in order to understand and evaluate the overall
total cost if you elect to have your IAR cover certain transaction costs.
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RECOMMENDATION OF THIRD-PARTY ASSET MANAGERS
As part of our overall asset management strategy, we may also recommend Third-Party Asset Manager programs, or we may select
separately managed account platforms or other advisers and/or custodians to manage all or a portion of your account. All Third-Party
Asset Managers recommended by our firm must either be registered as investment advisers or exempt from registration requirements.
Factors that we consider when making our recommendations include, but are not limited to, the following: the Third-Party Asset
Manager’s performance, methods of analysis, fees, your financial needs, investment goals, risk tolerance, and investment objectives. We
will periodically monitor the Third-Party Asset Manager’s performance to ensure its management and investment style remain aligned
with your investment goals and objectives.
Where Client appoints KAI as Client’s agent to buy and sell securities or other investments for Client's account on a discretionary basis,
Client delegates to KAI the
authority to retain one or more Third-Party Asset Manager(s) to provide all, or a portion, of the discretionary
management services with respect to Client’s account. KAI shall have the discretion to hire and fire any Third-Party Asset Manager
without Client consent. To the extent, that Client participates in a specific program offered by KAI that is provided through a Third-Party
Asset Manager or platform, the investments that are available to Client through that program may be limited to certain types of securities.
Client understands that Client may not be able to impose investment restrictions with respect to the securities and other assets that are
purchased for, or held in, the account by such Third-Party Asset Managers.
In some cases, you may be required to sign an agreement directly with the Third-Party Asset Manager(s) and/or account
program/platform providers. In which case, you may terminate your advisory relationship with the Third-Party Asset Manager(s)
according to the terms of your agreement with the Third-Party Asset Manager(s) and/or other program/platform providers. You should
review each Third-Party Asset Manager’s brochure for specific information on how you may terminate your advisory relationship with the
Third-Party Asset Manager and how you may receive a refund, if applicable. You should contact the Third-Party Asset Manager directly
for questions regarding your agreement with the Third-Party Asset Manager.
A complete description of the programs and services provided, the amount of total fees, the payment structure, termination provisions,
and other aspects of each program are detailed and disclosed in i) the Third-Party Asset Manager’s Form ADV Part 2A; ii)) or other
applicable disclosure documents; iii) the disclosure documents of the portfolio manager(s) selected; or, iv) the Third-Party Asset
Manager’s account opening documents. A copy of all relevant disclosure documents of the Third-Party Asset Manager and the individual
portfolio manager(s) will be provided to anyone interested in these programs/managers.
MANAGEMENT OF HELD-AWAY ASSETS
KAI offers asset allocation review, rebalancing, and management services for accounts that are not held in the custody of the qualified
custodian(s) recommended by our firm. These services are provided through an account aggregation service called Pontera Inc.
(“Pontera”). This service primarily applies to ERISA and non-ERISA plan assets such as 401(k)s and 403(b)s, and other assets that must
be held in custody of the plan custodian(s). We regularly review the available investment options in these accounts, monitor them, and
periodically rebalance and implement our strategies using different tools as necessary. If you elect to allow our firm to manage your assets
through Pontera, you will be notified via email when KAI places trades through Pontera. Services and fees will be clearly set forth in the
advisory agreement between you and KAI.
FINANCIAL PLANNING SERVICES
We offer various financial planning-related services, which assist our Clients in the management of their financial resources. Financial
planning services are based upon an analysis of your individual needs and begin with one or more information gathering consultations.
Once we collect and analyze all documentation gathered during these consultations, KAI will provide one or more of the following
services based on the information furnished by Client:
• A review of Client’s present financial position, including the following as appropriate: net worth statement, budget/cash flow analysis,
risk assessment, and income tax assessment.
• A review of Client’s financial goals, objectives, risk tolerance, and expectations.
• A written evaluation and analysis of the information Client provided and recommendations for Client’s personalized financial plan,
based on the specific needs to be covered as selected by the Client in the financial planning agreement. Only the needs selected by
the Client will be covered in the written evaluation and recommendations. For example, the Client may select from one or more
areas of concern, such as the following or the Client may work with KAI to customize a plan based on specific special needs as
agreed upon and set forth in the financial planning agreement between the Client and KAI:
• General Planning, such as Educational Needs, Retirement Needs, and Estate Planning Needs
• Risk Management Planning, such as Survivor Income Needs, Disability Income Needs, and Long-Term Care Needs
• Special Planning, such as Business Planning Needs, Charitable Planning Needs, and Special Family Needs
You can also request financial planning services that cover a specific area, such as asset allocation analysis, manager due diligence,
401(k) platform due diligence, or advice on assets in accounts not opened through KAI (“outside accounts”).
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The recommendations and solutions are designed to achieve your desired goals, subject to periodic evaluation of the financial plan,
which may require revision to meet changing circumstances. Financial plans are based on your financial situation based on the
information provided to our firm. We should be notified promptly of any change to your financial situation, goals, objectives, or needs.
You may choose to accept or reject our recommendations. If you decide to proceed with our recommendations, you may do so either
through our investment advisory services or by using any advisory, brokerage, or insurance provider you choose.
ASSETS UNDER MANAGEMENT
As of December 31, 2023, KAI managed $3,523,015,567 in Client assets on a discretionary basis and $764,807,214 on a non-
discretionary basis.