LPL Financial LLC

LPL ACCESS PORTFOLIOS PROGRAM PROGRAM BROCHURE LPL Financial LLC 1055 LPL Way, Fort Mill, SC 29715 www.lpl.com (704) 733-3482 March 31, 2026 the contents of this brochure, please contact your LPL This program brochure provides information about the qualifications and business practices of LPL Financial (“LPL”). If you have any questions about financial advisor or LPL at lplfinancial.adv@lplfinancial.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (“SEC”) or by any state securities authority. Additional information about LPL also is available on the SEC’s website at https://adviserinfo.sec.gov/. ITEM 1 COVER PAGE ITEM 2 MATERIAL CHANGES The following is a summary of certain changes made to this Brochure from the time of the most recent annual update dated March 31, 2025. Item 7 was updated to expand the availability of this program to charitable organizations, corporations, other business entities, and pension and profit sharing plans, including plans subject to ERISA. ITEM 3 TABLE OF CONTENTS ITEM 1 COVER PAGE ...................................................................................................................................................... 1 ITEM 2 MATERIAL CHANGES ......................................................................................................................................... 1 ITEM 3 TABLE OF CONTENTS ........................................................................................................................................ 1 ITEM 4 ADVISORY BUSINESS .......................................................................................................................................... 1 ITEM 5 FEES AND COMPENSATION .............................................................................................................................. 3 ITEM 6 PERFORMANCE BASED FEES AND SIDE-BY-SIDE MANAGEMENT ................................................................... 5 ITEM 7 TYPES OF CLIENTS ............................................................................................................................................. 5 ITEM 8 METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS ....................................................... 6 ITEM 9 ADDITIONAL INFORMATION ............................................................................................................................. 9 ITEM 10 OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS ...................................................................... 11 ITEM 11 CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING .. 13 ITEM 12 BROKERAGE PRACTICES .................................................................................................................................. 15 ITEM 13 REVIEW OF ACCOUNTS ................................................................................................................................... 15 ITEM 14 CLIENT REFERRALS AND OTHER COMPENSATION ........................................................................................ 15 ITEM 15 CUSTODY.......................................................................................................................................................... 20 ITEM 16 INVESTMENT DISCRETION ............................................................................................................................... 21 ITEM 17 VOTING CLIENT SECURITIES ............................................................................................................................ 21 ITEM 18 FINANCIAL INFORMATION .............................................................................................................................. 21 ITEM 4 ADVISORY BUSINESS Services LPL Financial LLC (“LPL”) is an investment adviser registered with the SEC pursuant to the Investment Advisers Act of 1940 (the “Advisers Act”). LPL has provided advisory services as a registered investment adviser since 1975. Note that registration as an investment adviser with the SEC does not imply a certain level of skill or training. As of December 31, 2025, LPL managed A 1 6 – 0 3 2 6 P a g e 1 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE approximately $818,320,000,000 of client assets on a discretionary basis and approximately $797,900,000 of client assets on a non-discretionary basis. LPL is owned 100% by LPL Holdings, Inc., which is owned 100% by LPL Financial Holdings Inc., a publicly held company. LPL’s advisory services are made available to clients primarily through individuals associated with LPL as investment adviser representatives (“IARs”). For more information about the IAR providing advisory services, client should refer to the Brochure Supplement for the IAR. The Brochure Supplement is a separate document that is provided by the IAR along with this Brochure before or at the time client engages the IAR. If client did not receive a Brochure Supplement for the IAR, the client should contact the IAR or LPL at lplfinancial.adv@lpl.com. IARs are required by applicable rules and policies to obtain licenses and complete certain training in order to recommend certain investment products and services. You should be aware that your IAR, depending on the licenses or training obtained, may or may not be able to recommend certain investments, models, programs or services. In addition, your IAR may be located at a financial institution that does not offer certain products, investments, models, programs or services. Please ask your IAR whether any limitations apply. LPL conducts its advisory business under the name “LPL Financial LLC,” as indicated in Form ADV and its communications and investment advisory agreements with clients. Although LPL and certain LPL IARs use separate marketing names or “doing- business-as” (DBA) designations, LPL does not conduct any advisory business primarily through any of those entities. Types of Advisory Services LPL offers various types of advisory services and programs, including wrap fee programs, mutual fund asset allocation programs, an advisor-enhanced digital advice program, advisory programs offered by third party investment advisor firms, financial planning services, and retirement plan consulting services. This Brochure provides a description of the advisory services offered under the LPL Access Portfolios program (the “Program”). For more information about LPL’s advisory services and programs other than LPL Access Portfolios, please contact your LPL investment adviser representative (“IAR”) for a copy of a similar brochure that describes such service or program or go to https://adviserinfo.sec.gov/. LPL is also a broker-dealer registered with the Financial Industry Regulatory Authority (“FINRA”), and an IAR also may be registered with LPL as a broker-dealer registered representative. Therefore, an IAR may be able to offer a client both investment advisory and brokerage services. Before engaging with an IAR, clients should take time to consider the differences between an advisory relationship and a brokerage relationship to determine which type of service best serves the client’s investment needs and goals. All recommendations regarding advisory accounts will be in an advisory capacity, and any recommendations regarding any brokerage account a client opens with LPL will be in a brokerage capacity, unless a client is expressly told otherwise. Clients should speak to the IAR to understand the different types of services available through LPL. Not all LPL IARs have access to all products and services. In the Program, LPL, through its IARs, provides ongoing discretionary investment advice and management on assets in the client’s account. IARs provide advice on the purchase and sale of various types of investments, such as no-load and load-waived mutual funds, unit investment trusts (“UITs”), closed-end funds, exchange-traded funds (“ETFs”), equities, fixed income securities and certificates of deposit. IARs provide advice that is tailored to the individual needs of the client based on the investment objective chosen by the client. Clients may impose restrictions on investing in certain securities or groups of securities by contacting their IAR and providing the necessary written instructions. Under a client’s agreement with one or more custodians (each, a “Custodian”), a client instructs Custodian to maintain custody of Program client funds and securities in a separate brokerage account for clients under such client’s name, trade in securities, and execute other transactions upon our instruction. The IAR obtains the necessary financial data from the client and assists the client in setting an appropriate investment objective for the account. The IAR obtains this information by having the client complete a Client Profile which is a part of the Advisory Agreement. In quarterly communications, LPL asks clients to contact the IAR if there have been any changes in the client’s financial situation or investment objectives or if they wish to impose any reasonable restrictions on the management of the account or reasonably modify existing restrictions. Clients should be aware that the investment objective selected for the Program is an overall objective for the entire account in respect of the Program and may be inconsistent with a particular A 1 6 – 0 3 2 6 P a g e 2 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE holding and the account’s performance at any time. Clients should further be aware that achievement of the stated investment objective is a long-term goal for the account in connection with the Program. IARs may, in their sole discretion and as agreed from time to time with clients, provide financial planning or financial consulting services to clients in connection with the Program at no additional cost. IARs may also require clients to enter into a separate agreement with an agreed upon fee for financial planning or financial consulting services. The scope and duration of financial planning and consulting services varies, will generally be agreed upon at the time the IAR provides the services, and may include comprehensive financial planning or consulting on a particular issue such as retirement planning, education planning, estate planning, cash flow/budget planning, risk management planning, personal wealth planning, tax planning, business planning, investment planning/asset allocation, or other planning as needed. Financial planning and consulting may or may not include a written, customized financial plan. ITEM 5 FEES AND COMPENSATION Fee Schedule Clients in the Program pay LPL an annualized advisory fee (“Advisory Fee”) for the advisory services of LPL and IAR, as well as the administrative services of LPL. The Advisory Fee is negotiable between the client and the IAR and is typically a straight percentage based on the value of all assets in the account, including cash holdings, and payable quarterly in advance. The maximum Advisory Fee is 2.50%. Upon request, the Advisory Fee may be structured on a tiered basis, with a reduced percentage rate based on reaching certain thresholds in the account. LPL reserves the right to increase the upper limit of the Advisory Fee upon 30 days’ prior notice to clients. LPL and IARs do not charge performance-based fees to accounts in the Program. LPL retains up to 0.05% of the Advisory Fee, which is not shared with your IAR, for its administrative services. LPL shares up to 100% (typically between 90% and 100%) of the remaining portion of the Advisory Fee with the IAR based on the agreement between LPL and the IAR. A portion of the Advisory Fee to the IAR may also be paid by the IAR to his or her LPL branch manager, another LPL representative for supervision or administrative support. There is a conflict of interest when a branch manager receives a portion of the Advisory Fee for supervision because the fee affects his or ability to provide objective supervision of the IAR. LPL may waive any fee it charges to client or IAR in its sole discretion in whole or in part. In the Program, clients will also pay Custodian fees for its custodian, brokerage, trading and execution services. The Advisory Fee, other related fees and charges associated with the Program account, and fees for brokerage and execution services will appear on account statements prepared by Custodian. How the Advisory Fee is Charged Under a client’s agreement with Custodian, a client authorizes LPL and instructs Custodian to permit LPL to charge the Advisory Fee and other related fees and charges associated with the Program account from the account or another account registered to the client’s name. Payment in Advance and Refund of Pre-Paid Fees LPL deducts the Advisory Fee quarterly in advance. If the Advisory Agreement is terminated before the end of the quarterly period, LPL will pay the client a prorated refund of any pre-paid quarterly Advisory Fee based on the number of days remaining in the quarter after the termination date. Fees Charged by Third Parties There are other fees and charges that are imposed by third parties other than LPL that apply to investments in Program accounts. Some of these fees and charges are described below. If a client’s assets are invested in mutual funds, ETFs or other pooled investment products, clients should be aware that there will be two layers of advisory fees and expenses for those assets. As a shareholder of a fund, Client will pay an advisory fee to the fund manager and other expenses charged by the fund. In the case of mutual funds that are funds of funds, there could be an additional layer of fees, including performance fees that vary depending on the performance of the fund. Client will also pay LPL and IAR the Advisory Fee with respect to assets A 1 6 – 0 3 2 6 P a g e 3 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE invested in mutual funds, ETFs and other pooled products. The mutual funds, ETFs and other pooled funds available in the Program can be purchased directly outside of the Program. Therefore, clients could generally avoid an additional layer of fees by not using the advisory services of LPL and IAR and by making their own decisions regarding the investment. Clients should understand that in many cases the mutual funds and mutual fund share classes offered through the Program charge higher fees and expenses than those that are not offered through the Program, and such other mutual funds and share classes may be equally or more appropriate for a client’s account. Other financial services firms, including those LPL makes available through its third-party asset management programs, may offer the same mutual funds that are offered through the Program but at lower overall costs to investors than the costs that clients incur by investing through the Program. Clients should also understand that in many cases the share class offered for a particular mutual fund available through the Program (the “Program Share Class”) charges higher fees and expenses than other share classes that are offered by the same fund but are not available through the Program. Program Share classes are selected by LPL in certain cases for consistency with other LPL’s custodied advisory programs. The Program Share Class pays LPL compensation for the administrative and recordkeeping services LPL provides to the mutual fund in those other advisory programs. Other financial services firms may offer the same mutual fund at a lower overall cost to the investor than is available through the Program. If the account is invested in a mutual fund that charges a fee if a redemption is made within a specific time period after the investment under a fund’s frequent trading policy, client will be charged a redemption fee. If a mutual fund has a frequent trading policy, the policy can limit a client’s transactions in shares of the fund (e.g., for rebalancing, liquidations, deposits or tax harvesting). If client holds a UIT in an account, UIT sponsors charge creation and development fees or similar fees. Further information regarding fees assessed by a mutual fund or UIT is available in the appropriate prospectus or offering document, which is available upon request from the IAR or from the product sponsor directly. Important Information When Funding an Account Ineligible Securities. When transferring securities into the Program account, client should be aware that certain securities may not be eligible for the account. In such case, the securities may be rejected, sold after the transfer, or moved to a brokerage account. Note that when an ineligible security is transferred into an account and subsequently sold or moved to a brokerage account, the advisory fee will be charged on such asset for the period of time the security was held in the account. Surrender Charges or CDSCs. If client transfers a previously purchased investment into the Program account , or liquidates the previously purchased investment and transfers the proceeds into an account, client may be charged a fee (sometimes called a “surrender charge,” “contingent deferred sales charge” or “CDSC”) upon the sale or redemption in accordance with the investment product’s prospectus. In many cases, the CDSC is only charged if a client does not hold the security for a minimum period of time. In particular, if a client transfers a previously purchased mutual fund (such as a Class C share) into an account that is subject to a CDSC, then the client will pay that charge when the mutual fund is sold. Previously Paid Commissions. Clients should be aware that securities transferred into an account may have been subject to a commission or sales load when the security was originally purchased. Client should understand that, after the transfer into an account, an advisory fee will be charged based on the total assets in the account, including the transferred security. In other words, if you paid IAR or another financial professional recently an upfront commission on the previously purchased security, you will be paying a new ongoing advisory fee going forward to IAR for advice on that same security. Loss of Benefits. If client will be funding the account with the proceeds of a sale or liquidation of an annuity, client should understand that client may be giving up guaranteed living or death benefits that were provided through the annuity, and will not be provided through the Program account. When transferring securities into an account, client should consider and speak to IAR about whether: a CDSC will apply, and the length of time before the CDSC expires; there will be a loss of a guaranteed benefit, in the case of an annuity; a commission was previously paid on the security; • • • A 1 6 – 0 3 2 6 P a g e 4 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE client wishes for the security to be managed as part of the account and be subject to an advisory fee; or client wishes to hold the security in a brokerage account that is not managed and not subject to an advisory fee. • • Understanding Share Classes and Transaction Charges LPL makes available for purchase only one share class per mutual fund in the Program, which can be titled, for example, as “Class I,” “institutional,” “investor,” “retail,” “service,” “administrative” or “platform” share classes (“Program Shares”). Program Shares are no-load or load-waived share classes and therefore not subject to any upfront sales charge. A client may transfer other share classes into an account (“Non-Program Share Classes”). Client understands that if a Non-Program Share Class is held in the Account, that share class may be more expensive than the Program Shares. Clients should understand that the Program Share class offered for a particular mutual fund through the Program in many cases will not be the least expensive share class that the mutual fund makes available. Program Share Classes are selected by LPL in certain cases for consistency with other LPL’s custodied advisory programs. The Program Share Class pays LPL compensation for the administrative and recordkeeping services LPL provides to the mutual fund in those other advisory programs. Other financial services firms may offer the same mutual fund at a lower overall cost to the investor than is available through the Program. Clients should also understand that Custodian charges clients a transaction charge for purchases and sales of securities. The applicable transaction charge varies based on the type of transaction (e.g., mutual fund, equity, ETF or fixed income security). As with any fee, transaction charges reduce the overall amount of your investment portfolio. Important Things to Consider About Fees • The Advisory Fee is an ongoing fee for investment advisory services. Factors that bear upon the cost of the account in type and size of the account relation to the cost of the same services purchased separately include the: • • historical and or expected size or number of trades for the account; and • number and range of supplementary advisory and client-related services provided to the client. • The Advisory Fee may be higher than the fees charged by other investment advisors for similar services. This is the case in particular if the Advisory Fee is at or near the maximum Advisory Fee set out above. The IAR is responsible for determining the Advisory Fee to charge each client based on factors such as total amount of assets involved in the relationship, type of securities to be held in the account (e.g., mutual funds vs. individual securities), the complexity and mix of the portfolio, and the number and range of supplementary advisory and client-related services to be provided to the account. The IAR may charge a client more or less than another client. Clients should consider the level and complexity of the advisory services to be provided when negotiating the Advisory Fee with IAR. • The investment products available to be purchased in the Program can be purchased by clients outside of the Program account, through broker-dealers or other investment firms not affiliated LPL. • Clients should consider the impact of fees and expenses on their investment portfolio, as described in the informational brochure titled “How Fees and Expenses Affect Your Portfolio” on lpl.com/disclosures.html under “Investor Regulatory & Educational Resources.” ITEM 6 PERFORMANCE BASED FEES AND SIDE-BY-SIDE MANAGEMENT This Item is not applicable. LPL and its IARs do not accept performance-based fees. ITEM 7 TYPES OF CLIENTS The Program is available for individuals (individually or jointly with another person), trusts, traditional individual retirement accounts (“IRAs”), Roth IRAs, charitable organizations, corporations, other business entities, and pension and profit sharing plans, including plans subject to the Employee Retirement Income Security Act of 1974, as amended (‘ERISA”). A minimum account value of $10,000 is generally required for the Program. In certain instances, LPL will permit a lower minimum account size. A 1 6 – 0 3 2 6 P a g e 5 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE ITEM 8 METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS Each IAR managing the Program account chooses his/her own research methods, investment strategy and management philosophy. It is important to note that no methodology or investment strategy is guaranteed to be successful or profitable. The IAR has access to various research reports, including those provided by LPL’s Research Department, to which he/she may refer in determining which securities to purchase or sell. LPL’s Research Department makes available recommendations regarding asset allocation, mutual funds, and model portfolios. IARs may or may not follow these recommendations in managing Program accounts. LPL Research also constructs asset allocation model portfolios and provides recommendations on the funds to populate the model portfolios. In constructing these models, LPL Research uses the following investment strategies: Diversified and Alternative Strategy. Although these descriptions are written in terms of individual equities and/or bonds, they include mutual funds or ETFs whose portfolios consist of the type of equities or bonds referenced. • Diversified. The Diversified investment strategy seeks to promote capital appreciation while taking a reasonable amount of risk to achieve that goal. The strategy is subject to minimal constraints, which allows for a relatively pure implementation of LPL Research’s recommendations. In general, Diversified portfolios should be considered by investors seeking investments in primarily stocks and bonds, along with the occasional non-traditional asset class to take advantage of potential market opportunities. Diversified portfolios will hold primarily traditional asset classes. Secondarily, if a non-traditional asset class represents the investment that provides the best means of taking advantage of a market opportunity, it will be included in the recommendation. The non-traditional investments included in Diversified portfolios are more standard, such as conservative balanced strategies. Diversified portfolios tend to be steady in their number of positions. These portfolios tend to remain consistently diversified. • Alternative Strategy. The Alternative Strategy investment strategy seeks to promote capital appreciation while taking a reasonable amount of risk to achieve that goal. Unlike the Diversified investment strategy which may have an allocation to alternative strategy or non-traditional assets classes, this portfolio typically has an allocation to non-traditional asset classes. This strategy extends the diversification beyond the core style box asset classes into strategies with lower correlation to stocks and bonds in order to lower risk, as defined by standard deviation and maximum drawdown (peak to trough loss), while attempting to maintain long-term performance similar to other portfolios in the same investment objective. For each of the above investment strategies, LPL Research recommends a strategic or tactical version. • Strategic. Strategic portfolios typically have a three- to five-year time horizon. The allocations within these portfolios are intended to help take advantage of market opportunities LPL Research believes will occur or persist throughout that time frame. Although LPL Research recommends investments through a three- to five-year lens, LPL Research may recommend that these portfolios be traded for fine tuning throughout the year. For clients who take a longer term view or are more tax sensitive, a strategic implementation may be more appropriate. • Tactical. Tactical portfolios are more flexible and are designed to help take advantage of short-, mid-, and long-term opportunities the markets present. LPL Research recommends that these portfolios invest in opportunities for as short as one week and as long as five years. Due to the tactical nature, the trading is notably more frequent than strategic portfolios. Tactically managed portfolios should be considered by clients who wish to take advantage of shorter-term market opportunities that may arise and are not opposed to the prospect of more frequent trading. It is important to note that although LPL Research makes available its recommendations and investment strategies, an IAR will not necessarily take into consideration these recommendations and strategies. Clients should contact the IAR managing his/her accounts for additional information on the IAR’s particular investment strategy. It is also important to note that an IAR may use a combination of investment strategies. Types of Investments and Risks In the Program, IARs can recommend many different types of securities, including mutual funds, unit investment trusts (“UITs”), closed end funds, ETFs, equities, fixed income securities and certificates of deposit. LPL determines the types of investments that A 1 6 – 0 3 2 6 P a g e 6 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE are eligible to be purchased in Program accounts. Investing in securities involves the risk of loss that clients should be prepared to bear. Described below are some risks associated with investing and with some types of investments that are available in the Program. • Market Risk. This is the risk that the value of securities owned by an investor may go up or down, sometimes rapidly or • unpredictably, due to factors affecting securities markets generally or particular industries. Interest Rate Risk. This is the risk that fixed income securities will decline in value because of an increase in interest rates; a bond or a fixed income fund with a longer duration will be more sensitive to changes in interest rates than a bond or bond fund with a shorter duration. • Economic Conditions Risk. This is the risk that economic, political, or financial developments will, from time to time, result in periods of volatility or other adverse effects that could negatively impact your account. • Credit Risk. This is the risk that an investor could lose money if the issuer or guarantor of a fixed income security is unable or unwilling to meet its financial obligations. Specific Risk. This is the risk that the value of an individual security or particular type of security can be more volatile • ‐ • • Liquidity Risk. This is the risk that an investor would not be able to sell or redeem an investment quickly, or would not be able to sell or redeem an investment quickly without significantly affecting the price. Liquidity risk is heightened when markets are distressed. Issuer than the market as a whole and can perform differently from the value of the market as a whole. Investment Company Risk. To the extent a client account invests in ETFs or other investment companies, its performance will be affected by the performance of those other investment companies. Investments in ETFs and other investment companies are subject to the risks of the investment companies’ investments, as well as to the investment companies’ expenses. If a client account invests in other investment companies, the client account may receive distributions of taxable gains from portfolio transactions by that investment company and may recognize taxable gains from transactions in shares of that investment company, which would be taxable when distributed. • Concentration Risk. To the extent a client account concentrates its investments by investing a significant portion of its assets in the securities of a single issuer, industry, sector, country or region, the overall adverse impact on the client of adverse developments in the business of such issuer, such industry or such government could be considerably greater than if they did not concentrate their investments to such an extent. • Sector Risk. To the extent a client account invests more heavily in particular sectors, industries, or sub ‐ ‐ ‐ ‐ sectors of the market, sectors. its performance will be especially sensitive to developments that significantly affect those sectors, industries, or sub An individual sector, industry, or sub sector of the market may be more volatile, and may perform differently, than the broader market. The several industries that constitute a sector may all react in the same way to economic, political or regulatory events. A client account’s performance could be affected if the sectors, industries, or sub sectors do not perform as expected. Alternatively, the lack of exposure to one or more sectors or industries may adversely affect performance. • Equity Securities. Common and preferred stock represents the equity ownership of a company. Stock markets are volatile and the price of equity securities fluctuates based on changes in a company’s financial condition and overall market and economic conditions. The value of equity securities may also decline due to factors that affect particular industries or particular issuers. The values of equity securities may be more volatile than those of other asset classes. • Debt Securities. Debt securities, such as bonds, involve interest rate risk, credit risk, extension risk, prepayment risk, and other types of risks. In addition, the value of debt securities may fluctuate in response to market movements or issues that affect particular industries or issuers. When interest rates fall, the issuers of debt securities may prepay principal more quickly than expected, and investors may have to reinvest the proceeds at a lower interest rate. This is known as “prepayment risk.” When interest rates rise, debt securities may be repaid more slowly than expected, and the value of the debt security can fall sharply. This is known as “extension risk.” Certain types of debt securities may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond for redemption before it matures and the investor may lose income. • Foreign Securities Risk. Foreign investments involve special risks not present in U.S. investments that increase an investor’s potential to lose money. Among other issues, custody of securities in foreign markets, changes in foreign currency exchange A 1 6 – 0 3 2 6 P a g e 7 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE rates, foreign economic and market conditions, actions adverse to investors taken by foreign governments, lack of governmental oversight or regulation of securities markets, underdeveloped settlement and clearing services, and foreign withholding taxes may negatively affect the value of investments in foreign securities. • Alternative Strategy Mutual Funds. Certain mutual funds available in the Program invest primarily in alternative investments and/or strategies. Investing in alternative investments and/or strategies may not be appropriate for all investors and involves special risks, such as risks associated with commodities, real estate, leverage, selling securities short, the use of derivatives, potential adverse market forces, regulatory changes and potential illiquidity. Clients should be aware that alternative investments and/or strategies are generally considered speculative in nature and involve a high degree of risk, particularly if concentrating investments. There are special risks associated with mutual funds that invest principally in real estate securities, such as sensitivity to changes in real estate values and interest rates and price volatility because of the fund’s concentration in the real estate industry. These types of funds tend to have higher expense ratios than more traditional mutual funds. They also tend to be newer and have less of a track record or performance history. • Closed-End Funds. Clients should be aware that closed-end funds available within the Program may not give investors the right to redeem their shares, and a secondary market may not exist. Therefore, clients may be unable to liquidate all or a portion of their shares in these types of funds. While the fund may from time to time offer to repurchase shares, it is not obligated to do so. In some cases, there may be an additional cost to investors who redeem before holding shares for a specified amount of time. The repurchase offer program may be suspended under certain circumstances. • Exchange-Traded Funds (“ETFs”). ETFs are typically investment companies that are legally classified as open-end mutual funds or UITs. However, they differ from traditional mutual funds, in particular, in that ETF shares are listed on a securities exchange. Shares can be bought and sold throughout the trading day like shares of other publicly-traded companies. ETF shares may trade at a discount or premium to their net asset value. This difference between the bid price and the ask price is often referred to as the “spread.” The spread varies over time based on the ETF’s trading volume and market liquidity, and is generally lower if the ETF has a lot of trading volume and market liquidity and higher if the ETF has little trading volume and market liquidity. Although many ETFs are registered as an investment company under the Investment Company Act of 1940 like traditional mutual funds, some ETFs, in particular those that invest in commodities, are not registered as an investment company. ETFs may be closed and liquidated at the discretion of the issuing company. • Unit Investment Trusts (UITs). UITs are investment companies that generally offer a fixed portfolio of stocks and bonds as redeemable units to investors for a specified period of time. Like a mutual fund, UITs typically issue redeemable units. However, UITs differ from mutual funds in that UITs have stated expiration dates and are not actively traded. As a consequence, UITs will not be sold to take advantage of market conditions and their value may fluctuate, sometimes rapidly or unpredictably, due to factors affecting securities markets or particular industries. Upon the stated expiration date of a UIT, there is no assurance that the value of the UIT will be equal to or higher than the original price. • Cybersecurity Risk. Failures or breaches of the electronic systems of LPL, its service providers, securities market participants or the issuers of securities can cause significant losses for investors. Unintentional cyber events, such as the inadvertent release of confidential information, could also adversely impact investor account. Any cyber event could cause result in the loss or theft of investor data or cause investors financial loss and expense. • Use of Artificial Intelligence and Machine Learning. Recent technological advances in artificial intelligence, generative artificial intelligence, and machine learning technology (collectively, “Machine Learning Technology”) may pose risks to LPL and its IARs. LPL and its IARs could be further exposed to the risks of Machine Learning Technology if third-party service providers or any counterparties, whether or not known to LPL or its IARs, also use Machine Learning Technology in their business activities. LPL and its IARs will not be in a position to control the operations of third-party service providers or counterparties, the manner in which third-party products are developed or maintained or the manner in which third-party services are provided. Machine Learning Technology is generally highly reliant on the collection and analysis of large amounts of data, and it is not possible or practicable to incorporate all relevant data into the model that Machine Learning Technology utilizes to operate. Certain data in such models will inevitably contain a degree of inaccuracy and error, potentially materially so, and could otherwise be inadequate or flawed, which would be likely to degrade the effectiveness of Machine Learning Technology. To the extent that LPL or its IARs are exposed to the risks of Machine Learning Technology, any such inaccuracies or errors could have adverse impacts on LPL or its IARs, as applicable. Machine Learning A 1 6 – 0 3 2 6 P a g e 8 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE Technology and its applications, including in the financial services sector, continue to develop rapidly, and it is impossible to predict the future risks that will from time to time arise from such developments. • Values-Based and Environmental, Social and Governance (ESG) Investing Risk. Values-based investing or ESG investing, also known as “socially responsible investing,” “sustainable investing,” or “impact investing,” focuses on the social values or environmental, social, and governance standards or the sustainability factors of an investment. Some values-based investing strategies focus on factors relating to an individual investor’s personal or religious values, such as “biblical investing,” while other strategies focus on issues like environmental impact. Some values-based investment strategies use values-based criteria to supplement financial analysis when considering a particular issuer or security, while others affirmatively select “socially responsible” investments or screen out or exclude investments in companies that engage in certain activities. Values-based investing may limit the type and number of investments available in a strategy and cause the strategy to underperform other strategies without a values-based focus or with a focus that involves a different type of focus or screening methodology. Values-based strategies may underperform the market as a whole. Companies and issuers selected in a values-based strategy may not or may not continue to demonstrate values-based characteristics. Different investors likely have different opinions about what types of investments are socially responsible. • Comparable Products. LPL offers various mutual funds, ETFs, and other investment products that have similar or identical investment strategies but different fee and expense arrangements. For example, LPL sells both mutual funds and ETFs that are designed to track an index of securities, such as the S&P 500 Index. A mutual fund and an ETF following an identical strategy have different fees and expenses that affect your investment return. Those fees and expenses include direct costs like sales loads, commissions, and other transaction costs, and indirect costs at the product level like advisory or management fees, distribution expenses (12b-1 fees), and other administrative, shareholder servicing and transfer agent fees. The impact of those fee and expenses on your investment returns also varies based on the size of your initial investment, the length of time you hold the investment, and other factors. The differences in fees and expenses, and additional differences in compensation paid directly by product sponsors like revenue sharing, mean that LPL and its IARs generally will earn more compensation for selling one investment product than another. As a result, LPL and its IARs have a conflict of interest because of the financial incentive to recommend investment products that pay more compensation if a less expensive comparable product could be used to achieve a customer’s investment objective. ITEM 9 ADDITIONAL INFORMATION Disciplinary Information LPL entered into a settlement with the SEC in which the SEC found that LPL willfully violated its obligations under Section 17(a) of the Exchange Act and Rule 17a-8 thereunder, which require broker-dealers to comply with certain anti-money laundering (“AML”) requirements. The SEC found that LPL did not follow its AML policies for its customer identification program and ongoing customer due diligence obligations by, among other things, not properly verifying new accounts; not timely closing accounts that did not pass its screening measures; and not closing or restricting certain accounts that were prohibited under LPL’s AML Policies. The SEC censured LPL and ordered LPL to cease and desist from committing or causing any violations and any future violations of such section and rule, to pay a civil monetary penalty in the amount of $18 million, and to comply with certain undertakings (2025). LPL entered into a settlement with the SEC in which the SEC found that LPL willfully violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder in connection with the maintenance and preservation of off-channel communications; and failed to reasonably supervise its personnel within the meaning of Section 15(b)(4)(E) of the Exchange Act and Section 203(e)(6) of the Advisers Act. LPL admitted to the facts in the settlement order and acknowledged its conduct violated the federal securities laws. The SEC ordered LPL to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder, censured it for its conduct, ordered it to pay a civil monetary penalty in the amount of $50,000,000, and ordered it to comply with certain undertakings (2024). LPL entered into a settlement with the SEC in connection with LPL’s failure to comply with its Customer Identification Program procedures. The SEC found that LPL willfully violated Section 17(a) of the Exchange Act and Rule 17a-8 thereunder and was a cause of a third party’s violations of Sections 17(a)(2) and (3) of the Securities Act and Section 206(2) of the Advisers Act. The SEC A 1 6 – 0 3 2 6 P a g e 9 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE ordered LPL to cease and desist from committing or causing any further violations of these laws and regulations, censured LPL for its conduct, and ordered the payment of disgorgement and prejudgment interest totaling $141,202 (deemed satisfied based on LPL’s voluntary remedial payment of $4,118,876 to the impacted client), and the payment of a civil money penalty of $750,000 (2021). As part of a voluntary self-reporting initiative in 2019, LPL entered into a settlement with the SEC in which the SEC found that LPL willfully violated Section 206(2) and 207 of the Investment Advisers Act of 1940 (the “Advisers Act”) in connection with inadequate disclosure to clients of its and its associated persons’ conflicts of interest related to its receipt of 12b-1 fees and/or its selection of mutual fund share classes that pay such fees. The SEC ordered LPL to cease and desist from committing or causing any violations of Sections 206(2) and 207 of the Advisers Act, censured it for its conduct, and ordered the payment of disgorgement and prejudgment interest to affected investors totaling $9,333,516 (2019). LPL, as a broker-dealer, is a member of FINRA and has found to be in violation of FINRA’s rules related to its brokerage activities. In particular, LPL consented to sanctions related to the following matters: • • • • • • • • LPL entered into a settlement with the SEC in which the SEC found that LPL willfully violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder in connection with the maintenance and preservation of off-channel communications; and failed to reasonably supervise its personnel within the meaning of Section 15(b)(4)(E) of the Exchange Act and Section 203(e)(6) of the Advisers Act. LPL admitted to the facts in the settlement order and acknowledged its conduct violated the federal securities laws. The SEC ordered LPL to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder, censured it for its conduct, ordered it to pay a civil monetary penalty in the amount of $50,000,000, and ordered it to comply with certain undertakings (2024). LPL’s supervisory systems and maintenance of books and records relating to brokerage direct business transactions, supervisory systems and misstatements about fees relating to brokerage product switch transactions, and supervisory systems relating to brokerage recommendations of publicly traded securities of business development companies (BDCs) to customers, resulting in a censure, a fine of $5.5 million, restitution to impacted customers, and an undertaking to certify that LPL has remediated the systems and procedures for making recommendations of BDCs (2023). LPL’s supervisory systems and procedures relating to the transmittal of customer funds by wire or check to third parties and maintenance of related books and records, resulting in a censure, a fine of $3,000,000, restitution to impacted clients, and an undertaking to identify and pay restitution to affected customers for certain other improper transfers (2023). LPL’s failure to accurately calculate its customer reserve requirement, failure to maintain a sufficient customer reserve, failure to maintain policies and procedures reasonably designed to achieve compliance with the Securities and Exchange Act and FINRA rules, and failure to maintain accurate books and records, resulting in a censure and a fine of $300,000 (2022). LPL’s self-reporting of potential issues related to certain C-share purchase suitability reviews and its supervisory systems and procedures relating to waivers of front-end sales charges for rollovers of 529 savings plan investments from one state plan to another, resulting in a censure and payment of restitution to impacted customers (2021). LPL’s supervisory systems and procedures relating to record retention, fingerprinting and screening of certain associated persons, and supervision of consolidated reports, resulting in a censure, a fine of $6,500,000 and an undertaking to review and enhance related policies, systems and procedures (2020). LPL’s supervisory systems and procedures relating to changes in the authority of custodians of accounts established under the Uniform Gifts to Minors Act and/or the Uniform Transfers to Minors Act, resulting in a censure, a fine of $300,000, and an undertaking to review and enhance its policies, systems, and procedures related to supervision of such accounts (2019). • The effectiveness of LPL’s anti-money laundering program, LPL’s failure to amend certain Forms U4 and U5, and LPL’s systems and supervisory procedures relating to Forms U4 and U5 reporting requirements, resulting in a censure and a fine of $2,750,000 and an undertaking to review the process used to disclose customer complaints on Forms U4 and U5 (2018). LPL’s brokerage supervisory and disclosure procedures related to the sale of certain brokered certificates of deposit in brokerage accounts, resulting in a censure and a fine of $375,000 (2018). A 1 6 – 0 3 2 6 P a g e 1 0 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE • • LPL’s systems and supervisory procedures relating to the creation and distribution of certain required account notices, resulting in a censure, a fine of $900,000, and an undertaking to review affected processes (2016). LPL’s systems and supervisory procedures relating to the format in which certain electronic records were retained, resulting in a censure and a fine of $750,000 (2016). LPL, as a broker-dealer, is regulated by each of the 50 states and has been the subject of orders related to the violation of state laws and regulations in connection with its brokerage activities. In particular, LPL entered into consent orders related to the following matters: • • • • • • LPL’s supervision of electronic signature practices at an LPL branch office in Massachusetts, resulting in a fine of $250,000 and an undertaking to conduct an internal review of certain related policies and procedures (Massachusetts or “MA”, 2023). LPL’s supervision of an LPL broker-dealer/investment adviser agent’s sales of structured products, resulting in a censure, an offer of restitution to impacted clients, and a fine of $125,000 (Texas, 2022). LPL’s supervision of two LPL broker-dealer and/or investment adviser agents who pled guilty to charges of fraudulent practices with LPL customers, resulting in a cease and desist order, a fine of $350,000 and a $150,000 contribution for financial literacy and investor education initiatives, training and related materials (Connecticut, 2021). LPL’s supervision of an LPL representative under a heightened supervision plan, resulting in a cease and desist order; a fine of $275,000; payments of restitution, disgorgement and investigative costs; and offers of payment of surrender charges in connection with variable annuity contracts for impacted customers (New Hampshire or “NH”, 2020). LPL’s failure to timely register (or maintain the registration of) certain agents in MA and failure to amend Forms U4 and U5 for certain agents registered in MA, resulting in a censure, a fine of $1,100,000, and an undertaking to review and enhance its policies and procedures related to registering its agents in MA and filing reportable events (MA, 2019). LPL’s brokerage supervisory procedures relating to email review and annual branch office examinations, resulting in a civil penalty of $450,000 and an undertaking for third-party review of related processes (Indiana, 2018). • The sale of unregistered, non-exempt securities in violation of state registration requirements, resulting (upon entry of the individual consent order) in payment to each participating state or jurisdiction of a civil penalty of $499,000, reimbursement of certain investigative expenses, remediation through repurchase of certain securities and payment of losses to certain affected customers, and certain additional undertakings (Settlement with up to 53 members of the North American Securities Administrators Association (NASAA), 2018). • • • The sale of non-traded alternative investments in excess of prospectus standards or LPL’s internal guidelines and the maintenance of related books and records, resulting in a censure, a fine of $950,000, a $25,000 contribution to an investor education fund and remediation of losses to impacted customers (New Jersey, 2017). LPL’s supervisory practices for LPL representatives located on the premises of a credit union, resulting in a censure, a fine of $1,000,000, and an undertaking to avoid investor confusion specific to the name under which the credit union does business and review LPL’s related policies and procedures (MA, 2017). LPL’s oversight of certain VA transactions, resulting in a censure, a fine of $975,000, restitution to clients and former clients of an LPL representative, disgorgement of commissions retained by LPL in connection with such representative’s VA sales, and an undertaking to review such representative’s brokerage and advisory activities and LPL’s related policies and procedures (MA, 2017). For more information about those state events and other disciplinary and legal events involving LPL and its IARs, client should refer to Investment Adviser Public Disclosure at https://adviserinfo.sec.gov/ or FINRA BrokerCheck at https://brokercheck.finra.org/. ITEM 10 OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS LPL is a broker-dealer registered with FINRA and the SEC. As a broker-dealer, LPL transacts business in various types of securities, including mutual funds, stocks, bonds, commodities, options, private and public partnerships, variable annuities, REITs and other investment products. LPL is registered to operate in all 50 states and has primarily an independent-contractor sales force of registered representatives and IARs dispersed throughout the United States. LPL has a dedicated team of employee IARs in its offices who service certain accounts, and also a small subset of IARs who operate their own offices or are A 1 6 – 0 3 2 6 P a g e 1 1 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE located on the premises of certain financial institutions and are employees of LPL Employee Services, LLC, an LPL-affiliated company. IARs may be broker-dealer registered representatives of LPL. LPL is also registered as an introducing broker with the Commodity Futures Trading Commission. In addition, LPL is qualified to sell insurance products in all 50 states. LPL and The Private Trust Company, N.A. (“PTC”), a federally chartered non-depository bank licensed to provide trust services in all 50 states, are related persons. PTC also provides personal trustee services to clients for a variety of administrative fiduciary services. Because LPL and PTC are affiliated companies and share in revenues, there is a financial benefit to the companies if a client uses PTC as a custodian or for personal trustee services, or if a PTC client uses LPL as an investment adviser. PTC’s IRA custodian and trustee services and related fees are established under a separate engagement between the client and PTC. Fiduciary Trust Company of New Hampshire (“FTC”), a non-depository trust company, is a related person of LPL. FTC provides custodial and various other recordkeeping and services to IRAs and certain employer-sponsored plans maintained through non- Program accounts. Because LPL and FTC are affiliated companies and share in revenues, there is a financial benefit to the companies if a client is referred to or otherwise elects to engage with FTC for services under another LPL program, and uses LPL as the registered investment adviser or broker-dealer. FTC’s custodial and recordkeeping services and related fees are established under a separate engagement between the client and FTC. Our affiliate, LPL Enterprise, LLC (“LPLE”), is an investment adviser registered with the SEC and a broker-dealer registered with FINRA and the SEC. As a broker-dealer, LPLE transacts business in various types of securities, including mutual funds, stocks, bonds, commodities, options, private and public partnerships, variable annuities, REITs and other investment products. LPLE is registered to operate in all 50 states and has primarily an independent-contractor sales force of registered representatives and investment adviser representatives dispersed throughout the United States. In addition, LPLE is qualified to sell insurance products in all 50 states. IARs are permitted to engage in certain LPL-approved business activities other than the provision of brokerage and advisory services through LPL, and in certain cases, an IAR could receive greater compensation through the outside business than through LPL. An IAR could also be an accountant, real estate agent, tax preparer, lawyer or refer customers to other service providers and receive referral fees, for example. As other examples, an IAR could provide advisory or financial planning services through an independent unaffiliated investment advisory firm, sell insurance, or provide third-party administration to retirement plans through a separate firm. If an IAR provides investment services to a retirement plan as a representative of LPL and also provides administration services to the plan through a separate firm, this typically means the IAR is compensated from the plan for the two services. If you engage with an IAR for services separate from LPL, you may wish to discuss with him or her any questions you have about the compensation he or she receives from the engagement. Additionally, LPL and/or its IARs may refer clients to unaffiliated firms other than investment product sponsors or financial institutions, for either investment or non-investment related products or services, in exchange for a referral fee or other forms of indirect compensation. These may include referrals for investment banking, lending, accounting, tax preparation, financial technology tools, or such other products, services or consultations that may be requested by and/or benefit a client. As applicable, clients will receive additional disclosures identifying these particular arrangements and any related compensation at the time of the referral. LPL has an affiliated insurance agency, LPL Insurance Associates, Inc. (“LPLIA”) through which IARs may sell insurance products. LPL receives compensation from issuers of life insurance (universal, variable universal, whole life, and term) and other insurance contracts that are made available by IARs, such as long term care insurance and disability insurance. The compensation includes commissions and trails, and may include payments for administrative services that LPL provides and/or payments made in connection with LPL’s marketing and sales-force education and training efforts, including LPL’s annual national sales and education conference and other conferences. IARs receive a percentage of the commissions or trailing commissions paid to LPL or LPLIA. IARs may also sell insurance through an independent unaffiliated insurance agency. An IAR may earn compensation (including trailing compensation), benefits and non-cash compensation through the third party insurance agency and may have an incentive to recommend you purchase or sell insurance products with the independent agency. A 1 6 – 0 3 2 6 P a g e 1 2 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE Some IARs work with UIT sponsors to create customized UITs. For customized UITs, IARs provide the UIT sponsor with input regarding the portfolio composition of the UIT, and in exchange may be paid a consulting fee. The UIT sponsor retains sole responsibility for creating and implementing the investment portfolio of the UIT. An IAR is permitted to invest Program account assets in customized UITs for which the IAR provided consulting services. LPL has policies and procedures in place for customized UITs that are designed to prevent conflicts of interest and to ensure that IARs act in clients’ best interest. Among other things, these policies prevent IARs from receiving consulting fees for assets that any LPL client invests in customized UITs. Depending on the securities held by the UIT, a customized UIT’s sales charges and sponsor fees could be more expensive than separately purchasing the basket of securities in the UIT’s portfolio. Before investing a customized UIT, ask your IAR questions about compensation received from the UIT and about the UIT’s fees and expenses. ITEM 11 CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING Code of Ethics and Personal Trading LPL has adopted a code of ethics that includes guidelines regarding personal securities transactions of its employees and IARs. The code of ethics permits LPL employees and IARs to invest for their own personal accounts in the same securities that LPL and IARs purchase for clients in Program accounts. This presents a conflict of interest because trading by an employee or IAR in a personal securities account in the same security on or about the same time as trading by a client can disadvantage the client. LPL addresses this conflict of interest by requiring in its code of ethics that LPL employees and IARs report certain personal securities transactions and holdings to LPL. LPL has procedures to review personal trading accounts for front-running. In addition, employees in LPL’s Research Department are required to obtain pre-clearance prior to purchasing certain securities for a personal account. Employees and IARs are also required to obtain pre-approval for investments in private placements and initial public offerings. A copy of the code of ethics is available to clients or prospective clients upon request and is available at lpl.com/disclosures.html. As described under Brokerage Practices below, IARs may aggregate transactions in equities, options, and fixed income securities for client accounts. Clients should be aware that the IAR’s personal accounts (including related accounts, such as those of family members) can be included in such a block order. Although the same average price would be applied to client accounts and the IAR’s personal accounts, the inclusion of an IAR’s personal account in a block order can present a conflict of interest. It is possible that the inclusion of the personal account could negatively impact the price of the security or result in the client being allocated less of an order. If a partially filled order is allocated on a random basis, the inclusion of the personal account could make it less probable that a client account is randomly selected and the IAR’s personal account could be randomly selected instead of a client account. LPL addresses this conflict by disclosing it to you. Please ask your IAR if you would like more information on the IAR’s practices in this respect. Participation or Interest in Client Transactions Purchases of mutual fund or UIT or shares may be processed through the firm's proprietary account resulting in such purchases being characterized as principal transactions for certain reporting purposes. In such case, the shares will be purchased at the fund’s net asset value, and no additional charges will be applied to such transactions as a result of the firm’s use of a proprietary account. LPL does not otherwise engage in principal transactions with its clients in the Program. LPL’s parent company, LPL Financial Holdings Inc., is a publicly traded company. LPL does not permit its IARs to recommend or purchase LPL Financial Holdings Inc. stock in Program accounts. However, IARs may recommend or purchase an ETF or mutual fund that holds LPL Financial Holdings Inc. stock as an underlying investment, for example, an ETF that seeks to replicate the performance of an investment services index that includes LPL Financial Holdings Inc. Compensation; Revenue Sharing Arrangements, Mutual Fund 12b-1 Fees; and Recordkeeping Services LPL charges a setup fee to product sponsors when adding new investment products or share classes of an investment product to LPL’s investment platforms. In the case of exchange traded products, LPL receives up to $15,000 as a sponsor level due diligence fee, up to $7,500 per fund and up to $15,000 per product for complex ETPs. In the case of mutual funds, LPL receives a one-time A 1 6 – 0 3 2 6 P a g e 1 3 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE set up fee of up to $15,000 as a sponsor level due diligence fee and a setup fee of $7,500 per fund. In the case of UITs, LPL receives up to $5,000 per trust. LPL does not share this compensation with its IARs. LPL provides investment consulting services to the adviser to the Optimum Funds including, but not limited to: 1) assisting the adviser in determining whether to employ, maintain or terminate sub-advisers for the Optimum Funds, 2) providing quarterly fact sheets describing the performance of the Optimum Funds, 3) providing quarterly analysis consisting of statistical information and analysis regarding the Optimum Funds and sub-adviser performance, 4) meeting with sub-advisers selected by the adviser to the Optimum Funds to discuss their performance and prepare reports regarding their evaluations, and 5) helping the adviser make recommendations on sub-advisers to the Board of Trustees by providing the adviser to the Optimum Funds with potential sub- adviser options. As compensation for these services, LPL receives an investment consulting fee of up to 0.22% of fund assets from the investment advisor to the Optimum Funds. The receipt of this investment consulting compensation by LPL presents a conflict of interest, because LPL has a financial benefit if an Optimum Fund is purchased in an account. This fee is not shared with LPLE or its IARs. In addition, a senior executive officer of LPL serves as a Trustee of the Optimum Funds. The Optimum Funds are available to be purchased and sold in a Program account. From time to time, LPL receives a reallowance of the public offering price per unit on units of certain UITs and structured products sold by LPL during the initial offering period. Non-Sweep Money Market Mutual Fund Investments Clients are able to invest cash balances in a limited number of money market mutual funds (such funds, “Money Market Funds”). Depending on interest rates and other market factors, investment returns of money market mutual funds have been, and may be in the future , lower than the aggregate fees and expenses charged by LPL for a client’s participation in the Program. This may result in a client experiencing a negative overall investment return with respect to cash reserves invested in the Money Market Funds. As described above, under “Fees Charged by Third Parties,” clients should understand that in many cases the Program Share Class offered for a particular Money Market Fund charges higher fees and expenses than other share classes that are offered by the same Money Market Fund but are not available through the Program. Unlike other types of mutual funds available in the Program, LPL makes available Money Market Funds from only a limited number of mutual fund sponsors. Because of the limited number of Money Market Funds available in the Program and the fees paid by those funds, other money market mutual funds not available through the Program are likely to have higher returns than the Money Market Funds. Credit Cards As part of its cash management services, LPL makes available for its customers credit cards through a partner bank. LPL receives a flat fee for each new activated credit card that is used by the cardholder in the first 90 days. LPL also receives a portion of the transaction volume of the cardholder’s account. LPL’s portion of the transaction volume varies depending on the number of LPL active cardholders. Rollovers If a client is a participant in an employer-sponsored plan such as a 401(k) plan, and decides to roll assets out of the plan into an account at LPL, LPL and LPL IARs have a financial incentive to recommend that the client invest those assets in the client’s account, because LPL will be paid on those assets, for example, through advisory fees. Client should be aware that such fees likely will be higher than those a participant pays through employer-sponsored plans, and there can be maintenance and other miscellaneous fees. As securities held in an employer-sponsored plan are generally not transferrable to client’s account, commissions and sales charges may be charged when liquidating such securities prior to the transfer, in addition to commissions and sales charges previously paid on transactions in the plan. This conflict of interest is mitigated by LPL’s policy regarding rollovers from an employer-sponsored plan into an LPL IRA. LPL and LPL IARs may assist clients contemplating a rollover by providing general investment education to assist plan participants in making informed investment decisions about the distribution options available to them. LPL’s educational services are intended to be consistent with the Department of Labor’s Interpretive Bulletin 96-1. LPL is not acting in a fiduciary A 1 6 – 0 3 2 6 P a g e 1 4 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE capacity under ERISA when providing educational services. The general investment education provided is not intended to be viewed or construed as a suggestion for client to take a particular course of action with respect to employer-sponsored plan assets (including, a distribution therefrom). With respect to employer-sponsored plan rollovers, LPL makes information available that outlines the many factors client should consider (including the types of fees and costs of an IRA and IRA investments) before making a decision. IARs may also agree to assist clients seeking a recommendation on whether to roll out of their employer-sponsored plan based on an analysis of the client’s personal financial needs, savings objectives and other financial and non-financial considerations, that is designed to determine whether such is in the client’s best interest under ERISA.. IRA to IRA Transfers If LPL or an LPL IAR recommends that a client move assets from an LPL brokerage IRA account or an IRA account held at another financial institution into the account, they are required to consider, based on the information client provides, whether client will be giving up certain investment-related benefits, such as the effects of breakpoints or rights of accumulation, and has determined that the recommendation is in client’s best interest because (1) greater services and/or other benefits (including discretionary management, trust services, holistic advice and planning, and automatic account rebalancing) can be achieved with the account; (2) access to your chosen IAR and asset consolidation (in the case of a transfer from another financial institution) and (3) the asset based fees and transaction charges are justified by these services and features. Other Clients Clients should understand that LPL and IAR perform advisory and/or brokerage services for various other clients, and that LPL and IAR may give advice or take actions for those other clients that differ from the advice given to the client. The timing or nature of any action taken for the account may also be different. ITEM 12 BROKERAGE PRACTICES In LPL Access Portfolios, LPL requires that clients direct Custodian as the broker-dealer to execute transactions in the account. The IAR is not paid a commission, but Custodian is paid transaction charges by the client for processing trades depending on the type of security. Clients should understand that not all advisors require their clients to direct brokerage. By directing brokerage to Custodian, clients may be unable to achieve the most favorable execution of client transactions. Therefore, directed brokerage may cost clients more money. ITEM 13 REVIEW OF ACCOUNTS LPL reviews program accounts using a risk based exception reporting system that flags accounts for criteria such as trading activity and concentration on a quarterly or monthly basis, depending upon the nature of the exception. The Chief Compliance Officer of LPL oversees the process for reviewing flagged accounts IARs review accounts and meet with clients, on a regular basis or as requested by the client, and such meetings may include review of accounts statements, performance information, and other information or data related to the client’s account and investment objectives. Custodian sends monthly or quarterly account statements showing the amount of funds and each security in the account at the end of the period and setting forth all transactions in the account during that period. Clients should carefully review those account statements. LPL is not responsible for verifying the accuracy of the information in such statements or any losses or errors by Custodian, including but not limited to errors in performance reports and/or fees charged to the account, if caused by, or in any way related to, its reliance on such information and/or the acts or omissions of Custodian with respect to the account. Client will also receive performance information annually from LPL describing account performance, positions and activity. Additional performance information is available upon request. Client understands that it is important to review promptly confirmations, account statements, disclosures, and other documents and communications that LPL or IAR provides. Client agrees to notify LPL or IAR promptly if anything in the account documents appears inaccurate or suspicious. ITEM 14 CLIENT REFERRALS AND OTHER COMPENSATION LPL, LPL employees and IARs receive additional compensation, business entertainment and gifts from product sponsors. However, such compensation may not be tied to the sales of any products. Compensation includes such items as gifts valued at less than A 1 6 – 0 3 2 6 P a g e 1 5 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE $100 annually, an occasional dinner or ticket to a sporting event, or reimbursement in connection with educational meetings, customer appreciation events or marketing or advertising initiatives, including services for identifying prospective clients. Product sponsors also pay for, or reimburse LPL for the costs associated with, education or training events that may be attended by LPL employees and IARs and for LPL-sponsored conferences and events. LPL, LPL employees and IARs also receive reimbursement from product sponsors for technology-related costs, such as those to build systems, tools and new features to aid in servicing customers. LPL receives compensation from certain third-party vendors, including technology providers and affinity partners, in connection with conferences, educational events, and similar programs made available to IARs. These arrangements may include sponsorship fees, booth or exhibition fees, payments or participation in breakout sessions or presentations, revenue-sharing arrangements, and other forms of compensation. In exchange for such compensation, vendors may receive opportunities to promote their products or services to IARs, including conference recognition, exhibit space, participation in educational sessions, access to attendee information (which does not include email addresses), and other marketing or promotional benefits. These arrangements create a conflict of interest because LPL has a financial incentive to feature, promote, or make available certain vendors or service providers over others. IARs are not required to use any particular vendor, and participation in or exposure to vendor-sponsored events does not constitute an endorsement of the vendor or its products or services by LPL. LPL employees provide sales support resources to IARs that use LPL advisory programs. The compensation that LPL pays to these employees varies based on the assets in LPL’s different advisory programs. These employees have an incentive to promote certain advisory programs to IARs over other advisory programs. These employees also earn more compensation when IARs transition client assets from brokerage accounts to advisory accounts, and have a financial incentive to encourage IARs to transition brokerage accounts to advisory. In the event a trade error occurs in a Program account, and such error is determined to be caused by LPL, LPL typically will cancel the trade and remove the resulting monetary loss to the client from the account. If a trade correction is required as a result of client (e.g., if client does not make full payment for purchases or fails to deliver negotiable securities for liquidations before trade settlement), LPL typically will cancel the trade and any resulting monetary loss will be borne by the client. Client Referrals From time to time, LPL and/or its IARs enter into arrangements with clients, third parties or other financial intermediaries for lead generation, client referrals or solicitation for program accounts (collectively, “solicitation arrangements”). These solicitation arrangements range from largely impersonal referrals to specific client introductions to LPL and its IARs. Under solicitation arrangements, the third parties and financial intermediaries are independent contractors. In most cases, third parties are not advisory clients of LPL and do not refer clients based on their experience with LPL as advisory clients. The compensation paid under the solicitation arrangements is structured in various ways, including a one-time fee, a flat fee per lead or referral, and sharing a portion of the ongoing Advisory Fee. LPL and its IARs have generally entered into the following types of referral arrangements: • Referral Networks. Some third parties operate referral networks. Referral networks may present potential clients with a list of possible investing firms and investment adviser representatives, or may direct potential clients specifically only to LPL and its IARs. Some referral networks receive a flat fee per referral and/or an ongoing fee, while others share a portion of the ongoing Advisory Fee; • Professional Cross Referrals. Some IARs have relationships with other professionals, such as accountants, lawyers or tax advisors, in which the professionals refer clients to IARs and in exchange the IARs refer clients to the professionals for their services. The cross-referral arrangement is a quid pro quo relationship that can give rise to similar conflicts as compensated referrals; • Client Referral Awards. Investment advisory clients of LPL’s IARs refer new advisory clients to their IARs. Sometimes, in connection with these referrals, IARs pay their clients one-time, non-cash gifts like gift cards or tickets to events for the clients referring to them new advisory clients; A 1 6 – 0 3 2 6 P a g e 1 6 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE • Unaffiliated Financial Institutions. LPL and its IARs offer advisory services on the premises of unaffiliated financial institutions, like banks or credit unions. These financial institutions refer clients to LPL. See more about LPL’s relationship with financial institutions under “Unaffiliated Financial Institutions” below; and • Other Arrangements. LPL and its IARs may enter into other arrangements in the future that provide for compensation similar to one or more of the types of arrangements described above. Depending on the solicitor’s arrangement with LPL, a solicitor may not be compensated for referring a client who opens a brokerage account rather than an advisory account, and as a result may encourage the client to open an advisory account instead of a brokerage account. Solicitation arrangements give rise to material conflicts of interest because the referring party has a financial incentive to introduce new investment advisory clients to LPL and its IARs. Solicitors may also have other conflicts of interest with respect to a particular IAR or may be associated with LPL in another way. Clients who are introduced to LPL and its IARs through a solicitation arrangement receive specific disclosures at the time of the introduction. If you receive such disclosures, you should review them carefully to understand the details of LPL’s arrangements with the person introducing you to LPL. LPL’s participation in these referral arrangements does not diminish its fiduciary obligations to its clients. Conflicts Related to LPL Compensation to IAR The IAR recommending an advisory service receives compensation from LPL. In most cases, LPL has a compensation arrangement directly with the IAR. (In certain cases, LPL has entered into an agreement with a financial institution offering LPL’s advisory services on its bank or credit union premises, as described further below.) LPL typically compensates IARs pursuant to an independent contractor agreement and not as an employee. This compensation includes all or a portion of the advisory fee and, such portion received by IAR may be more than what IAR would receive at another investment advisor firm. Such compensation includes other types of compensation, such as bonuses, awards or other things of value offered by LPL to the IAR. All compensation paid to the IAR will be the sole responsibility of LPL and is payable by LPL out of the investment advisory fee clients pay to LPL. IARs have a financial incentive to negotiate fee arrangements that maximize their compensation. In some programs, LPL charges a negotiable advisory fee for itself plus a fee for third-party managers that is not negotiable. Differences in fees for third-party managers, and the absence of such fees in other programs, creates a conflict of interest for the IARs insofar as IARs can negotiate a higher LPL advisory fee for a program or strategy with lower or no separate manager fee than they could for an account subject to a higher third-party manager. The amount received by an IAR as a result of a client’s participation in any particular program offered by LPL often is more than the IAR would have received if the client participated in other programs, paid third-party manager fees, or paid separately for investment advice, brokerage and other services covered by the account fee. In particular, LPL pays its IARs in different ways, for example: • payments based on production • equity awards from LPL’s parent company, LPL Financial Holdings Inc., consisting of awards of either restricted stock units (a promise to deliver stock in the future) or stock options to purchase stock, in each case subject to satisfaction of vesting and other conditions reimbursement or credits of fees that IARs pay to LPL for items such as administrative services, or technology fees free or reduced-cost marketing materials advances of advisory fees attendance at LPL conferences and events. • • • payments in connection with the transition of association from another broker-dealer or investment advisor firm to LPL • • payments in the form of repayable or forgivable loans • Some of these forms of compensation, particularly equity awards of LPL Financial Holdings Inc., give IARs a financial interest in the success of LPL. IARs who have a financial interest in the success of LPL have an incentive to recommend investments that are more profitable for LPL, regardless of whether the IARs share in that compensation directly. A 1 6 – 0 3 2 6 P a g e 1 7 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE Note that LPL has a dedicated team of employee IARs in its offices who service certain accounts, and also a small subset of IARs who operate their own offices or are located on the premises of certain financial institutions and are employees of LPL Employee Services, LLC, an LPL-affiliated company. In such cases, the IARs are compensated as employees, and such compensation can include a salary, bonus and other things of value as set out above. LPL also charges IARs various fees under its independent contractor agreement, for example, for administrative, custody and clearing services to accounts, technology and licensing. In certain cases, LPL pays IARs this compensation, and charges IARs these fees, based on the IAR’s overall business production and/or on the amount of assets serviced in LPL advisory relationships. When compensation or fees charged is based on the level of production or advisory assets of an IAR, the IAR has a financial incentive to meet those production or asset levels. The amount of this compensation from LPL could be more, and the amount of these fees charged by LPL could be less, than what the IAR would receive, or pay, if he or she associated with another investment advisor firm. The level of compensation and costs is an incentive for an IAR to become associated with LPL over another investment advisor firm. This compensation the IAR receives from LPL could be more than if the client participated in other LPL programs, programs of other investment advisors or paid separately for investment advice, brokerage and other client services, and likewise, the fees that IAR pays to LPL could be less for the Program than other programs or services. Although the IAR may factor in the fees charged to them by LPL in the overall Advisory Fee negotiated by the client, IAR can still earn more for offering the Program at a lower overall fee rate than the fee rate for a program offering a third-party manager. In such cases, the IAR has a financial incentive to recommend advisory services in the Program over other programs and services. However, an IAR may only recommend a program or service that he or she believes is suitable and in the best interests of a client in accordance with the applicable standards under the Advisers Act or other applicable law. LPL has systems in place to review IAR-managed accounts in the Program for suitability over the course of the advisory relationship. LPL also provides various benefits and/or payments to IARs that are newly associated with LPL to assist the IAR with the costs (including foregone revenues during account transition) associated with transitioning his or her business to LPL (collectively referred to as “Transition Assistance”). The proceeds of such Transition Assistance payments are intended to be used for a variety of purposes, including but not necessarily limited to, providing working capital to assist in funding the IAR’s business, satisfying any outstanding debt owed to the IAR’s prior firm, offsetting account transfer fees (ACATs) as a result of the IAR’s clients transitioning to LPL’s custodial platform, technology set-up fees, marketing and mailing costs, stationary and licensure transfer fees, moving expenses, office space expenses, staffing support and termination fees associated with moving accounts. The amount of the Transition Assistance payments is often significant in relation to the overall revenue earned or compensation received by the IAR at his or her prior firm. Such payments are generally based on the size of the IAR’s business established at his or her prior firm, for example, a percentage of the revenue earned or eligible assets serviced by the IAR at the prior firm, and, in certain cases, on the amount of the IAR’s client assets that are transferred to LPL above an agreed-upon threshold. These payments are generally in the form of payments or loans to the new LPL IAR with favorable interest rate terms as permitted under applicable law, which are paid by LPL or forgiven by LPL based on years of service with LPL (e.g., if the IAR remains with LPL for 5 years) and/or the scope of business engaged in with LPL. LPL does not verify that any payments made are actually used for such transition costs. In addition, existing IARs are eligible to receive financial assistance from LPL in connection with transferring existing client accounts serviced at an approved third-party investment program to an on-platform LPL advisory or brokerage account (“Operational Assistance”). These payments are typically calculated as a percentage of assets transferred to LPL up to 0.15%, but in some cases may involve a flat amount up to $350 per transferred account, and are also generally payable in the form of payments or loans to the IAR that are forgivable based on years of service with LPL. While the loans are intended to offset bona fide time and effort incurred by IARs in identifying and coordinating transfers, the loans can create an incentive for IARs to recommend that clients transfer their assets to on-platform LPL advisory and brokerage accounts. However, an IAR may only recommend a program or service that he or she believes is suitable and in the best interests of a client in accordance with the standard of care under applicable law. The receipt of Transition Assistance or Operational Assistance creates a conflict of interest in that an IAR has a financial incentive to recommend that a client open and maintain an account with the IAR and LPL for advisory, brokerage and/or A 1 6 – 0 3 2 6 P a g e 1 8 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE custody services, and to recommend switching investment products or services where a client’s current investment options are either not available through LPL, or are maintained through a third-party investment program, in order to receive the Transition Assistance or Operational Assistance benefit or payment. LPL and its IARs attempt to mitigate these conflicts of interest by evaluating and recommending that clients use LPL’s services based on the benefits that such services provide to clients, rather than the Transition Assistance or Operational Assistance earned by any particular IAR. However, clients should be aware of this conflict and take it into consideration in making a decision whether to establish or maintain a relationship with LPL, or to transfer an existing third-party investment program account to LPL. If LPL makes a payment or loan to a new or existing IAR, there is also a conflict of interest because LPL’s interest in collecting on the payment or loan affects its ability to objectively supervise the IAR. Ownership Interest in Doing-Business-As (“DBA”) Entities Some IARs operate through independent practices with a separate Doing-Business-As (or “DBA”) designation. In some cases, LPL may partially or wholly own such practices, and have a financial interest in the business success of the DBA as a whole, or in a particular element of the DBA via specific ownership interests in its brokerage, advisory, insurance, or other financial services business (or any combination thereof). Clients should ask their IAR about the extent to which LPL has a financial interest in their practice. Unaffiliated Financial Institutions LPL and its IARs offer advisory services on the premises of unaffiliated financial institutions, like banks or credit unions. When services are offered in a bank or credit union, the advisory services are offered by LPL and not the financial institution. Any securities recommended as part of the investment advice are not guaranteed by the financial institution, or insured by the Federal Deposit Insurance Corporation or any other federal or state deposit guarantee fund relating to financial institutions. LPL has entered into agreements with the financial institutions pursuant to which LPL typically shares compensation, including a portion of the Advisory Fee, with the financial institution for the use of the financial institution’s facilities and for client referrals. Instead of paying the IAR the portion of the Advisory Fee as described above, LPL shares the Advisory Fee with the financial institution, and the financial institution pays part of that amount to the IAR. The financial institution establishes the compensation plan for the IAR, which is subject to approval by LPL. The compensation plan determines how the IAR’s compensation is structured. IAR will have a financial incentive to recommend a particular service or product if under the compensation plan the recommended product will result in more compensation to the IAR than another product or service, including advisory versus brokerage services. If an IAR is recommending an advisory program or service, he or she must believe that the program or service is suitable and in the best interests of the client in accordance with the applicable standards under the Advisers Act. In a few situations, LPL has agreements to provide similar services at financial institutions in which compensation is not shared with the financial institution. If IAR is an employee of the financial institution where it provides services to program accounts, LPL typically shares with the financial institution between 75% to 100% of the Advisory Fee, after LPL retains its portion of the Advisory Fee for its administrative services. IAR (an employee of the financial institution) will be compensated (e.g. in the form of salary, bonus, commissions, etc.) by the financial institution based on the specific agreement and/or compensation between the financial institution and the IAR. If IAR is not an employee of the financial institution where it provides services to program accounts, LPL typically shares directly with IAR, after deduction of LPL’s portion, between 25% to 100% of the Advisory Fee, and with the financial institution between 0% to 75%. All compensation paid to IAR or the financial institution will be the sole responsibility of LPL, and will not result in any increase in the Advisory Fees you pay to LPL. Some of these financial institutions are affiliated with investment product sponsors (such as mutual fund sponsors) or offer certificates of deposit. An IAR located on the premises of a financial institution has a potential conflict of interest when IAR encourages clients to invest in that financial institution’s certificates of deposit or proprietary investment products, such as mutual funds and structured products. If your IAR is an employee of and/or provides services on the premises of one of these financial institutions, the financial institution has a financial incentive for its IAR to select the financial institution’s affiliated investment products or certificates of deposit over non-affiliated products. When an affiliated investment product is selected for an account, A 1 6 – 0 3 2 6 P a g e 1 9 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE the financial institution receives a portion of the Advisory Fee pursuant to the agreement between LPL and the financial institution and its affiliate receives fees or other benefits from the affiliated investment product. Because affiliates of the financial institution earn fees and other benefits from the affiliated products, the financial institution has an incentive to select its affiliated product based on the compensation and benefits its affiliates receive rather than on a client’s needs. In addition, because mutual funds benefit from scale, the financial institution and its affiliated companies have an interest in the mutual funds gaining greater assets. Certain financial institutions provide a credit in an amount equal to the mutual fund advisory and administrative services fees for affiliated investment products. We update this information from time to time on lpl.com/disclosures.html. For more information, click on “Account Disclosures, Agreements, Fee Schedules & Conflicts of Interest,” and then “Third Party Compensation and Related Conflicts of Interest.” Note that the IAR does not receive additional compensation from the financial institution for selecting affiliated products and the IAR may only recommend an investment product that he or she believes is appropriate for clients. LPL reviews and selects investment products for the Program and LPL may elect to remove or replace an investment product. There is a conflict of interest because the business relationship between LPL and the financial institution could affect LPL’s ability to objectively select and determine whether to continue to maintain these investment products in the Program. However, LPL only approves investment products that it determines are suitable and in the best interests of clients using the Program depending on clients’ investment objective and risk tolerance. LPL also provides other forms of compensation to financial institutions, such as bonuses, awards or other things of value offered by LPL to the institution. For example, LPL pays financial institutions based on production, in the form of repayable or forgivable loans, reimbursement of fees that LPL charges for items such as administrative services, and other things of value such as free or reduced-cost marketing materials, transition assistance for changing association from another broker-dealer or investment advisor firm to LPL, advances of advisory fees, and/or attendance at LPL’s national conference or top producer forums and events. LPL can pay this compensation based on overall business production and/or on the amount of assets serviced in LPL advisory programs. Financial institutions are also eligible to receive Operational Assistance (as defined above) from LPL in order to assist with offsetting time and expense in coordinating transfers of client accounts from third party investment platforms to LPL’s platform. The compensation is typically calculated and payable to the institution as a percentage of assets transferred to LPL up to 0.15%, but in some cases may be a flat-dollar amount per transferred account with a maximum of up to $350 per account. The amount of this compensation may be more than what the financial institution would receive if the client participated in other LPL programs, programs of other investment advisors or paid separately for investment advice, brokerage and other client services. As a result, the financial institution and IAR have a financial incentive for the IAR to recommend the program account and services that will result in the greatest compensation to the financial institution and IAR. If LPL makes a loan to a new or existing financial institution, there is also a conflict of interest because LPL’s interest in collecting on the loan affects its ability to objectively supervise an IAR at that financial institution. In addition, financial institution employees who are not associated with LPL often refer prospective customers to IARs working in the financial institutions. Those employees frequently receive a nominal referral fee from the financial institution (typically up to $25) as compensation for each referral. Employees of trust departments at certain financial institutions are authorized under the terms of applicable trust arrangements to delegate investment management responsibility to LPL and to receive a portion of the compensation earned in connection with investment advisory services provided to these accounts through LPL. These amounts are negotiated and vary but often amount to a significant portion of the total fees paid for investment advisory services. ITEM 15 CUSTODY LPL utilizes a qualified custodian as defined in Rule 206(4)-2 under the Advisers Act to maintain custody of Program client funds and securities in a separate account for each client under the client’s name. Custodian sends monthly or quarterly account statements showing the amount of funds and each security in the account at the end of the period and setting forth all transactions in the account during that period. Clients should carefully review those account statements. LPL is not responsible for verifying the accuracy of the information in such statements or any losses or errors by Custodian, including but not limited to A 1 6 – 0 3 2 6 P a g e 2 0 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE errors in performance reports and/or fees charged to the account, if caused by, or in any way related to, its reliance on such information and/or the acts or omissions of Custodian with respect to the account. ITEM 16 INVESTMENT DISCRETION In the Program, the IAR provides advisory services on a discretionary basis for the purchase and sale of Program securities. The client authorizes the IAR to have discretion by executing the Advisory Agreement and Client Profile. ITEM 17 VOTING CLIENT SECURITIES In the Program, LPL and IARs do not accept authority to vote client securities. Clients retain the right to vote all proxies that are solicited for securities held in the account. Clients will receive proxies or other solicitations from LPL. If clients have questions regarding the solicitation, they should contact the contact person that the issuer identifies in the proxy materials or their IAR. In addition, LPL and IARs do not accept authority to take action with respect to legal proceedings relating to securities held in the account. ITEM 18 FINANCIAL INFORMATION LPL is a qualified custodian as defined in Rule 206(4)-2 under the Advisers Act and is therefore not required to include a balance sheet for its most recent financial fiscal year. LPL is not aware of any financial condition that is reasonably likely to impair its ability to meet its contractual commitments to clients, nor has it been the subject of a bankruptcy petition at any time during the past ten years. A 1 6 – 0 3 2 6 P a g e 2 1 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C  LPL ACCESS PORTFOLIOS - PROGRAM BROCHURE Brochure Supplements Accompanying this Brochure are Brochure Supplements for members of the LPL Research team. Note that although these individuals are responsible for certain investment advice provided by LPL and may meet with clients from time to time, they are not the IARs responsible for the ongoing individualized investment advice for your account. For more information about the IAR(s) managing your account, please should refer to the Brochure Supplement(s) for your IAR(s), which should have been provided along with this Brochure at the time you opened the account. If you did not receive a Brochure Supplement for your IAR(s), please contact your IAR or LPL at lplfinancial.adv@lplfinancial.com. A 1 6 – 0 3 2 6 P a g e 2 2 L P L F I N A N C I A L L L C M e m b e r F I N R A / S IP C 

Program Brochure Strategic Asset Management (SAM) Program Model Wealth Portfolios (MWP) Program Manager Select (MS) Program Optimum Market Portfolios (OMP) Program Guided Wealth Portfolios (GWP) Program Individual Participant Advice (IPA) Program LPL Financial LLC 1055 LPL Way, Fort Mill, SC 29715 www.lpl.com (704) 733-3482 June 15, 2026 This program brochure provides information about the qualifications and business practices of LPL Financial (LPL). If clients have any questions about the contents of this brochure, they should contact their LPL financial advisor or LPL at lplfinancial.adv@lplfinancial.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (SEC) or by any state securities authority. Additional information about LPL also is available on the SEC’s website at https://adviserinfo.sec.gov/. Item 1: Cover Page Item 2: Material Changes This is the initial consolidated brochure for the following advisory programs: Strategic Asset Management (SAM), Model Wealth Portfolios (MWP), Manager Select (MS), Optimum Market Portfolios (OMP), Guided Wealth Portfolios (GWP) and Individual Participant Advice (IPA). Each of these programs will continue to have its own, individual brochure (or, in the case of the IPA program, will also be covered in the Firm Brochure) for a limited period of time. Though the style and layout of the brochure have changed to reflect the multiple programs included, there have been no material substantive changes to the programs since the last annual updates for the programs, each filed with the SEC on March 31, 2026. For completeness, please see below for the material changes filed in Item 2 on March 31, 2026, for each program (reflecting changes to the programs in the annual period ending March 31, 2026): • Items 6 and 9 of SAM, MWP, MS, OMP and GWP were updated to disclose risks and conflicts of interest related to a client using securities in advisory accounts as collateral for non-purpose loans through an LPL Secured Credit Account, which is a securities-based lending program available through LPL. • Item 6 of OMP was updated to provide that effective November 24, 2025, LPL will be responsible for voting proxies solicited by, or with respect to, the issuers of any securities held in the account, except to the extent otherwise prohibited by law and unless clients opt to retain voting responsibility. 1  • Item 8 of SAM was updated to reflect that IARs may delegate discretionary investment and trading authority to LPL’s Research Department (LPL Research) under certain circumstances. • Item 9 of SAM, MWP, MS, OMP and GWP was updated to include additional information about LPL’s Dividend Reinvestment Program (DRP). This consolidated brochure amends, restates and supersedes the individual program brochures for each of the programs. Going forward, LPL expects that it will no longer provide individual brochures for the programs and will instead update this consolidated brochure. Item 3: Table of Contents Item 1: Cover Page ............................................................................................................................................ 1 Item 2: Material Changes ................................................................................................................................... 1 Item 3: Table of Contents ................................................................................................................................... 2 Item 4: Advisory Business .................................................................................................................................. 2 Item 5: Fees and Compensation ........................................................................................................................ 8 Item 6: Performance-Based Fees and Side-by-Side Management .................................................................. 19 Item 7: Types of Clients ................................................................................................................................... 19 Item 8: Methods of Analysis, Investment Strategies and Risk of Loss .............................................................. 20 Item 9: Disciplinary Information ........................................................................................................................ 36 Item 10: Other Financial Industry Activities and Affiliations .............................................................................. 38 Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ........................ 40 Item 12: Brokerage Practices........................................................................................................................... 48 Item 13: Review of Accounts............................................................................................................................ 50 Item 14: Client Referrals and Other Compensation .......................................................................................... 51 Item 15: Custody ............................................................................................................................................. 58 Item 16: Investment Discretion ........................................................................................................................ 59 Item 17: Voting Client Securities ...................................................................................................................... 60 Item 18: Financial Information.......................................................................................................................... 62 Item 4: Advisory Business Introduction LPL is an investment adviser registered with the SEC pursuant to the Investment Advisers Act of 1940 (the “Advisers Act”). LPL has provided advisory services as a registered investment adviser since 1975. Note that registration as an investment adviser with the SEC does not imply a certain level of skill or training. As of December 31, 2025, LPL managed approximately $818,320,000,000 of client assets on a discretionary basis and approximately $797,900,000 of client assets on a non-discretionary basis. LPL is owned 100% by LPL Holdings, Inc., which is owned 100% by LPL Financial Holdings Inc., a publicly held company. 2  LPL’s advisory services are made available to clients primarily through individuals associated with LPL as investment advisor representatives (IARs). IARs are required by applicable rules and policies to obtain licenses and complete certain training to recommend certain investment products and services. Clients should be aware that their IAR, depending on the licenses or training obtained, sometimes is not able to recommend certain investments, models, programs, or services. In addition, some clients’ IARs are located at a financial institution that does not offer certain products, investments, models, programs, or services. Clients should ask their IAR whether any limitations apply. LPL conducts its advisory business under the name “LPL Financial LLC,” as indicated in Form ADV and its communications and investment advisory agreements with clients. Although LPL and certain LPL IARs use separate marketing names or “doing-business-as” (DBA) designations, LPL does not conduct any advisory business primarily through any of those entities. LPL is also a broker-dealer registered with the Financial Industry Regulatory Authority (FINRA). LPL provides brokerage and execution services in its capacity as broker-dealer. Some IARs are registered with LPL as a broker-dealer registered representative. Those IARs are able to offer clients both investment advisory and brokerage services. Before engaging with an IAR, clients should take time to consider the differences between an advisory relationship and a brokerage relationship to determine which type of service best serves the client’s investment needs and goals. All recommendations regarding the investment advisory account types offered at LPL will be in an advisory capacity, and any recommendations regarding any brokerage account a client opens with LPL will be in a brokerage capacity, unless a client is expressly told otherwise. Clients should speak to the IAR to understand the different types of services available through LPL and the IAR. LPL also performs administrative services, such as performance reporting, for clients. Types of Advisory Services LPL offers various types of advisory services and programs, including both non-wrap and wrap fee programs, mutual fund asset allocation programs, an advisor-enhanced digital advice program, advisory programs offered by third-party investment advisor firms, financial planning services, and retirement plan consulting services. This Brochure provides a description of the advisory services offered under LPL’s SAM, MWP, MS, OMP, GWP, and IPA programs (the “Programs”). For more information about LPL’s advisory services and programs other than the Programs (e.g., financial planning), clients should contact their LPL IAR for a copy of a similar brochure that describes those services or programs or go to https://adviserinfo.sec.gov/ or lpl.com/disclosures.html. Client Agreements, Account Opening and Account Maintenance To open an account at LPL, clients must enter into an agreement with LPL (the “Client Agreement”). Depending on the client, the Client Agreement will be in the form of a “Program Agreement,” which covers only a specific Program, or the comprehensive “Client Relationship Agreement,” which covers all Programs outlined in this Brochure. Certain individuals and entity types, including ERISA plans, are not eligible to enter into a Client Relationship Agreement and must execute a Program Agreement. Clients under the Client Relationship Agreement are generally able to open subsequent accounts in any of the Programs without signing a separate agreement for those subsequent accounts. As part of account opening, Clients will need to provide information about their financial situation and investment objectives so their IAR can assist in selecting an appropriate account type and determine the suitability of a particular Program. Clients will be asked to inform LPL of any changes to this information on at least a quarterly basis. 3  Clients may impose restrictions on investing in certain securities or groups of securities by contacting their IAR and providing the necessary instructions to the IAR or LPL, as applicable. Programs Below is an overview of each of the Programs covered by this Brochure. LPL holds a client’s securities for safekeeping (known as having “custody” of securities) for accounts in the SAM (with certain exceptions for specific security types), MWP, MS, OMP and GWP programs (the “Custodied Programs”), while IPA accounts are held at a third-party custodian. For a table comparing the investment discretion LPL, the IAR or others have for each Program, please see Item 16. Strategic Asset Management (SAM) Program In the SAM Program, clients typically authorize LPL, through their IAR, on a discretionary basis to purchase and sell permitted investments, to purchase and sell subaccounts within variable annuities, and to liquidate previously purchased investments, in each case pursuant to investment objectives chosen by you. Permitted investment types include no-load and load-waived mutual funds, UITs, closed-end funds, ETFs, equities, fixed income and certificates of deposit, hedge funds, managed futures, REITs, BDCs, structured products and options. Additional paperwork and approval are sometimes required to invest in certain products. Clients may, at any time after opening their SAM account, limit or revoke the discretion granted to their IAR. Clients can request information about changing the discretion granted over their SAM account from their IAR. Model Wealth Portfolios (MWP) Program The MWP Program is a unified managed account program in which LPL and its IARs provide ongoing investment advice and management. The IAR selects one or more model portfolios of securities designed by LPL’s Research department (“LPL Research”), a third-party investment strategist, the enterprise the IAR is associated with or a financial institution where the IAR offers advisory services (each, an "Institutional Strategist"), or IAR (each of the foregoing, an "MWP Portfolio Strategist") consistent with the client's stated investment objective. These portfolios can include mutual funds, ETFs, exchange-traded notes ("ETNs"), closed-end funds, equities, or fixed- income securities. The IAR provides ongoing advice on the selection or replacement of a portfolio(s) based on the client's individual needs. The IAR may choose more than one portfolio for a single MWP account. A model portfolio could be comprised of one or more underlying models. The MWP Program also permits clients to select a third-party investment advisor firm typically associated with an LPL registered representative, in lieu of an IAR, to provide the MWP Program services. The MWP Portfolio Strategist is responsible for selecting the securities within a portfolio and for making changes to the securities selected. Except for LPL, IAR, and certain Institutional Strategists, the MWP Portfolio Strategists are independent investment advisor firms either registered as investment advisers with the SEC or a state securities authority or exempt from registration. MWP Portfolio Strategists provide LPL on an ongoing basis with a model portfolio that includes recommended asset allocations and securities. LPL enters into an agreement with the MWP Portfolio Strategist for these portfolio services. Some third-party investment strategists have entered into subadvisory agreements with LPL to manage MWP accounts or portions of MWP accounts in the program allocated to their fixed-income model portfolios ("MWP Subadvisers"). If IAR, or a client, chooses to allocate all or a portion of an MWP account to a portfolio provided by an MWP Subadviser, LPL will delegate some of its responsibilities to the MWP Subadviser, subject at all times to oversight by LPL. LPL will remain responsible for all advisory services provided in the program. A client who wishes not to engage an MWP Subadviser will be required to select a different portfolio. If the client's IAR or the client choose to invest in a portfolio provided by an MWP Subadviser, they should carefully review the MWP 4  Subadviser's Form ADV Part 2 Brochure for information on the MWP Subadviser's investment strategies, risks, brokerage practices and conflicts of interest. LPL acts as the overlay portfolio manager in the MWP Program, responsible for implementing the portfolios, addressing account issues, coordinating trades, rebalancing MWP accounts to the allocations in the portfolio(s), and performing tax harvesting services. LPL reviews an account for rebalancing based on the frequency selected by the client at account opening or as altered by the client or the IAR from time to time. The choices for frequency of rebalancing review are quarterly (four times per year), semiannually (two times per year) or annually (once per year). An additional rebalance may be requested outside of the scheduled frequency once every 12 months. In addition, LPL reviews an MWP account for rebalancing if the MWP Portfolio Strategist changes the allocation targets. LPL accommodates reasonable requests to restrict holdings of specific securities, specific industries, specific sectors, and certain pre-defined categories (e.g., "sin" stocks). If client restrictions prevent investment in certain securities otherwise recommended by an MWP Portfolio Strategist, assets will be invested pro-rata across the remaining securities in the model. Such restrictions do not apply to any mutual funds, ETFs or fixed-income securities that are held in an MWP account. Restrictions placed on an MWP account can affect the performance of the MWP account. Tax Loss Harvesting and Tax Overlay Services. LPL, at the request of the IAR, performs tax harvesting, which may include using the proceeds of tax-related transactions to purchase appropriate securities (such as ETFs or mutual funds) for MWP accounts. Clients may also request that the IAR initiate tax harvesting with LPL. In such case, proceeds of tax-related transactions may be held in cash or securities until appropriate wash sale periods have expired, after which the related proceeds will be invested according to the current targeted allocation for the portfolio. Under certain conditions, LPL also will accommodate requests for all or a portion of an MWP account to remain allocated to cash for a period of time. In addition to general tax harvesting requests described above, clients may authorize LPL to provide more comprehensive tax overlay services (LPL Tax Overlay Services). If directed by client, LPL will provide LPL Tax Overlay Services to the client's MWP account. The end objective of LPL Tax Overlay Services is to improve the after-tax return for the client while staying consistent with the investment strategies of the portfolio(s). LPL Tax Overlay Services are available only to clients subject to U.S. capital gains taxes. LPL does not provide tax planning advice or services. LPL does not represent in any manner that the desired tax objectives will be obtained or that MWP's investment strategy will result in any particular tax outcome. Clients should review the LPL Tax Overlay Services fees described in Item 5 and discuss any questions with or request further information from their IAR or their tax consultant about using the LPL Tax Overlay Services. In some cases, clients may experience significant performance differences from, and returns that are lower than, the selected investment strategy for one or more portfolios and/or the overall MWP account, due to participation in LPL Tax Overlay Services. If a client chooses to participate in this service, LPL makes no assurances that the client's MWP account performance will be within any range of the selected investment strategy or the strategy's benchmark. Manager Select (MS) Program In the MS program, LPL, through its IARs, makes available to clients the investment advisory services and/or model portfolios of third-party portfolio management firms. Within the MS program, LPL offers two platform options – the Separately Managed Account Platform (the "MS SMA Platform") and the Model Portfolio Platform (the "MS Model Portfolio Platform" and collectively, the "MS Platforms"). 5  The IAR assists the client to: (i) determine the client's investment objectives and risk/return preferences; (ii) identify any investment restrictions on the management of the account; and (iii) select an investment strategy and SMA Portfolio Manager for any MS SMA Platform accounts or select a model portfolio provided by LPL Research or third-party investment advisors (Model Advisors) for MS Model Portfolio Platform accounts. The MS program also permits clients to select a third-party investment advisor firm typically associated with an LPL registered representative, in lieu of an LPL IAR to provide the MS advisory services. MS SMA Platform The IAR provides ongoing advice and monitoring of the SMA Portfolio Manager's services and serves as the point of contact between the client and the SMA Portfolio Manager about changes in the client's investment objective, financial situation, and investment restrictions. The SMA Portfolio Manager independently determines whether to accept the client’s account based on the client information provided to the SMA Manager by LPL or the IAR, suitability and other factors the SMA Portfolio Manager deems appropriate. The SMA Portfolio Manager has the sole authority to determine the securities to be purchased, sold, or exchanged and which portion, if any, of the assets shall be held uninvested. LPL and IAR do not play a role in the selection of particular securities to be purchased or sold. An SMA Portfolio Manager may hire one or more sub-advisors to manage all or a portion of a client's account. MS Model Portfolio Platform In the MS Model Portfolio Platform, the IAR provides the client with ongoing advice and monitoring relating to the client’s selected model portfolio, is available on an ongoing basis to receive deposit and withdrawal instructions, and to convey to LPL any changes in the client's financial circumstances, investment objectives or investment restrictions. Only one model portfolio is permitted in each MS account. LPL implements the model portfolio and accounts are expected to closely track the model portfolio because LPL makes modifications only to address particular model account issues, including tax loss harvesting, rebalancing, short-term gain avoidance, cash inflows and outflows, and tracking error from the model portfolio, and to ensure that investment restrictions are being followed. LPL accommodates reasonable requests to restrict holding certain equity securities, specific industries, specific sectors, or certain pre-defined categories (e.g., “sin” stocks).If client restrictions prevent investment in certain securities otherwise specified by an Asset Manager, assets generally will be invested pro rata across the remaining securities in the model portfolio (or as otherwise specified by the SMA Portfolio Manager, if in the SMA Platform). Such restrictions will not apply to any mutual funds, ETFs or fixed-income securities that may be held in an MS account. Restrictions placed on an MS Account can affect the performance of the MS account and that LPL may choose not to accept an MS account with restrictions that are inconsistent with its chosen investments or those specified by the Asset Manager. Tax Loss Harvesting. Pursuant to the Client Agreement, the client authorizes either SMA Portfolio Manager (in the case of the SMA Platform) or LPL (in the case of the Model Portfolio Platform), at the request of the client or IAR, to perform tax harvesting, which may include using the proceeds of tax-related transactions to purchase appropriate securities (such as ETFs) for an account. In such case, proceeds of tax-related transactions may be held in cash or securities until appropriate wash sale periods have expired. Once the wash sale period has expired, the related proceeds will be invested according to the current targeted allocation for the model portfolio. Similarly, the SMA Portfolio Manager or LPL may delay a tax harvesting request to sell securities acquired in the previous 30 days until the wash sale period has expired. In order to permit trading in a tax-efficient manner, Client further expressly grants SMA Portfolio Manager, or LPL or IAR, as applicable, the authority to select specific tax lots when liquidating securities within the Account. 6  Optimum Market Portfolios (OMP) Program The OMP Program is a professionally managed mutual fund asset allocation program. The IAR selects a model portfolio of mutual funds designed by LPL Research consistent with the client's stated investment objective and made up of mutual funds in the Optimum Funds mutual fund family. An OMP portfolio may include up to six Optimum Funds. The OMP Program also permits clients to select a third-party investment advisor firm typically associated with an LPL registered representative, in lieu of an IAR, to provide the advisory services described in this brochure. LPL rebalances OMP accounts based on the allocations in the OMP portfolio as described in the OMP section of Item 8. LPL reviews the account for rebalancing on the frequency selected by the client at OMP account opening or as altered by the IAR or the client from time to time, based on the anniversary date of account opening. The choices for frequency of rebalancing are quarterly (four times per year), semi-annually (two times per year) or annually (once per year). An additional rebalance may be requested outside of the scheduled frequency once every 12 months. In addition, LPL may review the OMP account for rebalancing if LPL Research changes the model portfolio. Although OMP accounts are not considered tax efficient or tax managed, LPL may delay placing transactions on non-retirement accounts by one day for any rebalancing scheduled to occur on the first one-year anniversary date of an OMP account opening in an attempt to limit the tax treatment of realized short-term gains for any position being sold. Guided Wealth Portfolios (GWP) Program The GWP Program offers clients the ability to participate in a centrally managed investment program of ETFs (and potentially in the future, mutual funds), which is made available to users and clients through LPL's Account View, a web-based, interactive account management portal and through IAR. Clients are required to maintain an active profile in Account View to participate in the GWP Program. The GWP Program generates investment recommendations based upon model portfolios constructed by LPL and selected for the account, utilizing one of three goals: Retirement, Major Purchase or General Investing (collectively, “Goals”). IAR is responsible on an ongoing basis as investment advisor and fiduciary for the client relationship, including for recommending the GWP Program to the client; providing ongoing monitoring of the GWP account and the services of LPL; determining initial and ongoing suitability of the GWP Program for clients; and being available to clients to discuss investment strategies, changes in financial circumstances, or objectives. IAR may also recommend other suitable investment programs or account types. LPL is responsible for the investment decisions in the GWP accounts. LPL will perform a daily review of GWP accounts to determine if rebalancing is appropriate based on tolerance thresholds established by LPL. The account will be rebalanced following a rebalancing review if the account has available cash for investment and at least one of the GWP account positions, including cash, is outside LPL's set tolerance thresholds, subject to a minimum transaction amount established by LPL. In addition, LPL may review the GWP account for rebalancing if a GWP model portfolio is changed. A preview of the GWP Program (the “Prospect Tool”) is provided to help someone determine whether they would like to open a GWP account. Users of the Prospect Tool are not considered to be advisory clients of LPL or the IAR and do not enter into a Client Agreement, do not receive ongoing investment advice or supervision of their assets, and do not receive any trading services by virtue of their use of the Prospect Tool. Alternatively, an IAR can directly open a GWP account for a client without requiring that a client first use the Prospect Tool. 7  Tax Loss Harvesting Pursuant to the Client Agreement, client authorizes LPL to perform tax harvesting based on the guidelines LPL establishes for the GWP Program, on a systematic and periodic basis. LPL will perform tax loss harvesting only when total GWP account unrealized losses and individual positions available losses each exceed thresholds set by LPL for the GWP Program. LPL will seek to re-invest proceeds from tax loss harvesting into a substitute security for the 30-day period from the initial sale of the harvested security but will hold such proceeds in cash if proceeds cannot be reinvested into a substitute security. In implementing the Investment Allocation Track or processing client requests, including withdrawal requests, LPL may determine the securities for liquidation based in-part on avoiding short-term gain realization. Non-Custodied Programs and Services Individual Participant Advice (IPA) Program Under the IPA program, LPL, through its IARs, provides management of a participant's self-directed retirement plan account maintained at a third-party custodian, if permitted by the participant's plan. In certain cases, LPL may also accommodate other account types on an exception basis. IAR will provide advice regarding securities made available as investment options through the plan or a self-directed brokerage account (or as otherwise available for IPA accounts enrolled on an exception basis). Any requests by clients to impose securities restrictions are governed by the custodians’ procedures. The IAR will not provide advice or recommendations regarding any retirement plan participant loans or hardships as part of the IPA Program, although IAR is available to provide general information and educational assistance to participants regarding these options as applicable. Financial Planning and Consulting IARs may, in their sole discretion and as agreed from time to time with clients, provide financial planning or financial consulting services to clients in connection with their Client Agreement at no additional cost. IARs may also require clients to enter into a separate agreement with an agreed upon fee for financial planning or financial consulting services. The scope and duration of financial planning and consulting services varies, will generally be agreed upon at the time the IAR provides the services, and may include comprehensive financial planning or consulting on a particular issue such as retirement planning, education planning, estate planning, cash flow/budget planning, risk management planning, personal wealth planning, tax planning, business planning, investment planning/asset allocation, or other planning as needed. Financial planning and consulting may or may not include a written, customized financial plan. Item 5: Fees and Compensation Types of Fees Clients pay LPL an annualized fee (Account Fee), comprised of an Advisory Fee, Manager Fee and Program Fee, as applicable, in addition to other fees described herein. SAM and OMP accounts are also subject to transaction charges, and all accounts are subject to certain other miscellaneous charges and fees, described in more detail below. LPL may waive any fee it charges to client or IAR in its sole discretion in whole or in part. All Programs: Advisory Fee Each Program charges clients an Advisory Fee for the investment advisory services of IAR, as well as the investment advisory, administrative, trading and custodial services of LPL for the Custodied Programs (other than with respect to the GWP Program, which charges a separate Program Fee as noted below for these services). The Advisory Fee is shared with the IAR (other than with respect to the GWP Program, where the IAR receives the entire Advisory Fee). The Advisory Fee is negotiable between the client and the IAR and is based 8  on the value of all assets in the account, including cash holdings, and is payable quarterly in advance (unless otherwise agreed for the IPA program only). Upon request, the Advisory Fee also can be structured on a tiered basis (for SAM, MWP, MS, OMP Programs only) and/or grouped basis (for SAM and MWP accounts only), with a reduced percentage rate based on reaching certain thresholds in the account or in a group of eligible advisory accounts. In SAM, MWP and MS only, LPL retains a portion of the Advisory Fee, up to 0.20% (SAM) or 0.35% (MWP or MS) of the value of the assets of an account, respectively, for its investment advisory, administrative, custody and clearing services. LPL shares up to 100% (typically between 90% to 100%, and typically between 85-100% for IPA) of the Advisory Fee (or remaining portion of the Advisory Fee for SAM, MWP and MS accounts) with the IAR based on the agreement between LPL and the IAR. For the avoidance of doubt, LPL retains any portion of the Advisory Fee not shared with the IAR. A portion of the fee that goes to the IAR may be paid by the IAR to his or her LPL branch manager or another LPL representative for supervision or administrative support. There is a conflict of interest when a branch manager receives a portion of the Account Fee for supervision because the fee affects his or her ability to provide objective supervision of the IAR. In SAM, a portion of the administrative fee may be shared with additional third parties for services, including the IAR’s employer. In SAM accounts with margin, margin interest is charged in addition to the Account Fee; the Account Fee is charged only on the net equity of the account. MWP and MS: Manager Fee The MWP and MS programs charge clients a Manager Fee for the services of MWP Portfolio Strategists and MWP Subadvisers, and for the services of MS SMA Portfolio Managers and MS Model Advisors, respectively (collectively, Asset Managers). LPL pays the applicable portion of the Manager Fee to the Asset Manager. For MS (which permits only a single model in an account), the Manager Fee is based on the value of all assets in the account, including cash holdings, and payable quarterly in advance. For MWP (which permits multiple models in a single account), a Manager Fee is based on the value of all assets in the applicable model, including cash holdings, and is paid quarterly in advance. The Manager Fee ranges from 0% to 0.60%. The amount of the Manager Fee will differ depending on the Asset Manager selected for the account, and the selected investment strategy or model portfolio. If the IAR changes the model(s) selected for an account, or if the model investment value changes, the overall Manager Fee may increase or decrease. For model portfolios in MWP and the MS Model Provider Platform, LPL charges up to 0.05% of account assets per year for the costs and services associated with effecting trades to implement the models, such as order formation, execution, settlement and sleeving of transactions. This LPL fee for trading services is reflected in the Manager Fee on client statements. Generally, LPL charges 0.05% of account assets per year for models transacting primarily in equities, and LPL charges 0.03% of model assets per year for models transacting primarily in fixed income or other over-the-counter securities. For certain model portfolios designed by LPL, LPL will pay up to 0.02% of the Manager Fee to market index providers as a licensing fee. Where LPL charges either a Manager Fee as an Asset Manager or a fee for trading services, there is a conflict of interest for LPL to recommend such models. When acting as Asset Manager, LPL does not charge the Manager Fee to retirement accounts; however, LPL charges the fee for trading services to retirement and nonretirement accounts to the extent permissible under applicable law. The IAR does not receive any portion of the Manager Fee, including based on recommending a model for which LPL retains this compensation. Clients can request information about model and fee rates from their IAR. Certain Asset Managers receive a reduced Manager Fee or do not receive a Manager Fee. This is often because the Asset Manager includes proprietary or affiliated mutual funds or ETFs in the model portfolio or investment strategy which charges a management fee. This management fee can be found in the prospectuses of the mutual 9  funds or exchange traded funds included in the model portfolio or investment strategy. Because an Asset Manager or their affiliates benefit financially when an affiliated fund is selected, there is a conflict of interest that affects the Asset Manager’s ability to provide unbiased, objective investment advice concerning the selection of funds for a model portfolio or investment strategy. The fees paid to Asset Managers are generally less than fees those advisors would charge a client seeking to establish a direct relationship with them outside of a wrap program. This is principally because LPL absorbs many of the billing, administrative, and marketing expenses that would otherwise be borne by those advisors, including trading expenses for model portfolios where the Asset Manager does not have trading discretion. Asset Managers generally have higher minimum account size requirements and fees for direct accounts because of such additional expenses. From time to time, LPL may make available model portfolios provided by Asset Managers with associated persons who are also associated persons of LPL; however, if a client selects one of these associated persons to act as IAR for their account, such Asset Manager will not receive a separate Manager Fee for its services as a model provider. GWP: Program Fee The GWP Program charges clients a separate Program Fee for the investment advisory, administrative, trading, custodial and clearing services of LPL, in lieu of covering those services under the Advisory Fee. The LPL Program Fee is based on the value of the assets in the account, including cash holdings, and is payable quarterly in advance. Fee Maximums Fee maximums vary by Program, as indicated below. LPL may increase upper limits on any fees upon 30 days' prior notice. Program Fee Maximum Advisory Fee Maximum Manager Fee Total Maximum Account Fee 2.5% N/A N/A 2.5% SAM 2.35% .60% N/A 2.95% MWP 2.5% N/A N/A 2.5% OMP 1.00% N/A .35% 1.35% GWP 2.35%* .60% N/A 2.95% MS 1.5% N/A N/A 1.5% IPA * Certain legacy Account Fees are higher, provided the combined Advisory Fee and Manager Fee does not exceed 2.95%. SAM and OMP: Transaction Charges For the SAM and OMP Programs, there is a per transaction charge in addition to the Account Fee. In the OMP Program, clients are charged $5.00 on each purchase and sale transaction. The transaction charge is identified 10  under the service charge column on trade confirmations and represents a payment for expenses associated with trade execution and processing, including for preparing, printing and/or delivering confirmations. Transaction charges are waived if eligible contributions, including transfers, wires, checks, ACH or journal, are made to the account within the previous 365 days. In the SAM Program, transaction charges vary by security type as set forth in the Miscellaneous Account and Service Fee Schedule - Advisory. The transaction charge may be higher or lower than commissions otherwise payable in the absence of the Account Fee. When an investment change is made to the account (e.g., for transactions resulting from contributions, rebalancing, model changes, and withdrawals), the transaction charge can represent a meaningful cost to the client, particularly at smaller account sizes. Transaction charges are paid to LPL to defray costs associated with trade execution; however, they are not directly related to transaction-related expenses of LPL and are a source of revenue to LPL. Transaction charges present conflicts of interest. For example, transaction charges in SAM vary depending on the type of security being purchased or sold (e.g., $7 for equities, $50 for fixed income), and therefore LPL earns more from transactions that result in an investment with a higher charge. In addition, where transaction charges apply, the more transactions a client enters into, the more compensation LPL receives. Engaging in frequent trading will result in the client paying more transaction charges and will increase the overall costs associated with the account. Transaction charges will not reduce the Account Fee clients pay. Transaction charges are not shared with IARs. In the case of mutual funds and ETFs in the SAM Program, the transaction charges vary depending on the fund purchased or sold. For more information, see the section of this Item 5 titled “Understanding SAM Transaction Charges and NTF Networks”. In the SAM Program, the IAR may also separately agree with clients to bear the transaction charges for purchases and sales of certain securities in the account. If the IAR pays the transaction charges in an account, there is a different conflict of interest than if the client pays the transaction charges. Clients should understand that the cost to the IAR of transaction charges will in certain instances be a factor that the IAR considers when deciding which securities to select and how frequently to place transactions in an account. For more information, see the section of this Item 5 titled “Understanding SAM Transaction Charges and NTF Networks” and the section of Item 12 titled “Brokerage Practices.” IPA: Transaction Charges A client’s custodian provides trade execution and may assess separate transaction charges, as outlined in the separate agreement with that custodian. Any transaction charges are not shared with LPL or the IAR. Miscellaneous Account and Service Fees For Custodied Programs, clients also pay LPL miscellaneous administrative or custodial-related fees and charges (including retirement account fees and termination fees), which are not directly based on the costs of the transaction or service, may include a profit to LPL, and may be lowered or waived for certain clients. A current list of these charges is available at lpl.com/disclosures.html. For the IPA Program, the custodian may assess separate transaction charges, as outlined in a separate agreement with that custodian, but these transaction charges are not shared with LPL or the IAR. In MWP, clients can elect to receive LPL tax overlay services (as described in Item 4 above), for which LPL charges 0.08% of the value of an MWP account, which it retains from the Advisory Fee. This charge will not be separately indicated on account statements or otherwise. When an IAR recommends discontinuing LPL tax overlay services, the IAR has a conflict of interest since discontinuing this service will increase the portion of the Advisory Fee paid to IAR or its financial institution or affiliate thereof. Clients will be notified when services are 11  discontinued, including a reminder to discuss whether a reduction of the Advisory Fee is appropriate. Clients should ask their IAR for additional information. How Fees are Calculated and Applied Custodied Programs LPL deducts the Account Fee and other fees and charges associated with a Program account from the account. LPL calculates and deducts the Account Fee in the method described in the applicable Client Agreement, unless other arrangements are made in writing. If a client wishes to be billed for the Account Fee, rather than a deduction directly from the account, the client needs to make a request to LPL through the IAR. Alternative payment methods that may be offered in other advisory platforms are not available in the GWP Program. Any different method of billing may result in additional charges to cover the administrative costs of billing. LPL deducts the Account Fee quarterly in advance. If the Client Agreement is terminated before the end of the quarterly period, LPL will pay the client a prorated refund of any pre-paid quarterly Account Fee based on the number of days remaining in the quarter after the termination date. However, if the account is closed within the first six months by the client or as a result of withdrawals that bring the account value below the required minimum, LPL reserves the right to retain the pre-paid quarterly Account Fee for the current quarter in order to cover the administrative costs of establishing the account (for example, the costs related to transferring positions in and out of the account, data entry in opening the account, reconciliation of positions in order to issue performance information, and re-registration of positions).LPL may waive any fee it charges to client or IAR in its sole discretion in whole or in part. The Account Fee for certain alternative investments (such as non-exchange traded REITs, BDCs or hedge funds, each a "Non-Traded Alternative Investment") is calculated based on unaudited net asset values provided as estimates by the sponsor of such investment (such unaudited net asset values, a "Fair Value"). Fair Values are provided by Non-Traded Alternative Investment sponsors on a reporting period basis, such as monthly or quarterly. LPL does not audit or confirm the accuracy of the Fair Values provided by such sponsors, and sponsors do not adjust previously determined Fair Values. The portion of the Account Fee calculated on a Non-Traded Alternative Investment reflects the Fair Value of the prior reporting period and will not reflect the current net asset value of such investment as of the date of the Account Fee's calculation. IPA In the IPA Program, the method of fee payment is typically determined by the custodian for the account since IARs utilize the custodian’s billing system. Clients with certain custodians may choose to pay the Advisory Fee directly (by check or by payment from another account at LPL). Other custodians may require the client to authorize and direct the custodian to deduct the Advisory Fee through a debit to the account. If the client pays the Advisory Fee directly, the Advisory Fee will be payable quarterly in arrears, and LPL will calculate the Advisory Fee based on the account value on the last day of the calendar quarter as provided in the client’s quarterly account statement. IAR will provide the client with an invoice prepared by LPL outlining calculation of the Advisory Fee. If the client authorizes the custodian to deduct the Advisory Fee from the account, either LPL or the custodian will calculate the Advisory Fee in advance or arrears and at such frequency as determined by the custodian’s billing practices. If LPL calculates the Advisory Fee, the client authorizes LPL to instruct the custodian to deduct this amount from the account. There will be no separate invoice submitted to the client for the Advisory Fee in cases where it is deducted by the custodian. The amount of the Advisory Fee deducted typically will be reflected on the account statement provided by the custodian. Clients should confirm with the custodian whether the fee will be shown as a deduction from the account on account statements. 12  Fees Charged by Third Parties There are other fees and charges that are imposed by third parties other than LPL that apply to investments in Program accounts. Some of these fees and charges are described below. If a client's assets are invested in mutual funds, ETFs or other pooled investment products, clients should be aware that there will be two layers of advisory fees and expenses for those assets. As a shareholder of a fund, clients will pay an advisory fee to the fund manager and other expenses charged by the fund. In the case of mutual funds that are funds of funds, there could be an additional layer of fees, including performance fees that vary depending on the performance of the fund. Clients will also pay LPL and IAR the Account Fee with respect to assets invested in mutual funds, ETFs and other pooled products. The mutual funds, ETFs and other pooled funds available in any Program can be purchased directly outside of the Program. Therefore, clients could generally avoid an additional layer of fees by not using the advisory services of LPL and IAR and by making their own decisions regarding the investment. Clients should understand that in many cases the mutual funds and mutual fund share classes offered through the Programs charge higher fees and expenses than those that are not offered through the Programs, and such other mutual funds and share classes may be equally or more appropriate for a client's account(s). As discussed below, a portion of the Account Fee and expenses charged by certain mutual funds in the Programs will be paid to LPL. Other financial services firms, including those LPL makes available through its third-party asset management programs, may offer the same mutual funds that are offered through the Programs but at lower overall costs to investors than the costs that clients incur by investing through the Programs. The share class offered for a particular mutual fund available through the Programs (the "Program Share Class") may charge higher fees and expenses than other share classes that are offered by the same fund but are not available through the Program. Program Share Classes are selected by LPL, in certain cases, because the mutual funds pay to LPL a portion of the fees and expenses charged by Program Share Classes as compensation for the administrative and recordkeeping services LPL provides with respect to LPL clients who invest in the Program Share Classes, as discussed below under "Participation or Interest in Client Transactions" in Item 11. Program Shares are no-load or load-waived share classes and therefore not subject to any upfront sales charge. Share classes previously available in a Program prior to November 21, 2016, such as Class A Shares that are subject to 12b-1 fees, can still be held but not purchased in the Program (Non-Surviving Share Classes). A client also may transfer Non-Surviving Share Classes into client’s account. If the account is invested in a mutual fund that charges a fee if a redemption is made within a specific time period after the investment under a fund’s frequent trading policy, client will also be charged a redemption fee. If a mutual fund has a frequent trading policy, the policy can limit a client’s transactions in shares of the fund (e.g., for rebalancing, liquidations, deposits or tax harvesting). Decisions regarding the sale of mutual funds in an account may be made by LPL without regard to whether a client will be assessed a redemption fee. If a client holds a variable annuity as part of a Program account, there are mortality, expense and administrative charges, subaccount management fees, fees for additional riders on the contract and charges for excessive transfers within a calendar year imposed by the variable annuity sponsor. If a client holds a REIT or BDC as part of an account, there are dealer management fees and other organizational, offering and pricing expenses imposed by the REIT or BDC, as applicable. If client holds a UIT in an account, UIT sponsors charge creation and development fees or similar fees. Further information regarding fees assessed by a mutual fund, variable annuity, alternative investment (such as a REIT, BDC or hedge fund) or UIT is available in the appropriate prospectus or offering document, which is available upon request from the IAR or from the product sponsor directly. Clients also incur charges imposed by third parties or LPL for investments made through their Program accounts, including, but not limited to, taxes and charges required by law or imposed by exchanges or regulatory bodies. For example, an industry-wide charge mandated by a regulator applies to sales of certain securities. The amount of this regulatory fee may vary over time, and because variations might not be immediately known to LPL, the amount may be estimated and assessed in advance. To the extent that such estimated amount differs from the 13  actual amount of the regulatory fee, LPL retains the excess. These charges will be reflected on transaction confirmations and/or periodic statements. Other Important Information Funding an Account Ineligible Securities. When transferring securities into an account, certain securities may not be eligible for the account. In such case, the securities may be rejected, sold after the transfer, or moved to a brokerage account. Ineligible securities may be sold without regard to whether a client will be assessed any redemption or other fees. Clients should not transfer securities that they do not wish to be sold. Note that when an ineligible security is transferred into an Account and subsequently sold or moved to a brokerage account, the advisory fee will be charged on such asset for the period of time the security was held in the account. Surrender Charges or CDSCs. If client transfers a previously purchased investment into an account, such as a mutual fund, annuity or alternative investment, or liquidates the previously purchased investment and transfers the proceeds into an account, client may be charged a fee (sometimes called a "surrender charge," "contingent deferred sales charge" or "CDSC") upon the sale or redemption in accordance with the investment product's prospectus. In many cases, the CDSC is only charged if a client does not hold the security for a minimum period of time. In particular, if a client transfers a previously purchased mutual fund (such as a Class C share) into an account that is subject to a CDSC, then the client will pay that charge when the mutual fund is sold. If the account is invested in a mutual fund that charges a fee if a redemption is made within a specific time period after the investment, client will be charged a redemption fee. If a mutual fund has a frequent trading policy, the policy can limit a client's transactions in shares of the fund (e.g., for rebalancing, liquidations, deposits or tax harvesting). Previously Paid Commissions. Clients should be aware that securities transferred into an account may have been subject to a commission or sales load when the security was originally purchased If client has paid a commission on the purchase of a security in an LPL brokerage account within up to two years of the transfer of the security into the account, client may be entitled to a credit for a portion of the Account Fee. After the transfer into an account, an advisory fee will be charged based on the total assets in the account, including the transferred security. Depending on the share class and fee structure of the previously purchased mutual fund, LPL can receive fees such as 12b-1 fees, recordkeeping fees and revenue sharing from the previously purchased mutual fund until the position is liquidated and subsequently invested. If the client paid IAR or another financial professional recently an upfront commission on the previously purchased security, the client will be paying a new ongoing advisory fee going forward to IAR for advice on that same security. Loss of Benefits. If clients will be funding the account with the proceeds of a sale or liquidation of an annuity, clients should understand that they may be giving up guaranteed living or death benefits that were provided through the annuity, and will not be provided through an account. When transferring securities into an account, clients should consider and speak to IAR about whether: • A CDSC will apply, and the length of time before the CDSC expires; • There will be a loss of a guaranteed benefit, in the case of an annuity; • A commission was previously paid on the security; • Client wishes for the security to be managed as part of the account and be subject to an advisory fee; or, • Client wishes to hold the security in a brokerage account that is not managed and not subject to an advisory fee. 14  Trading Away in MWP and MS As described below in Item 12, if an MWP Subadviser or MS SMA Portfolio Manager chooses to execute a transaction through a broker-dealer other than LPL, the execution price to the client may include a commission, markup/markdown, or other fee imposed by the executing broker-dealer in addition to the Account Fee. If client holds an American Depositary Receipt (ADR) in an account, there can be custodial fees or taxes related to the ADR. Impact of Fees In a SAM account, the Account Fee is an ongoing fee for investment advisory services of LPL and the IAR and other administrative and custodial services of LPL. In the IPA Program, the Advisory Fee is for the investment advisory and other administrative services of the IAR and LPL. The MWP, MS, OMP and GWP Programs are wrap fee programs, meaning that there is one bundled fee for investment advisory services, the execution of transactions and other administrative and custodial services. The Account Fee for Program accounts may cost the client more than purchasing the program services separately, for example, paying an advisory fee plus commissions or transaction charges to a broker-dealer for each transaction in the account. Factors that bear upon the cost of the account in relation to the cost of the same services purchased separately include the: • Type and size of the account; • Types of securities in the account; • Historical and or expected size or number of trades for the account; and, • Number and range of supplementary advisory and client-related services provided to the client. Clients participating in the SAM and OMP Programs do not pay IAR commissions on transactions but do pay LPL transaction charges. Transaction charges for the securities purchased and sold in an account may also cost the client more than purchasing services in a wrap fee program. As with any fee, transaction charges reduce the overall amount of the client's investment portfolio. The Account Fee may cost the client more than if assets were held in a traditional brokerage account. In a brokerage account, a client pays the brokerage representative a commission for each transaction, and the representative has no duty to provide ongoing advice with respect to the account. If the client plans to follow a buy and hold strategy for the account or does not wish to purchase ongoing investment advice or management services, the client should consider opening a brokerage account rather than an advisory account. In addition, LPL may only offer certain products in an advisory account, even though there is a version of the product or a similar product that may be lower cost and could be available in a brokerage account, and vice versa. LPL offers certain alternative products, including certain non-traded alternative investments, in certain accounts offering solely brokerage services and in certain accounts offering solely investment advisory services. This means that clients can only purchase those investments by paying a commission or other brokerage fee in the case of a brokerage account or advisory fee in the case of an advisory account. Depending on the length of time that a client holds such an investment, it may cost more to pay the commission than it would if the investment was available in a SAM account and the client paid the annual Account Fee on the investment. The Account Fee may be higher than the fees charged by other investment advisors for similar services. This is the case in particular if the Account Fee is at or near the maximum Account Fee set out above. The IAR is responsible for determining the Account Fee each client is charged based on factors such as total amount of assets involved in the relationship and the complexity, number and range of supplementary advisory and client- related services to be provided to the account. Clients should consider the level and complexity of the advisory services to be provided when negotiating the Account Fee with IAR. 15  Clients should consider the impact of fees and expenses on their investment portfolio, as described in the informational brochure titled "How Fees and Expenses Affect Your Portfolio" on lpl.com/disclosures.html under "Regulatory Educational Resources." Understanding SAM Transaction Charges and NTF Networks Clients, when participating in the SAM Program, should understand that LPL charges clients a transaction charge of $0, $4.50 or $26.50 for mutual fund purchases and redemptions. The applicable transaction charge varies depending on the amount of recordkeeping fees that LPL receives from the mutual fund and/or whether the sponsor of the mutual fund participates in LPL’s Mutual Fund No Transaction Fee Network (“MF NTF Network”) described below. When a mutual fund participating in the MF NTF Network is purchased in an account, the mutual fund’s sponsor directs a payment to LPL on behalf and for the benefit of the client that is used exclusively as a credit to defray the bona fide transaction charge obligations of the client’s account. When a participating mutual fund is sold in an account, LPL waives the transaction charge. Clients also should be aware that mutual funds participating in the MF NTF Network typically have higher ongoing internal expenses that can be used to offset payments made by sponsors for transaction charge waivers, and this can reduce the investment returns over time relative to other share classes of the same fund. The Program also offers an ETF No Transaction Fee Network (“ETF NTF Network”). LPL typically charges a transaction charge of $9 for transactions in ETFs, however, for certain ETFs in the ETF NTF Network, the ETF sponsors direct a payment to LPL on behalf and for the benefit of client that is used as a credit to defray all or a portion of the bona fide transaction charge obligations of the account. To the extent the sponsor does not pay the entire transaction charge amount, LPL waives the remaining portion to bring the cost to client to $0. For purchases of other ETFs in the ETF NTF Network in the Program, the sponsor pays LPL a flat annual amount and/or a fee based on the non-retirement client account assets invested in ETF NTF Network funds, and LPL waives the transaction charge. In the case of certain of these fee arrangements, the sponsor pays LPL a combination of a flat fee and asset-based fee for ETFs. The asset-based fee paid to LPL for certain ETFs will be higher based on the ETF’s expense ratio. These arrangements present a conflict of interest because LPL has an incentive to select more expensive ETFs. In addition, as described in more detail below in Item 8, LPL Research provides asset allocation model portfolios for IARs to use with clients. Certain of these model portfolios include ETFs participating in the ETF NTF Network that are more expensive and pay more fees to LPL. However, these conflicts are mitigated insofar as the sponsor fees are not shared with the IAR who selects the ETFs for client. For further details and an updated list of ETF sponsors for the ETF NTF Network, please refer to the Disclosures page on lpl.com/disclosures.html. The ETF NTF Network creates a conflict of interest because IAR has a financial incentive to select ETFs participating in the ETF NTF Network to avoid paying the transaction charges. Clients should consider such conflict when monitoring the purchase of ETFs in recognition of the overall fee and other arrangements with LPL and IAR for management of the account. This conflict can cause clients to pay higher overall fees and expenses and have an impact on the investment performance of the account. In particular, clients should be aware that participating ETFs typically have higher ongoing internal expenses than other ETFs that can be used to offset payments made by sponsors for transaction charge waivers. To the extent that LPL receives from a sponsor of an ETF participating in the ETF NTF Network a flat fee or an asset-based fee that exceeds bona fide transaction charge obligations of the participating client accounts, the payment creates a conflict of interest as further described below as revenue sharing. When an IAR agrees to bear transaction charges on behalf of a client and a participating mutual fund or ETF is purchased in the account, the mutual fund or ETF sponsor defrays all or a portion of the transaction charge otherwise borne by the IAR, and LPL waives the remaining amount of the transaction charge. For all ERISA 16  accounts for which an IAR agrees to bear transaction costs on behalf of a client, LPL waives the transaction charge to the IAR when a participating mutual fund or ETF is purchased or sold. Custodied Programs: Mutual Fund 12b-1 Fees; Recordkeeping Services and Compensation; Revenue Sharing Arrangements; Other Product Related Compensation Some mutual funds and Program Share Classes in the Programs charge shareholders a 12b-1 fee. To the extent a mutual fund or a Program Share Class charges a 12b-1 fee, the fee will be paid to LPL by the mutual fund. Any 12b-1 fees paid to LPL by mutual funds (other than the Sweep Funds) that are held in Program accounts will be credited to the account. LPL credits to clients any 12b-1 fees it receives from mutual funds, and therefore, LPL does not have an incentive to select one fund or Program Share Class over another solely on the basis of the 12b-1 fee. LPL does not share 12b-1 fees, recordkeeping fees or revenue sharing payments with IARs, and, therefore, there is no financial incentive for an IAR to select one fund or a Program Share Class over another comparable fund or share class on the basis of the 12b-1 fee, recordkeeping compensation and revenue sharing payments that the fund or Program Share Class charges or provides to LPL. Although LPL does not share recordkeeping fees or revenue sharing payments with IARs, such fees and payments will increase LPL's profits and indirectly benefit IARs, for example by increasing the value of equity awards from LPL's parent company to IARs or by being used by LPL to support marketing or training costs. LPL performs recordkeeping, administrative and shareholder services on behalf of mutual funds and receives compensation for the services based on mutual fund holdings of Program clients. These services include establishing and maintaining accounts with the funds, facilitating settlement of funds, responding to customer inquiries and requests, and maintaining sub-account records reflecting the issuance, exchange or redemption of shares by the Program account. A type of recordkeeping service that LPL provides to certain mutual fund families is to process transactions on an omnibus basis, which means that LPL consolidates client trades into one daily trade with a fund, and maintains all pertinent shareholder information for the fund. In some cases, LPL earns recordkeeping compensation with respect to a Program Share Class but does not earn recordkeeping compensation, or earns less recordkeeping compensation, with respect to other share classes of the same fund that are not offered through the Program. The compensation LPL receives from a fund for recordkeeping, administrative and shareholder services is based on the amount of Program client assets that are invested in the fund (up to 0.30% annually), or the number of positions held by Program clients in the fund (up to $25 per position). If LPL does not provide omnibus services to a mutual fund, then fund shares are traded on a networked basis, which means LPL submits a separate trade for each individual client trade to the fund. In that case, LPL maintains only certain elements of the fund's shareholder information. In addition, LPL charges a setup fee to product sponsors when adding new investment products, share classes of an investment product, or model portfolios to LPL's investment platforms. Asset Managers pay LPL initial diligence and setup fees of up to $5,000 per strategy or model portfolio and up to a yearly $5,000 per strategy fee for annual due diligence reviews and maintenance to make their services available. In the case of exchange traded products, LPL receives up to $15,000 as a sponsor level due diligence fee, up to $7,500 per fund and up to $15,000 per product for complex ETPs. In the case of mutual funds, LPL receives a one-time set up fee of up to $15,000 as a sponsor level due diligence fee and a setup fee of $7,500 per fund. In the case of UITs, LPL charges up to $5,000 per trust. In the case of annuities, LPL typically receives a one-time onboarding/networking setup fee of up to $100,000 from the annuity product sponsor to reimburse LPL for associated technology-related costs. In the case of alternative investments, LPL receives up to $35,000 for initial products, and up to $15,000 for follow-on product offerings or additional share classes. LPL also receives a one-time payment of up to $25,000 from certain alternative investment sponsors for training and education and other benefits such as prominent placement of sponsor logos, website links or content on materials disseminated to LPL's IARs and priority access to education programs and events and conference speaking opportunities. LPL does not share this compensation with its IARs. 17  When LPL incurs technology development related costs associated with the launch or maintenance of a platform, tool or service, LPL sometimes receives reimbursements from product sponsors for such costs. Because LPL benefits from product sponsors' reimbursements of technology development-related costs, LPL's financial interests are conflicted with its ability to use strictly objective factors when selecting product sponsors to make available on the applicable platforms. LPL has fee arrangements with investment advisors or distributors ("sponsors") of mutual funds, ETFs, annuities, alternative investment products and structured products that are available for purchase through the Programs, called revenue sharing. Under these arrangements, the sponsor pays LPL a fee (typically quarterly) based on the amount of client sales or assets invested in the sponsor's products and/or a fixed fee, and LPL provides marketing support, data analytics, and administrative services to the sponsor and allows the sponsor to access LPL IARs so that the sponsor can promote such products. The amount and form of revenue sharing fee received by LPL can vary depending on many factors, including the services provided by LPL and the sponsor's investment products. LPL marketing support compensation for mutual funds, interval funds, ETFs and positional money market funds (other than the Sweep Funds) consists of flat and asset-based fees totaling up to 0.15% annually of LPL clients' investments in the investment product, or up to $1,000,000. For alternative investments, the maximum revenue sharing fee received by LPL under these arrangements is up to 0.35% on assets or 1.50% on new sales. Certain sponsors of alternative investments are not required to pay such fees. For annuities, the maximum revenue sharing fee received by LPL under these arrangements is up to 0.25% of assets or up to 0.50% of new sales. LPL does not require that a sponsor participate in revenue sharing arrangements for the sponsor's products to be selected for a model portfolio. However, LPL has a financial incentive to recommend participating products instead of those whose sponsors do not make such payments to LPL. In general, sponsors pay LPL a revenue sharing fee in addition to other product-related fees paid by a client, which include sales charges, deferred sales charges, distribution and service fees, redemption fees, and other fees and expenses disclosed in a product's offering documents. Revenue sharing fees may be paid by a particular investment fund, or its investment advisor or distributor, or an affiliate. LPL accepts revenue sharing fees for assets held in retirement accounts to the extent permitted by applicable law, including ERISA. LPL offers product sponsors of mutual funds, closed funds, interval funds, ETFs, alternative investments, advisory strategies, annuities, and life insurance contracts the opportunity to purchase analytical data, business intelligence and ad hoc reporting. This information helps product sponsors in their sales, distribution and product development efforts with respect to customers and clients. LPL receives up to $600,000 annually from each product sponsor in third-party compensation for this information. Revenue sharing payments are generally higher for investment products with higher expense ratios (the overall fee paid by an investor in the product). Additionally, revenue sharing payments for some ETFs are based on management fees and will be higher for ETFs with higher expense ratios, both because LPL is paid a portion of the higher fees and because generally the percentage rate that LPL gets paid increases for investment products with higher expense ratios. As a result, LPL has an increased incentive to choose investment products that charge more in fees and to promote or recommend these investment products so that LPL earns more, and that could cause lower performance for client accounts. Other investment products with lower fees that are not party to revenue sharing agreements are available. Higher expense ratios will cause an investor to earn less on an investment than a comparable investment with a lower expense ratio. The variations between amounts and forms of revenue sharing payments also create an incentive for LPL to recommend holding products which pay revenue sharing payments to LPL or its affiliate as an ongoing percentage of client assets. LPL receives significantly more revenue sharing from firms for which clients have the largest holdings, and some of LPL's contracts pay increased asset-based fees when certain thresholds are met. This creates a conflict of interest for LPL to promote and recommend those investments. However, these conflicts are mitigated insofar as the revenue sharing payments LPL receives are not shared with the IAR who selects or recommends the investment products for client accounts. 18  LPL has network fee arrangements with sponsors of fee-based variable annuities, pursuant to which LPL receives compensation based on the number of LPL customer positions held with the variable annuity sponsor (up to $6.00 per position per year). LPL does not share this compensation with its IARs. From time to time, LPL receives a reallowance of the public offering price per unit on units of certain UITs and structured products sold by LPL during the initial offering period. LPL's receipt of 12b-1 fees, recordkeeping compensation and revenue sharing arrangements presents conflicts of interest that affect LPL's ability to provide clients with unbiased, objective investment advice concerning the selection of products and share classes for a model portfolio in the case of model portfolios designed by LPL. In particular, LPL has a financial incentive: (i) to select a product or a Program Share Class that charges a 12b-1 fee and/or pays recordkeeping compensation to LPL over another comparable fund or a share class that does not charge 12b-1 fees or pay recordkeeping compensation; (ii) to select a product sponsored by a company that makes revenue sharing payments to LPL, instead of another comparable product whose sponsor does not make such payments; and (iii) to select a product or a Program Share Class that charges 12b-1 fees, pays recordkeeping compensation to LPL, or whose sponsor makes revenue sharing payments to LPL that, in each case, are comparatively higher than those charged or paid by another comparable product or share class or a sponsor of such products or share classes. Such other comparable products and/or share classes may be more appropriate for a client than the product or Program Share Class offered through the Program. LPL's website at lpl.com/disclosures.html identifies the mutual funds that pay recordkeeping compensation and the sponsors that make revenue sharing payments to LPL. LPL provides investment consulting services to the investment advisor of the Optimum Funds mutual fund family. These services include assisting the investment advisor in determining whether to engage, maintain or terminate sub-advisors for the Optimum Funds. As compensation for these services, LPL receives an investment consulting fee of up to 0.22% of fund assets from the investment advisor to the Optimum Funds. The receipt of this investment consulting compensation by LPL presents a conflict of interest, because LPL has a financial benefit if an Optimum Fund is purchased in an account. This fee is not shared with LPL IARs. In addition, a senior executive officer of LPL serves as a Trustee of the Optimum Funds. LPL receives a fee from the issuers of structured products for administrative services and related support LPL provides in connection with the structuring and distribution of these products. This fee can be up to 0.75% of the principal amount of a trade and generally varies among products according to the complexity of the structuring. This fee creates a conflict of interest because LPL has an incentive to recommend structured products over other products that do not pay LPL a similar fee. This conflict is mitigated insofar as the amount LPL receives is consistent for similar types of structured products across different product issuers and is not shared with its IARs. Clients should review the product offering documents for additional details. Item 6: Performance-Based Fees and Side-by-Side Management This Item is not applicable. Neither LPL nor its IARs, nor any Asset Manager, receive performance-based fees in connection with the Programs described in this Brochure. Accordingly, LPL does not engage in side-by-side management involving performance-based compensation. Item 7: Types of Clients The SAM, MWP, MS, OMP, and IPA Programs are available for individuals, IRAs, banks, thrift institutions, credit unions, pension and profit-sharing plans, including ERISA plans, trusts, estates, charitable organizations, state and municipal government entities, corporations and other business entities. The GWP Program is available for individuals (individually or jointly with another person) and their traditional IRAs, Roth IRAs, and owner-only Simplified Employer Pension IRAs where the only eligible participants of the SEP IRA are the business owners and their spouses. ERISA plans (including SEP IRAs for employees other than business owners and their spouses) are not eligible to participate in the GWP Program. 19  Minimum investment requirements vary by Program and are set forth in the applicable Client Agreement. LPL may, at its discretion, waive any minimum for any Program. Clients should consult with their IARs for more information on the investment minimums for their Program(s). An account will generally not be invested if the minimum is not reached. As of the date of this Brochure, investment minimums are as follows: Program Minimum Investment SAM A minimum account value of $10,000 is generally required. MWP The minimum account value varies depending on the model portfolio(s) selected and the account’s allocation amongst model portfolios. The lowest minimum for a model portfolio is $10,000. MS A minimum account value of $25,000 is generally required. OMP A minimum account value of $1,000 is generally required, but eligible contributions within the previous 365 days, including transfers, wires, checks, ACH or journal, are required for account sizes below $10,000. GWP A minimum account value of $5,000 is generally required. IPA The minimum account value and other eligibility requirements to participate in the IPA Program are generally determined by the third-party custodian. LPL does not require a minimum asset amount for financial planning and consulting services, participant consulting or research services. Item 8: Methods of Analysis, Investment Strategies and Risk of Loss Investing in securities involves risk of loss, including the potential loss of principal. Clients should be prepared to bear such risks. LPL and its IARs use various methods of analysis and investment strategies in providing advisory services, as described below. The material risks associated with these methods and strategies are also described below. Strategic Asset Management (SAM) Program In the SAM Program, the IAR managing the account chooses his/her own research methods, investment strategy and management philosophy. IARs can recommend many different types of securities, including mutual funds, UITs, closed end funds, ETFs, ETNs, variable annuity subaccounts, equities, fixed income securities, interval funds, options, hedge funds, managed futures, BDCs, private equity, REITs, and structured products. LPL determines the types of investments that are eligible to be purchased in SAM accounts. Clients should contact the IAR managing his/her accounts for additional information on the IAR’s particular investment strategy. An IAR may also use a combination of investment strategies. The IAR has access to various research reports, including those provided by LPL Research, to which he/she may refer when determining which securities to purchase or sell. LPL Research makes available recommendations regarding asset allocation, mutual funds, model portfolios, and variable annuity subaccounts. IARs may or may not follow these recommendations in managing SAM accounts. LPL Research also constructs asset allocation model portfolios and provides recommendations on the funds to populate the model portfolios. In constructing these models, LPL Research uses the following investment strategies: Diversified and Alternative Strategy. Although these descriptions are written in terms of individual equities and/or bonds, they include mutual funds or ETFs whose portfolios consist of the type of equities or bonds referenced. 20  • Diversified. The Diversified investment strategy seeks to promote capital appreciation while taking a reasonable amount of risk to achieve that goal. The strategy is subject to minimal constraints, which allows for a relatively pure implementation of LPL Research’s recommendations. In general, Diversified portfolios should be considered by investors seeking investments in primarily stocks and bonds, along with the occasional non-traditional asset class to take advantage of potential market opportunities. Diversified portfolios will hold primarily traditional asset classes. Secondarily, if a non-traditional asset class represents the investment that provides the best means of taking advantage of a market opportunity, it will be included in the recommendation. The non-traditional investments included in Diversified portfolios are more standard, such as conservative balanced strategies. Diversified portfolios tend to be steady in their number of positions. These portfolios tend to remain consistently diversified. • Alternative Strategy. The Alternative Strategy investment strategy seeks to promote capital appreciation while taking a reasonable amount of risk to achieve that goal. Unlike the Diversified investment strategy which may have an allocation to alternative strategy or non-traditional assets classes, this portfolio typically has an allocation to non-traditional asset classes. This strategy extends the diversification beyond the core style box asset classes into strategies with lower correlation to stocks and bonds to lower risk, as defined by standard deviation and maximum drawdown (peak to trough loss), while attempting to maintain long-term performance similar to other portfolios in the same investment objective. For each of the above investment strategies, LPL Research recommends a strategic or tactical version. • Strategic. Strategic portfolios typically have a three- to five-year time horizon. The allocations within these portfolios are intended to help take advantage of market opportunities LPL Research believes will occur or persist throughout that time frame. Although LPL Research recommends investments through a three- to five-year lens, LPL Research may recommend that these portfolios be traded for fine tuning throughout the year. For clients who take a longer-term view or are more tax sensitive, a strategic implementation may be more appropriate. • Tactical. Tactical portfolios are more flexible and are designed to help take advantage of short-, mid-, and long-term opportunities the markets present. LPL Research recommends that these portfolios invest in opportunities for as short as one week and as long as five years. Due to the tactical nature, the trading is notably more frequent than strategic portfolios. Tactically managed portfolios should be considered by clients who wish to take advantage of shorter-term market opportunities that may arise and are not opposed to the prospect of more frequent trading. An IAR sometimes engages LPL's research department ("LPL Research") to provide investment management services jointly to clients. In those arrangements, LPL Research will exercise discretionary investment and trading authority over the account following the client's investment objectives. Model Wealth Portfolios (MWP) Program In MWP, LPL and IAR are responsible for the overall investment advice and management services offered to clients, and the client selects the IAR who manages the account. LPL makes available model portfolios designed by LPL, third-party MWP Portfolio Strategists, including MWP Subadvisers, Institutional Strategists and the applicable IAR. LPL reviews MWP Portfolio Strategists on a periodic basis. In addition, LPL selects and reviews on a periodic basis the third-party MWP Portfolio Strategists available. A third-party MWP Portfolio Strategist may provide services to LPL and the MWP Program as an MWP Subadviser. In addition to deciding on the securities and asset allocation for a portfolio, MWP Subadvisers are responsible for determining when and how to execute transactions and selecting broker-dealers through which to execute transactions. LPL uses information provided by the third-party MWP Portfolio Strategist and also may use 21  independent, third-party data sources when evaluating such MWP Portfolio Strategist. Third-party MWP Portfolio Strategist performance information is not calculated on a uniform and consistent basis. LPL does not review performance information to determine or verify its accuracy and does not calculate third-party MWP Portfolio Strategist performance. However, LPL provides clients with individual account performance information. Client performance information is compiled by LPL using third-party portfolio accounting and reporting software. Client performance information is calculated on a uniform and consistent basis using a time-weighted basis. Performance information is intended to inform clients as to how their investments have performed for a period, both on an absolute basis and compared to investment indices. It is important to note that, except for MWP Subadvisers, third-party MWP Portfolio Strategists provide the portfolios to LPL, and it is LPL that has discretion for trade implementation and execution in MWP accounts. Therefore, portfolios submitted to LPL by third-party MWP Portfolio Strategists may represent activity that has already been implemented on behalf of other clients of such MWP Portfolio Strategists. Because of this fact and because LPL (and not the third-party MWP Portfolio Strategist) has discretionary authority to implement trades, performance of an MWP account will differ from the performance of such MWP Portfolio Strategist’s discretionary accounts. LPL as a Portfolio Strategist In MWP, clients can invest in portfolios designed by LPL Research. LPL Research designs many types of mutual fund, ETF, fixed income and equity portfolios to meet the varying needs of clients. LPL Research designs different types of portfolios for different timeframes, needs or themes that have meaning to investors. LPL Research generally designates portfolios as either strategic or tactical model styles. The allocations in strategic portfolios are intended to help take advantage of market opportunities LPL Research believes will occur or persist throughout a 3-to-5-year timeframe and are intended for investors who take a longer-term view or who are more tax sensitive. Tactical portfolios are more flexible and are designed to help take advantage of short, mid-, and long-term opportunities the markets present and are intended for clients who wish to take advantage of shorter- term market opportunities and are not opposed to the prospect of more frequent trading. Within the strategic and tactical model styles, LPL Research focuses each model on an investment theme or objective. For example, LPL Research designs alpha-focused portfolios that are structured for more aggressive investors. There are also downside risk aware portfolios that are intended to be structured more conservatively to help provide more protection in the event of a down market. LPL Research designs portfolios that are largely allocated to alternative strategies to provide diversified exposure to those more esoteric asset classes. LPL Research also designs portfolios intended for investors who place a priority on income generation and portfolios for investors seeking to minimize tax impacts. Such income generation portfolios are also available in investment objectives that are not typically focused on income. Additionally, LPL Research designs portfolios intended for investors who want to invest primarily with certain mutual fund or ETF families. There are also portfolios that emphasize socially responsible investing and sustainability. LPL Research also designs portfolios that follow a “direct indexing” strategy, or a strategy that seeks to replicate a market index by directly holding the individual securities, or a representative sample of the individual securities, that make up the market index. In a direct indexing strategy, LPL Research partners with an index provider to license an index and pays a portion of the Manager Fee to the index provider. For a complete list of the current models provided by LPL Research, clients should discuss with their IAR. The participation of LPL Research as an MWP Portfolio Strategist gives rise to conflicts of interest. For certain LPL Research model portfolios, LPL charges clients a Manager Fee. However, LPL will not charge this fee to retirement accounts. In addition, LPL has a financial incentive to select its internal team and further grow its assets under management, in part because as assets under management at LPL increase, LPL is able to achieve 22  greater efficiencies and economies of scale with regards to the research and management services that it provides to clients. However, the selection of LPL Research model portfolios has no impact on the IAR’s compensation and/or employment status, and the IAR may only recommend a model portfolio that they believe is appropriate for the client and in the client’s best interest. Institutional Strategist or IAR as MWP Portfolio Strategist In addition to portfolios designed by LPL Research and third-party Portfolio Strategists, clients can invest in portfolios managed by their Institutional Strategist or IAR. The Institutional Strategist or IAR is responsible for selecting the mutual funds, ETFs, ETNs, closed-end funds, equities or fixed-income securities within a portfolio, the asset allocation for the portfolio, and for making changes to the securities selected and asset allocation over time. The Institutional Strategist or IAR will typically manage portfolios tailored to an investment theme or particular style that is core to the Institutional Strategist or IAR’s beliefs and expertise. Each Institutional Strategist or IAR chooses their own research methods, investment strategy and management philosophy. The Institutional Strategist or IAR has access to various research reports, including those provided by LPL Research, to which they may refer in determining which securities to purchase or sell. As overlay portfolio manager, LPL has discretion to buy and sell securities in the account (according to the portfolio selected) and to liquidate previously purchased securities that are transferred into the account. LPL expects to closely track the portfolios, applying discretion only to address particular account issues, including tax rebalancing, loss harvesting, tracking error from the portfolio, customized requests, and investment restrictions placed on the account. LPL may also apply discretion to deviate from the model portfolios in accounts, in which it is not possible or impractical to be invested in all of a model’s holdings, for example in smaller accounts. Manager Select (MS) Program In the MS Program, LPL and IAR are responsible for the investment advisory services related to the selection and availability of the Asset Managers for the MS SMA Platform and MS Model MS Model Provider Platform, respectively. LPL makes available the advisory services of SMA Portfolio Managers. LPL does not act as a portfolio manager for the MS SMA Platform. LPL does, however, act as portfolio manager for the MS Model Provider Platform. Criteria for Participating and Recommended Asset Managers LPL selects and reviews Asset Managers for the MS Platforms based on quantitative, qualitative and infrastructure criteria, which include the criteria listed below. LPL evaluates quantitative criteria, including but not limited to rate of return, number of employees and accounts, years in the business and assets under management. LPL evaluates qualitative criteria, including but not limited to investment philosophy, risk controls and legal and compliance considerations. LPL reviews infrastructure criteria to assess whether an Asset Manager can handle operational requirements, including but not limited to composite calculation methodology, trade rotation policy, back office review, client servicing resources and firm- wide program commitment. Additional Criteria for Recommended Asset Managers Asset Managers that are “Recommended” by LPL Research are subject to a more rigorous selection and review process than the criteria set out above that applies to all Asset Managers available in the program. In addition to the criteria noted above, additional evaluation criteria for Recommended Asset Managers: 23  • Sound investment philosophy and process that drives performance • Consistency of returns and risk • Qualitative assessment of the investment manager and team Clients should speak to the IAR regarding whether the Asset Manager being considered for selection or that has been selected by the client is Recommended or Participating. LPL as a Model Advisor Clients may invest in model portfolios designed by LPL Research on the MS Model Provider Platform. LPL Research designs different types of model portfolios to meet different investor needs. LPL Research model portfolios are built by seeking certain quantitative characteristics for each portfolio using a rules-based, disciplined process for security selection and portfolio construction. LPL Research looks for specific characteristics or investment factors and designs a model portfolio to capture the investment results of that characteristic or factor. For example, one such model portfolio seeks to have index-like representation to reasonably track large cap index returns such as the Russell 1000 Index, while another focuses on dividends by seeking a yield premium over the index. The LPL Research model portfolios are managed tactically, which means they are flexible and are designed to help take advantage of short-, mid-, and long-term opportunities the markets present and are intended for clients who wish to take advantage of shorter-term market opportunities and are not opposed to the prospect of trading as frequently as monthly. The participation of LPL Research as a Model Advisor on the MS Model Provider Platform gives rise to conflicts of interest similar to those described above for LPL Research as an MWP Portfolio Strategist in MWP. For certain model portfolios, LPL charges clients a Manager Fee; however, LPL will not charge this fee to retirement accounts. The selection of LPL Research model portfolios has no impact on the IAR’s compensation and/or employment status, and the IAR may only recommend a model portfolio that they believe is appropriate for the client and in the client’s best interest. Removal of an Asset Manager LPL may elect to remove or replace an Asset Manager should it determine that the firm has failed to meet one or more of the above selection criteria or if the Asset Manager has failed to maintain sufficient assets under management at LPL to maintain profitability on the MS SMA Platform. In making a decision to remove or replace an Asset Manager, LPL takes into consideration all criteria; no single criterion, other than the maintenance of assets under management at LPL, is necessarily determinant in the decision. Short-term developments are monitored but are not necessarily sufficient for a decision to remove or replace an Asset Manager. While LPL would have the authority to remove the LPL Research Department as an Asset Manager, it is unlikely to do so. Asset Manager Performance LPL Research uses information provided by an Asset Manager and may also use independent, third-party databases when evaluating an Asset Manager. For an Asset Manager to be selected for the Platforms, LPL generally requires a third-party verification letter related to compliance of the firm’s performance information with Global Investment Performance Standards (“GIPS”) or a similar letter indicating that the performance information has been audited by an independent auditor. This requirement may be waived by LPL for various reasons including alternative methods of verifying the experience and/or performance of the Asset Manager. Asset Manager performance information is not calculated on a uniform and consistent basis. 24  LPL does not calculate the performance record of a third-party Asset Manager. However, LPL provides clients with individual performance information. Performance information distributed by LPL is compiled using third party portfolio accounting and reporting software. Client performance is reported on a time weighted basis. Performance reports are intended to inform clients as to how their investments have performed for a period, both on an absolute basis and compared to leading investment indices. It is important to note that third-party Asset Managers provide model portfolios to LPL, and it is LPL that has discretion for trade implementation and execution in MS Model Provider Platform accounts. Therefore, model portfolios submitted to LPL by third-party Asset Managers represent activity that has already been implemented on behalf of other clients of such Asset Managers. Because of this fact and because LPL (and not the third-party Asset Manager) has discretionary authority to implement trades, performance of an MS Model Provider Platform account will differ from and may be worse than the performance of such Asset Manager’s discretionary accounts. Investment Strategies Asset Managers provide advisory services based on the following types of investment strategies. All Cap Core Global Equity Large Cap Value Small Cap Blend All Cap Growth Growth Equity Mid Cap Core Small Cap Growth All Cap Value Income Preferred Mid Cap Growth Small Cap Value Balanced Large Cap Core Mid Cap Value Tax Free Fixed Income Convertibles Large Cap Foreign REIT Taxable Fixed Income Global Balanced Large Cap Growth Sector Optimum Market Portfolios (OMP) Program In OMP, clients invest in portfolios designed by LPL Research. LPL Research designs different types of model portfolios for OMP to meet the varying needs of clients. The IAR selects the portfolio and provides advice based on the client’s individual needs. LPL receives a portion of the Account Fee for the portfolio design services of LPL Research. LPL and its IARs do not accept performance-based fees under OMP. LPL Research uses the following investment strategies in designing portfolios. Each of these investment strategies seek to generate capital appreciation while assuming a reasonable amount of risk. • Standard. These portfolios invest in up to six Optimum Funds across the following asset classes: large growth, large value, small/mid growth, small/mid value, international, and fixed income. • U.S. These portfolios invest in up to five Optimum Funds across the following asset classes: large growth, large value, small/mid growth, small/mid value, and fixed income. These portfolios do not invest in international. • Growth Tilt. These portfolios invest in up to six Optimum Funds across the following asset classes: large growth, large value, small/mid growth, small/mid value, international, and fixed income. These portfolios are over-weighted to growth relative to the standard models. • Value Tilt. These portfolios invest in up to six Optimum Funds across the following asset classes: large growth, large value, small/mid growth, small/mid value, international, and fixed income. These portfolios are over-weighted to value relative to the standard models. 25  For Standard and U.S. portfolios described above, LPL Research makes available a strategic or tactical version for each portfolio. The strategic portfolios are intended to take advantage of market opportunities that will occur or persist over a three-to-five-year time frame. The tactically managed model portfolios are intended to take advantage of short-, medium-, or long-term opportunities. In addition, for the Standard Portfolios there are two different versions of the tactically managed portfolios: Traditional Standard and Spectrum Standard. The asset allocation of the Traditional Standard Portfolios is set primarily leveraging the LPL Research macroeconomic views. The asset allocation of the Spectrum Standard Portfolios is set primarily leveraging the LPL Research diligence views. Guided Wealth Portfolios (GWP) Program LPL makes available GWP model portfolios designed by LPL in GWP. LPL as a GWP Portfolio Strategist In GWP, clients invest in GWP model portfolios designed by LPL Research. Based upon a client’s risk tolerance, the client is assigned an investment allocation track (currently conservative, moderate, or aggressive) for a Retirement Goal or a Major Purchase Goal, the purpose of which is to slowly rotate the client’s equity exposure allocation to fixed income exposure and cash over time. LPL Research created these tracks using academic research on optimal retirement allocations, the industry averages as calculated by Morningstar for the target date fund universe, and input from other third parties. The Retirement Goal and the Major Purchase Goal are only appropriate for investors with medium- to long-term investment horizons, before such investors plan to access assets that are invested pursuant to the GWP Program. If investors need access to the assets in their accounts at any point prior to the end of the investment horizon, the prices at which these assets are liquidated may cause them to experience a material loss and will negatively compromise the ability of LPL to help them meet their investing goals. Within the applicable allocation track and based upon either a client’s chosen Retirement Age or the desired date of a major purchase, as applicable, the client will be assigned a GWP model portfolio and one of five of LPL’s standard investment objectives: • • Income with capital preservation. Designed as a longer-term accumulation account, this investment objective is considered generally the most conservative. Emphasis is placed on generation of current income with minimal risk of capital loss. Lowering the risk generally means lowering the potential income and overall return. Income with moderate growth. This investment objective emphasizes generation of current income with a secondary focus on moderate capital growth. • Growth with income. This investment objective emphasizes modest capital growth with some focus on generation of current income. • Growth. This investment objective emphasizes achieving high long-term growth and capital appreciation. There is little focus on generation of current income. • Aggressive growth. This investment objective emphasizes aggressive growth and maximum capital appreciation, with no focus on generation of current income. This objective has a high level of risk and is for investors with a longer timer horizon. For the General Investing Goal, the client is assigned one of the Investment Allocation Tracks (currently, conservative, moderate conservative, moderate, moderate aggressive or aggressive) and a GWP model portfolio based upon the client’s risk. In the General Investing Goal, the client’s asset allocations generally remain static, subject to rebalancing and tax loss harvesting as described below. 26  LPL Research does not charge a Manager Fee for its GWP model portfolios. IAR and clients cannot change or customize the GWP model portfolios. IPA The IAR has access to various LPL and third-party research reports and model portfolios to which they may refer in determining investment advice to clients. The IAR chooses his or her own research methods, investment style and management philosophy. Types of Investments and Risks Depending on the type of service being provided, LPL, third-party Asset Managers and IARs can recommend different types of securities, including mutual funds, UITs, closed end funds, interval funds, ETFs, collective investment trusts, variable annuity or variable universal life insurance subaccounts, equities, fixed income securities, options, hedge funds, managed futures, and structured products. Described below are some risks associated with investing and with some types of investments that an IAR can recommend depending on the service provided. Market Risk. This is the risk that the value of securities owned by an investor may go up or down, sometimes rapidly or unpredictably, due to factors affecting securities markets generally or particular industries. Interest Rate Risk. This is the risk that fixed income securities will decline in value because of an increase in interest rates; a bond or a fixed income fund with a longer duration will be more sensitive to changes in interest rates than a bond or bond fund with a shorter duration. Economic Conditions Risk. This is the risk that economic, political, or financial developments will, from time to time, result in periods of volatility or other adverse effects that could negatively impact the client’s account. Credit Risk. This is the risk that an investor could lose money if the issuer or guarantor of a fixed income security is unable or unwilling to meet its financial obligations. Liquidity Risk. This is the risk that an investor would not be able to sell or redeem an investment quickly or would not be able to sell or redeem an investment quickly without significantly affecting the price. Liquidity risk is heightened when markets are distressed. Generally, alternative investments have higher liquidity risk than equities, fixed income securities or mutual funds or ETFs. Specific Risk. This is the risk that the value of an individual security or particular type of security can be Issuer more volatile than the market as a whole and can perform differently from the value of the market as a whole. - Investment Company Risk. To the extent an account invests in ETFs or other investment companies, its performance will be affected by the performance of those other investment companies. Investments in ETFs and other investment companies are subject to the risks of the investment companies’ investments, as well as to the investment companies’ expenses. If an account invests in other investment companies, the account may receive distributions of taxable gains from portfolio transactions by that investment company and may recognize taxable gains from transactions in shares of that investment company, which would be taxable when distributed. Concentration Risk. To the extent an account concentrates its investments by investing a significant portion of its assets in the securities of a single issuer, industry, sector, country or region, the overall adverse impact on the client of adverse developments in the business of such issuer, such industry or such government could be considerably greater than if they did not concentrate their investments to such an extent. 27  - sectors. An individual sector, industry, or sub - - sectors of the Sector Risk. To the extent an account invests more heavily in particular sectors, industries, or sub market, its performance will be especially sensitive to developments that significantly affect those sectors, industries, or sub sector of the market may be more volatile, and may perform differently, than the broader market. The several industries that constitute a sector may all react in the same way to economic, political or regulatory events. An account’s performance could be affected if the sectors, industries, or sub sectors do not perform as expected. Alternatively, the lack of exposure to one or more sectors or industries may adversely affect performance. - Equity Securities. Common and preferred stock represents the equity ownership of a company. Stock markets are volatile and the price of equity securities fluctuates based on changes in a company’s financial condition and overall market and economic conditions. The value of equity securities may also decline due to factors that affect particular industries or particular issuers. The values of equity securities may be more volatile than those of other asset classes. Debt Securities. Debt securities, such as bonds, involve interest rate risk, credit risk, extension risk, prepayment risk, and other types of risks. In addition, the value of debt securities may fluctuate in response to market movements or issues that affect particular industries or issuers. When interest rates fall, the issuers of debt securities may prepay principal more quickly than expected, and investors may have to reinvest the proceeds at a lower interest rate. This is known as “prepayment risk.” When interest rates rise, debt securities may be repaid more slowly than expected, and the value of the debt security can fall sharply. This is known as “extension risk.” Certain types of debt securities may be subject to “call and redemption risk,” which is the risk that the issuer may call a bond for redemption before it matures and the investor may lose income. Foreign Securities Risk. Foreign investments involve special risks not present in U.S. investments that increase an investor’s potential to lose money. Among other issues, custody of securities in foreign markets, changes in foreign currency exchange rates, foreign economic and market conditions, actions adverse to investors taken by foreign governments, lack of governmental oversight or regulation of securities markets, underdeveloped settlement and clearing services, and foreign withholding taxes may negatively affect the value of investments in foreign securities. Alternative Strategy Mutual Funds. Certain mutual funds available in the Programs invest primarily in alternative investments and/or strategies. Investing in alternative investments and/or strategies may not be appropriate for all investors and involves special risks, such as risks associated with commodities, real estate, leverage, selling securities short, the use of derivatives, potential adverse market forces, regulatory changes and potential illiquidity. Clients should be aware that alternative investments and/or strategies are generally considered speculative in nature and involve a high degree of risk, particularly if concentrating investments. There are special risks associated with mutual funds that invest principally in real estate securities, such as sensitivity to changes in real estate values and interest rates and price volatility because of the fund’s concentration in the real estate industry. These types of funds tend to have higher expense ratios than more traditional mutual funds. They also tend to be newer and have less of a track record or performance history. Closed-End/Interval Funds. Clients should be aware that closed-end funds available within the Programs may not give investors the right to redeem their shares, and a secondary market may not exist. Therefore, clients may be unable to liquidate all or a portion of their shares in these types of funds. While the fund may from time to time offer to repurchase shares, it is not obligated to do so (unless it has been structured as an "interval fund"). In the case of interval funds, the fund will provide limited liquidity to shareholders by offering to repurchase a limited amount of shares on a periodic basis, but there is no guarantee that clients will be able to sell all of the shares in any particular repurchase offer. In some cases, there may be an additional cost to investors who redeem before holding shares for a specified amount of time. The repurchase offer program may be suspended under certain circumstances. 28  ETFs. ETFs are typically investment companies that are legally classified as open-end mutual funds or UITs. However, they differ from traditional mutual funds, in particular, in that ETF shares are listed on a securities exchange. Shares can be bought and sold throughout the trading day like shares of other publicly-traded companies. ETF shares may trade at a discount or premium to their net asset value. This difference between the bid price and the ask price is often referred to as the “spread.” The spread varies over time based on the ETF’s trading volume and market liquidity, and is generally lower if the ETF has a lot of trading volume and market liquidity and higher if the ETF has little trading volume and market liquidity. Although many ETFs are registered as an investment company under the Investment Company Act of 1940 like traditional mutual funds, some ETFs, in particular those that invest in commodities, are not registered as an investment company. ETFs may be closed and liquidated at the discretion of the issuing company. Unit Investment Trusts (UITs). UITs are investment companies that generally offer a fixed portfolio of stocks and bonds as redeemable units to investors for a specified period of time. Like a mutual fund, UITs typically issue redeemable units. However, UITs differ from mutual funds in that UITs have stated expiration dates and are not actively traded. As a consequence, UITs will not be sold to take advantage of market conditions and their value may fluctuate, sometimes rapidly or unpredictably, due to factors affecting securities markets or particular industries. Upon the stated expiration date of a UIT, there is no assurance that the value of the UIT will be equal to or higher than the original price. ETNs. An ETN is a senior unsecured debt obligation designed to track the total return of an underlying market index or other benchmark. ETNs may be linked to a variety of assets, for example, commodity futures, foreign currency and equities. ETNs are similar to ETFs in that they are listed on an exchange and can typically be bought or sold throughout the trading day. However, an ETN is not a mutual fund and does not have a net asset value; the ETN trades at the prevailing market price. Some of the more common risks of an ETN are as follows. The repayment of the principal, interest (if any), and the payment of any returns at maturity or upon redemption are dependent upon the ETN issuer’s ability to pay. In addition, the trading price of the ETN in the secondary market may be adversely impacted if the issuer’s credit rating is downgraded. The index or asset class for performance replication in an ETN may or may not be concentrated in a specific sector, asset class or country and may therefore carry specific risks. ETNs may be closed and liquidated at the discretion of the issuing company. Leveraged and Inverse ETFs, ETNs and Mutual Funds. Leveraged ETFs, ETNs and mutual funds, sometimes labeled “ultra” or “2x” for example, are designed to provide a multiple of the underlying index's return, typically on a daily basis. Inverse products are designed to provide the opposite of the return of the underlying index, typically on a daily basis. These products are different from and can be riskier than traditional ETFs, ETNs and mutual funds. Although these products are designed to provide returns that generally correspond to the underlying index, they may not be able to exactly replicate the performance of the index because of fund expenses and other factors. This is referred to as tracking error. Continual re-setting of returns within the product may add to the underlying costs and increase the tracking error. As a result, this may prevent these products from achieving their investment objective. In addition, compounding of the returns can produce a divergence from the underlying index over time, in particular for leveraged products. In highly volatile markets with large positive and negative swings, return distortions may be magnified over time. Some deviations from the stated objectives, to the positive or negative, are possible and may or may not correct themselves over time. To accomplish their objectives, these products use a range of strategies, including swaps, futures contracts and other derivatives. These products may not be diversified and can be based on commodities or currencies. These products may have higher expense ratios and be less tax-efficient than more traditional ETFs, ETNs and mutual funds. 29  Tax-Managed Investing Risk. Investment strategies that seek to enhance after-tax performance might be unable to fully realize strategic gains or harvest losses due to various factors. Market conditions could limit the ability to generate tax losses. A tax-managed strategy could cause a client portfolio to hold a security to achieve more favorable tax treatment or to sell a security to create tax losses. A tax loss realized by a U.S. investor after selling a security will be negated if the investor purchases the security within thirty days. There is no guarantee that securities submitted for exchange will be accepted by a fund that utilizes a tax-managed strategy (e.g., an “exchange fund”), and exchange funds may accept “out-of-benchmark” securities at the sole discretion of portfolio managers. Although third-party managers of these strategies seek to avoid “wash sales” whenever possible and temporarily restrict securities they have sold at a loss to prevent them, a wash sale can occur inadvertently because of trading by a client in portfolios not managed by the third-party manager. A wash sale can also be triggered by the third-party manager when it has sold a security for loss harvesting and shortly thereafter the firm is directed by the client to invest a substantial amount of cash resulting in a repurchase of the security. Changes to the tax code and other policy changes could result in unfavorable tax treatment for investors in tax-managed strategies. Options. Option trading is permitted in the SAM and MWP Programs. Clients should be aware that the use of options involves additional risks. The risks of covered call writing include the potential for the market to rise sharply. In such case, the security may be called away and the Program account will no longer hold the security. When purchasing options there is the risk that the entire premium paid (the purchase price) for the option can be lost if the option is not exercised or otherwise sold prior to the option’s expiration date. When selling (or “writing”) options, the risk of loss can be much greater if the options are written uncovered (“naked”). The risk of loss can far exceed the amount of the premium received for an uncovered option and in the case of an uncovered call option the potential loss is unlimited. Direct Indexing. Direct indexing strategies seek to replicate the performance of a market index by directly holding the individual securities, or a representative sample of the individual securities, that make up the index. Direct indexing may provide a more tax efficient means of investing, and may allow for more customized investment allocations, than investing in a fund or other commingled product that seeks to replicate the index. The potential benefits of direct indexing, however, will not necessarily be realized if the client does not take advantage of tax planning or impose account restrictions, such as account level security or sector-based restrictions or customizations based on the client’s specific tax, ESG or other preferences. Fees and expenses for the direct indexing strategy in some cases will be higher than the fees and expenses associated with alternative index products. Higher fees and expenses could adversely impact account performance. The size of the account and the number of securities in the index the account seeks to replicate also limit the ability of the account to replicate the index. As a result, the direct indexing strategy introduces the risk of tracking error relative to the index into the account and can cause the portfolio to underperform the index, including as a result of customization. LPL cannot guarantee that the dividend yield in the client’s portfolio will accurately track a market index. Other Complex Exchange Traded Products (ETPs). Certain clients meeting qualification standards may also purchase other complex ETPs, which may be structured as ETFs, ETNs or as other types of securities. Similar to leveraged and inverse products, these other complex products differ, often significantly, from traditional ETFs, ETNs and mutual funds and can be significantly more speculative and volatile. Other complex ETPs are often not designed to be held long term. These products include, for example, single-inverse ETPs, futures-linked ETPs, cryptocurrency-related ETPs, leveraged ETPs and buffered ETPs. Single inverse ETPs are complex financial instruments that seek investment results that are the opposite of the performance of an index for a stated trading period (or “reset frequency”), often a single day. When a single inverse ETP with a shorter reset frequency is held for a longer period, significantly different returns from the investment objective or returns of the underlying assets may result, including potential realized and unrealized losses. A single inverse ETP that resets each day is typically inappropriate as an intermediate or long-term investment unless it is recommended as part 30  of a sophisticated trading or hedging strategy that will be closely monitored. Futures-linked ETPs are intended to provide exposure to reference assets like commodities. However, futures-linked ETPs are not designed to track the spot price of the referenced asset, but instead track the price of futures contracts. The performance of a futures-linked ETP may deviate significantly from the performance of the spot price of the reference asset, especially over longer periods. Cryptocurrency ETPs are exposed to cryptocurrency, decentralized digitized assets that often rely on blockchain technology. Cryptocurrency ETPs are highly speculative and extremely volatile. Cryptocurrency is part of a new and evolving industry, and neither the technology nor regulatory regime for cryptocurrency is settled. Cryptocurrency ETPs may trade in over-the-counter markets and may not be afforded all of the investor protections of other exchange-traded products. Certain futures-linked ETPs invest in cryptocurrency futures, which could magnify the risks described above. Buffered ETPs are complex products which use derivatives to seek to provide a “buffer” against downside losses while capping upside gains. There is no guarantee that buffered ETPs will achieve the intended result. Buffered ETFs engage in frequent trading, which leads to higher fees. Complex ETPs can amplify market risks. Structured Products. Structured products are securities derived from another asset, such as a security or a basket of securities, an index, a commodity, a debt issuance, or a foreign currency. Structured products frequently limit the upside participation in the reference asset. Structured products are senior unsecured debt of the issuing bank and subject to the credit risk associated with that issuer. This credit risk exists whether or not the investment held in the account offers principal protection. The creditworthiness of the issuer does not affect or enhance the likely performance of the investment other than the ability of the issuer to meet its obligations. Any payments due at maturity are dependent on the issuer’s ability to pay. In addition, the trading price of the security in the secondary market, if there is one, may be adversely impacted if the issuer’s credit rating is downgraded. Some structured products offer full protection of the principal invested, others offer only partial or no protection. Investors may be sacrificing a higher yield to obtain the principal guarantee. In addition, the principal guarantee relates to nominal principal and does not offer inflation protection. An investor in a structured product never has a claim on the underlying investment, whether a security, zero coupon bond, or option. There may be little or no secondary market for the securities and information regarding independent market pricing for the securities may be limited. This is true even if the product has a ticker symbol or has been approved for listing on an exchange. Tax treatment of structured products may be different from other investments held in the account (e.g., income may be taxed as ordinary income even though payment is not received until maturity). Structured CDs that are insured by the FDIC are subject to applicable FDIC limits. High-Yield Debt. High-yield debt is issued by companies or municipalities that do not qualify for “investment grade” ratings by one or more rating agencies. The “below investment grade” designation is based on the rating agency’s opinion of an issuer that it has a greater risk to repay both principal and interest and a greater risk of default than those issuers rated investment grade. High yield debt carries greater risk than investment grade debt. There is the risk that the potential deterioration of an issuer’s financial health and subsequent downgrade in its rating will result in a decline in market value or default. Because of the potential inability of an issuer to make interest and principal payments, an investor may receive back less than originally invested. There is also the risk that the bond’s market value will decline as interest rates rise and that an investor will not be able to liquidate a bond before maturity. Hedge Funds and Non-Traded Managed Futures. Hedge funds and non-traded managed futures funds are available to clients meeting certain qualification standards. Investing in these securities involves additional risks including, but not limited to, the risk of investment loss due to the use of leveraging and other speculative investment practices, currency and interest rate risk, lack of liquidity and performance volatility. In some cases, there may be an additional cost to investors who redeem before holding shares for a specified amount of time. In addition, these securities may not be required to provide periodic pricing or valuation information to investors and may involve complex tax structures and delays in distributing important tax information. Clients should be 31  aware that these securities may not be liquid as there is no secondary trading market available. At the absolute discretion of the issuer of the security, there may be certain repurchase offers made from time to time. However, there is no guarantee that client will be able to redeem the security during the repurchase offer. Issuers typically accept redemption requests only periodically (monthly or quarterly), and often have the discretion to suspend redemptions in times of market stress. Even after a redemption request is accepted, the redemption proceeds may not be available for a significant period of time following the effective date of the redemption. A portion of the redemption proceeds may also be withheld to account for potential future adjustments to the valuation of the security. Funds of hedge funds are pooled investments in several hedge funds. Expenses in funds of hedge funds are typically higher than mutual funds. Because they may invest in a number of private hedge funds, funds of funds also bear a part of the fees and expenses of those underlying hedge funds. Business Development Companies (BDCs). BDCs are types of closed-end investment companies, which are available to clients meeting certain qualification standards. Generally, BDCs invest primarily in the debt and equity of private and/or small U.S. companies and may offer distribution rates generated through potentially significant credit and liquidity risk exposures amplified through leverage. As with other high-yield investments, such as floating-rate/leveraged loan funds, private REITs and limited partnerships, investors are exposed to significant market, credit, interest rate and liquidity risks. In addition, BDCs run the risk of over-leveraging their relatively illiquid portfolios. Due to the illiquid nature of non-traded BDCs, investors’ exit opportunities may be limited only to periodic share repurchases by the BDC. A tender offer pursuant to a share redemption program may be oversubscribed so that the BDC accepts only a pro rata portion of the shares a client tenders during a redemption program. In such cases, a client may experience significant delays (including indefinite delays) to exit from the investment. In addition, share redemption programs may be shut down at any time at the discretion of the issuer’s board. Also, BDCs may fund distributions from offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to make investments. In some cases, there may be an additional cost to investors who redeem before holding the shares for a specified number of years. REITs. REITs invest in real estate, and there are special risks associated with investing in real estate, including, but not limited to, sensitivity to changes in real estate values, the risk of investment loss due to the use of leveraging and other speculative investment practices, interest rate risk, lack of liquidity and performance volatility. Non-Traded REITs are not required to provide annual valuations until two years and 150 days after reaching the minimum capital raise required to begin purchasing properties. This threshold is generally outlined in the product’s prospectus. Non-Traded REITs, which are available to clients meeting certain qualification standards, may fund distributions from offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to invest in new assets. Clients should be aware that these securities may not be liquid as there is no secondary trading market available. At the absolute discretion of the issuer of the security, there may be certain repurchase offers made from time to time. However, there is no guarantee that client will be able to redeem the security during the repurchase offer. Issuers may repurchase shares at a price below net asset value. The repurchase program may also be suspended under certain circumstances. Private Equity Funds. Private equity investments are speculative and involve significant risks. It is possible that investors may lose some or all of their investment. The risks associated with private equity include: limited diversification, the use of leverage, and limited liquidity. The investment timeline for private equity can be a decade or more. Some issuers or general partners may penalize limited partners who redeem before holding units for a specified amount of time, or may disallow redemptions entirely. Non-traded Products. Non-traded products do not trade on a securities exchange and are not publicly traded. Consequently, non-traded products can be riskier than products that are publicly traded because the product cannot be sold readily in a market by the investor. The non-traded product may offer to redeem shares from 32  investors, but such share redemptions are typically subject to limitations. Share redemptions may also require that shares be redeemed at a discount and there is no guarantee that client will be able to redeem the security during the repurchase offer. In addition, non-traded products may lack share value transparency because there is no market price readily available. Without share value transparency, investors may not be able to assess the value or performance of the non-traded product. Margin Accounts. Clients should be aware that margin borrowing involves additional risks. Margin borrowing will result in increased gain if the value of the securities in the account goes up, but will result in increased losses if the value of the securities in the account goes down. LPL, acting as the client’s creditor, will have the authority to liquidate all or part of the account to repay any portion of the margin loan, even if the timing would be disadvantageous to the client. For performance illustration purposes, the margin interest charge will be treated as a withdrawal and will, therefore, not negatively impact performance reports. Collateralized Lending Program. LPL allows clients to pledge securities in their accounts as collateral for non- purpose lines of credit through its collateralized lending program, in each case subject to certain terms and conditions. The collateralized lending program includes LPL’s Secured Credit Account (“SCA”) product, offered by LPL Financial LLC, as well as lending options through third-party banks with which LPL has partnered to facilitate clients’ access to credit (“partner banks”) and other banks (“non-partner banks”). Clients are not required to use the SCA product or partner banks in LPL’s program, and can work directly with non-partner banks to negotiate loan terms or obtain other financing arrangements. Clients who choose to use non-partner banks should notify their IARs of the amount of the line of credit. Loans through the collateralized lending program may be used by clients only for purposes other than buying, trading or carrying securities. For the SCA product, clients borrow directly from LPL and pay interest to LPL. For lines of credit obtained through partner or non-partner banks, clients borrow from the bank and pay interest to the bank. In some cases, an IAR will recommend that a client seeking to access funds (for purposes other than purchasing securities) hold his securities investments and instead utilize a non-purpose line of credit collateralized by the assets in his advisory account. Unless an IAR specifically recommends that a client hold his securities investments and instead utilize a collateralized line of credit to access funds, the decision regarding whether to arrange for a collateralized loan and the decision to draw down on such a loan are not covered by a client’s advisory relationship with LPL or his IAR. While an IAR may assist the client with facilitating a line of credit, clients are responsible for independently evaluating the terms of the loan and deciding whether the loan meets their needs. There are risks, costs and conflicts of interest associated with the collateralized lending program and securities-based borrowing generally. The holder of the loan, whether that be LPL or a bank, may require clients to provide additional funds or collateral to secure the loan (referred to as a “maintenance call”) and has the authority to liquidate all or part of the securities at any time in accordance with the terms of the lending arrangement. As a practical matter, this may cause clients to be required to contribute cash to the account or to sell assets and realize losses in a declining market. Maintenance calls can result in the loss of more funds than the pledged assets. The risk of a maintenance call is heightened when clients hold concentrated positions in their pledged account(s). Clients are not entitled to choose which securities are liquidated or sold to meet a maintenance call, and clients are not entitled to an extension of time on a maintenance call. The lender may change maintenance requirements at any time. If the sale of assets does not fully satisfy the maintenance call, clients are responsible for the shortfall. A forced liquidation may interfere with a client’s long-term investment goals and/or result in adverse tax consequences. For an SCA, any action taken by LPL, or an affiliate, as lender against the assets in the client’s advisory account pursuant to the client’s SCA loan agreement is separate from the client’s advisory relationship with LPL and therefore not subject to the fiduciary duty requirements under the client’s investment advisory agreement. Further, clients should note that the returns on accounts or on pledged assets may not cover the cost of loan interest and advisory fees. Clients should be aware that LPL’s collateralized lending program is one way, among many, for clients to raise necessary cash. Before pledging assets in an account, clients should carefully review the governing loan agreement, loan 33  application and any forms required by the lender and any other forms and disclosures provided by LPL. Clients are encouraged to weigh carefully the potential investment, tax or other benefits of the collateralized lending program against the overall risks of securities-based borrowing, tax consequences of liquidation and the total cost of the loan, inclusive of the existing fees that will continue to be paid to LPL and its IARs for the pledged assets. For a list of the third-party banks currently participating in LPL’s collateralized lending program, please visit lpl.com/disclosures.html, click on “Account Disclosures, Agreements, Fee Schedules & Conflicts of Interest,” and then “Third Party Compensation and Related Conflicts of Interest.” For additional disclosures regarding LPL’s Secured Credit Account, please visit lpl.com/disclosures.html, click on “Account Disclosures, Agreements, Fee Schedules & Conflicts of Interest,” and then “Secured Credit Account Disclosures.” Cybersecurity Risk. Failures or breaches of the electronic systems of LPL, its service providers, securities market participants or the issuers of securities can cause significant losses for investors. Unintentional cyber events, such as the inadvertent release of confidential information, could also adversely impact accounts. Any cyber event could result in the loss or theft of investor data or cause investors financial loss and expense. Use of Artificial Intelligence and Machine Learning. Recent technological advances in artificial intelligence, generative artificial intelligence, and machine learning technology (collectively, “Machine Learning Technology”) may pose risks to LPL and its IARs. LPL and its IARs could be further exposed to the risks of Machine Learning Technology if third-party service providers or any counterparties, whether or not known to LPL or its IARs, also use Machine Learning Technology in their business activities. LPL and its IARs will not be in a position to control the operations of third-party service providers or counterparties, the manner in which third-party products are developed or maintained or the manner in which third-party services are provided. Machine Learning Technology is generally highly reliant on the collection and analysis of large amounts of data, and it is not possible or practicable to incorporate all relevant data into the model that Machine Learning Technology utilizes to operate. Certain data in such models will inevitably contain a degree of inaccuracy and error, potentially materially so, and could otherwise be inadequate or flawed, which would be likely to degrade the effectiveness of Machine Learning Technology. To the extent that LPL or its IARs are exposed to the risks of Machine Learning Technology, any such inaccuracies or errors could have adverse impacts on LPL or its IARs. Machine Learning Technology and its applications, including in the financial services sector, continue to develop rapidly, and it is impossible to predict the future risks that will from time to time arise from such developments. Values-Based and Environmental, Social and Governance (ESG) Investing Risk. Values-based investing or ESG investing, also known as “socially responsible investing,” “sustainable investing,” or “impact investing,” focuses on the social values or environmental, social, and governance standards or the sustainability factors of an investment. Some values-based investing strategies focus on factors relating to an individual investor’s personal or religious values, such as “biblical investing,” while other strategies focus on issues like environmental impact. Some values-based investment strategies use values-based criteria to supplement financial analysis when considering a particular issuer or security, while others affirmatively select “socially responsible” investments or screen out or exclude investments in companies that engage in certain activities. Values-based investing may limit the type and number of investments available in a strategy and cause the strategy to underperform other strategies without a values-based focus or with a focus that involves a different type of focus or screening methodology. Values-based strategies may underperform the market as a whole. Companies and issuers selected in a values-based strategy may not or may not continue to demonstrate values-based characteristics. Different investors likely have different opinions about what types of investments are socially responsible. Comparable Products. LPL offers various mutual funds, ETFs, and other investment products that have similar or identical investment strategies but different fee and expense arrangements. For example, LPL sells both mutual funds and ETFs that are designed to track an index of securities, such as the S&P 500 Index. A mutual fund and an ETF following an identical strategy have different fees and expenses that affect investment returns. 34  Those fees and expenses include direct costs like sales loads, commissions, and other transaction costs, and indirect costs at the product level like advisory or management fees, distribution expenses (12b-1 fees), and other administrative, shareholder servicing and transfer agent fees. The impact of those fees and expenses on investment returns also varies based on the size of the initial investment, the length of time the investment is held, and other factors. The differences in fees and expenses, and additional differences in compensation paid directly by product sponsors like revenue sharing, mean that LPL and its IARs generally will earn more compensation for selling one investment product than another. As a result, LPL and its IARs have a conflict of interest because of the financial incentive to recommend investment products that pay more compensation if a less expensive comparable product could be used to achieve a customer’s investment objective. Annuity Products. If investor client invests in annuity products in an account, the client should be aware of the specific risks and limitations of the annuity products. Clients should be aware that certain riders purchased with a variable annuity may limit the investment options and the ability to manage the subaccounts. Some products may charge a recapture or redemption fee for contracts or benefits not held for a specified period of time or that do not follow stated withdrawal terms. Registered Index Linked Annuities (“RILAs”) are insurance products tied to the performance of a market index, offering the positive returns of the index up to a cap and providing a buffer for a certain level of negative returns. RILAs are subject to risks associated with other investment products, including market risk, and the total loss of principal is possible. If client purchases an annuity product that is part of the Program, client will receive a prospectus with respect to the terms and conditions of the annuity product. Reliance on Electronic Communications and Delivery. Both the Prospect Tool and a GWP account are primarily online services, and communications concerning the GWP Program are intended to occur primarily through electronic means (including but not limited to, email communications and Account View, although the IAR will be available to discuss investment strategies, objectives or the account in general in person or via telephone. Additionally, clients are required to create and maintain an active Account View profile to use the Prospect Tool or open a GWP account. Therefore, the Program differs from more traditional advisory relationships in which an IAR has more frequent personal interactions with a client. Clients looking for more personal communications should consider whether the Prospect Tool or a GWP account, as applicable, will meet their communication preferences. As set forth in the Terms of Use, GWP Program Agreement, or the CRA, as applicable, users and clients consent to the electronic delivery of all current and future Form ADVs, brochure supplements, privacy notices, prospectuses and offering documents, tax forms and other legal and regulatory notices, disclosures, reports and other communications, including delivery through Account View, to the e-mail address of record or to such other password-protected website as LPL may designate. Reliance on Information Provided by User or Client; Protecting Your Account. LPL and the IAR provide advice and recommendations based on the information provided to LPL regarding investment objectives, financial condition, income, other investments, and all other information requested when opening an account. If a user or client were to provide LPL and the IAR with incomplete or inaccurate information, such omissions or inaccuracies could materially impact the quality and applicability of recommendations of LPL or the IAR. In addition, users and clients are responsible for monitoring and updating information provided in the event of changes (e.g., contact information or life event changes, such as a change to their retirement age), that could impact the recommendations made by the Program. Clients are solely responsible for additions to and withdrawals from their account(s) and for maintaining the confidentiality of any password selected for their client profile or account. Clients are required to notify LPL and the IAR in the event they become aware of unauthorized use of their account or any other security breach related to use of Account View or any other electronic communications. Reliance on Technology; Back-up Measures; and Identity Theft. The Programs’ investment activities and investment strategies are dependent upon various computer and telecommunications technologies, many of which are provided by or are dependent upon third parties, data feed, data center, telecommunications, or utility 35  providers. The successful deployment, implementation, and/or operation of such activities and strategies, and various other critical activities provided by LPL and the IAR, could be severely compromised, damaged or interrupted by system, network or component failure, computer and telecommunications failure, power loss, a software-related “system crash,” unauthorized system access or use (such as “hacking”), computer viruses and similar programs, other security breaches, fire or water damage or other catastrophic events, power outages, human errors in using or accessing relevant systems, or various other events or circumstances. Item 9: Disciplinary Information LPL entered into a settlement with the SEC in which the SEC found that LPL willfully violated its obligations under Section 17(a) of the Exchange Act and Rule 17a-8 thereunder, which require broker-dealers to comply with certain anti-money laundering (“AML”) requirements. The SEC found that LPL did not follow its AML policies for its customer identification program and ongoing customer due diligence obligations by, among other things, not properly verifying new accounts; not timely closing accounts that did not pass its screening measures; and not closing or restricting certain accounts that were prohibited under LPL’s AML Policies. The SEC censured LPL and ordered LPL to cease and desist from committing or causing any violations and any future violations of such section and rule, to pay a civil monetary penalty in the amount of $18 million, and to comply with certain undertakings (2025). LPL entered into a settlement with the SEC in which the SEC found that LPL willfully violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder in connection with the maintenance and preservation of off-channel communications; and failed to reasonably supervise its personnel within the meaning of Section 15(b)(4)(E) of the Exchange Act and Section 203(e)(6) of the Advisers Act. LPL admitted to the facts in the settlement order and acknowledged its conduct violated the federal securities laws. The SEC ordered LPL to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder, censured it for its conduct, ordered it to pay a civil monetary penalty in the amount of $50,000,000, and ordered it to comply with certain undertakings (2024). LPL entered into a settlement with the SEC in connection with LPL’s failure to comply with its Customer Identification Program procedures. The SEC found that LPL willfully violated Section 17(a) of the Exchange Act and Rule 17a-8 thereunder and was a cause of a third party’s violations of Sections 17(a)(2) and (3) of the Securities Act and Section 206(2) of the Advisers Act. The SEC ordered LPL to cease and desist from committing or causing any further violations of these laws and regulations, censured LPL for its conduct, and ordered the payment of disgorgement and prejudgment interest totaling $141,202 (deemed satisfied based on LPL’s voluntary remedial payment of $4,118,876 to the impacted client), and the payment of a civil money penalty of $750,000 (2021). As part of a voluntary self-reporting initiative in 2019, LPL entered into a settlement with the SEC in which the SEC found that LPL willfully violated Section 206(2) and 207 of the Advisers Act in connection with inadequate disclosure to clients of its and its associated persons’ conflicts of interest related to its receipt of 12b-1 fees and/or its selection of mutual fund share classes that pay such fees. The SEC ordered LPL to cease and desist from committing or causing any violations of Sections 206(2) and 207 of the Advisers Act, censured it for its conduct, and ordered the payment of disgorgement and prejudgment interest to affected investors totaling $9,333,516 (2019). LPL, as a broker-dealer, is a member of FINRA and has been found to be in violation of FINRA’s rules related to its brokerage activities. In particular, LPL consented to sanctions related to the following matters: 36  • LPL’s supervisory systems and maintenance of books and records relating to brokerage direct business transactions, supervisory systems and misstatements about fees relating to brokerage product switch transactions, and supervisory systems relating to brokerage recommendations of publicly traded securities of BDCs to customers, resulting in a censure, a fine of $5.5 million, restitution to impacted customers, and an undertaking to certify that LPL has remediated the systems and procedures for making recommendations of BDCs (2023). • LPL’s supervisory systems and procedures relating to the transmittal of customer funds by wire or check to third parties and maintenance of related books and records, resulting in a censure, a fine of $3,000,000, restitution to impacted clients, and an undertaking to identify and pay restitution to affected customers for certain other improper transfers (2023). • LPL’s failure to accurately calculate its customer reserve requirement, failure to maintain a sufficient customer reserve, failure to maintain policies and procedures reasonably designed to achieve compliance with the Securities and Exchange Act and FINRA rules, and failure to maintain accurate books and records, resulting in a censure and a fine of $300,000 (2022). • LPL’s self-reporting of potential issues related to certain C-share purchase suitability reviews and its supervisory systems and procedures relating to waivers of front-end sales charges for rollovers of 529 savings plan investments from one state plan to another, resulting in a censure and payment of restitution to impacted customers (2021). • LPL’s supervisory systems and procedures relating to record retention, fingerprinting and screening of certain associated persons, and supervision of consolidated reports, resulting in a censure, a fine of $6,500,000 and an undertaking to review and enhance related policies, systems and procedures (2020). • LPL’s supervisory systems and procedures relating to changes in the authority of custodians of accounts established under the Uniform Gifts to Minors Act and/or the Uniform Transfers to Minors Act, resulting in a censure, a fine of $300,000, and an undertaking to review and enhance its policies, systems, and procedures related to supervision of such accounts (2019). • The effectiveness of LPL’s anti-money laundering program, LPL’s failure to amend certain Forms U4 and U5, and LPL’s systems and supervisory procedures relating to Forms U4 and U5 reporting requirements, resulting in a censure and a fine of $2,750,000 and an undertaking to review the process used to disclose customer complaints on Forms U4 and U5 (2018). • LPL’s brokerage supervisory and disclosure procedures related to the sale of certain brokered CDs in brokerage accounts, resulting in a censure and a fine of $375,000 (2018). • LPL’s systems and supervisory procedures relating to the creation and distribution of certain required account notices, resulting in a censure, a fine of $900,000, and an undertaking to review affected processes (2016). • LPL’s systems and supervisory procedures relating to the format in which certain electronic records were retained, resulting in a censure and a fine of $750,000 (2016). LPL, as a broker-dealer, is regulated by each of the 50 states and has been the subject of orders related to the violation of state laws and regulations in connection with its brokerage activities. In particular, LPL entered into consent orders related to the following matters: • LPL’s supervision of electronic signature practices at an LPL branch office in Massachusetts, resulting in a fine of $250,000 and an undertaking to conduct an internal review of certain related policies and procedures (Massachusetts or “MA”, 2023). • LPL’s supervision of an LPL broker-dealer/investment adviser agent’s sales of structured products, resulting in a censure, an offer of restitution to impacted clients, and a fine of $125,000 (Texas, 2022). 37  • LPL’s supervision of two LPL broker-dealer and/or investment adviser agents who pled guilty to charges of fraudulent practices with LPL customers, resulting in a cease and desist order, a fine of $350,000 and a $150,000 contribution for financial literacy and investor education initiatives, training and related materials (Connecticut, 2021). • LPL’s supervision of an LPL representative under a heightened supervision plan, resulting in a cease- and-desist order; a fine of $275,000; payments of restitution, disgorgement and investigative costs; and offers of payment of surrender charges in connection with variable annuity contracts for impacted customers (New Hampshire or “NH”, 2020). • LPL’s failure to timely register (or maintain the registration of) certain agents in Massachusetts (“MA”) and failure to amend Forms U4 and U5 for certain agents registered in MA, resulting in a censure, a fine of $1,100,000, and an undertaking to review and enhance its policies and procedures related to registering its agents in MA and filing reportable events (MA, 2019). • LPL’s brokerage supervisory procedures relating to email review and annual branch office examinations, resulting in a civil penalty of $450,000 and an undertaking for third-party review of related processes (Indiana, 2018). • The sale of unregistered, non-exempt securities in violation of state registration requirements, resulting (upon entry of the individual consent order) in payment to each participating state or jurisdiction of a civil penalty of $499,000, reimbursement of certain investigative expenses, remediation through repurchase of certain securities and payment of losses to certain affected customers, and certain additional undertakings (Settlement with up to 53 members of the North American Securities Administrators Association (NASAA, 2018). • The sale of non-traded alternative investments in excess of prospectus standards or LPL’s internal guidelines and the maintenance of related books and records, resulting in a censure, a fine of $950,000, a $25,000 contribution to an investor education fund and remediation of losses to impacted customers (New Jersey, 2017). • LPL’s supervisory practices for LPL representatives located on the premises of a credit union, resulting in a censure, a fine of $1,000,000, and an undertaking to avoid investor confusion specific to the name under which the credit union does business and review LPL’s related policies and procedures (MA, 2017). • LPL’s oversight of certain VA transactions, resulting in a censure, a fine of $975,000, restitution to clients and former clients of an LPL representative, disgorgement of commissions retained by LPL for such representative’s VA sales, and an undertaking to review such representative’s brokerage and advisory activities and LPL’s related policies and procedures (MA, 2017). For more information about those state events and other disciplinary and legal events involving LPL and its IARs, client should refer to Investment Adviser Public Disclosure at https://adviserinfo.sec.gov/ or FINRA BrokerCheck at https://brokercheck.finra.org/. Item 10: Other Financial Industry Activities and Affiliations LPL is a broker-dealer and investment adviser registered with FINRA and the SEC. As a broker-dealer, LPL transacts business in various types of securities, including mutual funds, stocks, bonds, commodities, options, private and public partnerships, variable annuities, REITs and other investment products. LPL is registered to operate in all 50 states and has primarily an independent-contractor sales force of registered representatives and IARs dispersed throughout the United States. LPL has a dedicated team of employee IARs in its offices who service certain accounts, and also a small subset of IARs who operate their own offices or are located on the premises of certain financial institutions and are employees of LPL Employee Services, LLC, an LPL-affiliated company. IARs may be broker-dealer registered representatives of LPL. LPL is also registered as an introducing 38  broker with the Commodity Futures Trading Commission. In addition, LPL is qualified to sell insurance products in all 50 states. LPL Enterprise, LLC (“LPLE”), is a related person and affiliate of LPL, and is an investment adviser registered with the SEC and a broker-dealer registered with FINRA. As a broker-dealer, LPLE transacts business in various types of securities, including mutual funds, stocks, bonds, commodities, options, private and public partnerships, variable annuities, REITs and other investment products. LPLE is registered to operate in all 50 states and has primarily an independent-contractor sales force of registered representatives and investment adviser representatives dispersed throughout the United States. If required for their positions with a registered broker- dealer, LPLE’s principal executive officers are securities licensed as registered representatives of LPL. In addition, LPLE is qualified to sell insurance products in all 50 states. The Private Trust Company, N.A. (“PTC”), a federally chartered non-depository bank licensed to provide trust services in all 50 states, is a related person of LPL. PTC serves as IRA custodian for SAM accounts set up as IRAs and receives an annual maintenance fee for this service. PTC also provides personal trustee services to clients for a variety of administrative fiduciary services, which services may relate to an account. Because LPL and PTC are affiliated companies and share in revenues, there is a financial benefit to the companies if a client uses PTC as a custodian or for personal trustee services, or if a PTC client uses LPL as an investment advisor. PTC’s IRA custodian and trustee services and related fees are established under a separate engagement between the client and PTC. Fiduciary Trust Company of New Hampshire (“FTC”), a non-depository trust company, is a related person of LPL. FTC provides custodial and various other recordkeeping and services to IRAs and certain employer-sponsored plans maintained through non-SAM accounts. Because LPL and FTC are affiliated companies and share in revenues, there is a financial benefit to the companies if a client is referred to or otherwise elects to engage with FTC for services under another LPL program and uses LPL as the investment adviser or broker-dealer. FTC’s custodial and recordkeeping services and related fees are established under a separate engagement between the client and FTC. IARs are permitted to engage in certain LPL-approved business activities other than the provision of brokerage and advisory services through LPL, and in certain cases, an IAR could receive greater compensation through the outside business than through LPL. An IAR could also be an accountant, real estate agent, tax preparer, lawyer or refer customers to other service providers and receive referral fees, for example. As other examples, an IAR could provide advisory or financial planning services through an independent unaffiliated investment advisory firm, sell insurance, or provide third-party administration to retirement plans through a separate firm. If an IAR provides investment services to a retirement plan as a representative of LPL and also provides administration services to the plan through a separate firm, this typically means the IAR is compensated from the plan for the two services. If clients engage with an IAR for services separate from LPL, clients may wish to discuss with him or her any questions the client has about the compensation the IAR receives from the engagement. Additionally, LPL and/or its IARs may refer clients to unaffiliated firms other than investment product sponsors or financial institutions, for either investment or non-investment related products or services, in exchange for a referral fee or other forms of indirect compensation. These may include referrals for investment banking, lending, accounting, tax preparation, financial technology tools, corporate trustee services, or such other products, services or consultations that may be requested by and/or benefit a client. As applicable, clients will receive additional disclosures identifying these particular arrangements and any related compensation at the time of the referral. 39  LPL has an affiliated insurance agency, LPL Insurance Associates, Inc. (“LPLIA”) through which IARs may sell insurance products. LPL receives compensation from issuers of life insurance (universal, variable universal, whole life, and term) and other insurance contracts that are made available by IARs, such as long-term care insurance and disability insurance. The compensation includes commissions and trails and may include payments for administrative services that LPL provides and/or payments made for LPL’s marketing and sales force education and training efforts, including LPL’s annual national sales and education conference and other conferences. IARs receive a percentage of the commissions or trailing commissions paid to LPL or LPLIA. IARs may also sell insurance through an independent unaffiliated insurance agency. An IAR may earn compensation (including trailing compensation), benefits and non-cash compensation through the third-party insurance agency and may have an incentive to recommend clients purchase or sell insurance products with the independent agency. Some IARs work with UIT sponsors to create customized UITs. For customized UITs, IARs provide the UIT sponsor with input regarding the portfolio composition of the UIT, and in exchange may be paid a consulting fee. The UIT sponsor retains sole responsibility for creating and implementing the investment portfolio of the UIT. An IAR is permitted to invest SAM account assets in customized UITs for which the IAR provided consulting services. LPL has policies and procedures in place for customized UITs that are designed to prevent conflicts of interest and to ensure that IARs act in clients’ best interest. Among other things, these policies prevent IARs from receiving consulting fees for assets that any LPL client invests in customized UITs. Depending on the securities held by the UIT and on whether a client separately pays transaction charges (for example in an account), a customized UIT’s sales charges and sponsor fees could be more expensive than separately purchasing the basket of securities in the UIT’s portfolio. Before investing in a customized UIT, clients may wish to ask their IAR questions about compensation received from the UIT and about the UIT’s fees and expenses. In certain cases, associated persons of a SMA Portfolio Manager or Model Advisor may also be broker-dealer registered representatives of LPL. If an associated person of an SMA Portfolio Manager or Model Advisor is a broker-dealer registered representative of LPL, that person is providing advisory services to the program account on behalf of the SMA Portfolio Manager or Model Advisor, as applicable. That person is not acting in a brokerage capacity or on behalf of LPL with respect to the portfolio management services provided under the applicable program. The SMA Portfolio Manager’s or Model Advisor’s Form ADV, as applicable, should disclose whether or not its associated persons are registered representatives of LPL. Item 11: Code of Ethics, Participation or Interest in Client Transactions and Personal Trading LPL has adopted a code of ethics that includes guidelines regarding personal securities transactions of its employees and IARs. The code of ethics permits LPL employees and IARs to invest for their own personal accounts in the same securities that LPL and IARs purchase for clients in accounts. This presents a conflict of interest because trading by an employee or IAR in a personal securities account in the same security on or about the same time as trading by a client can disadvantage the client. LPL addresses this conflict of interest by requiring in its code of ethics that LPL employees and IARs report certain personal securities transactions and holdings to LPL. LPL has procedures to review personal trading accounts for front-running. In the Programs that offer model portfolios designed by LPL Research, LPL Research has sole control over trading decisions (including timing of implementation thereof) for its model portfolios, the potential for front-running by most employees and IARs is limited, and no such review is conducted other than for employees in LPL Research. Employees in LPL Research are required to obtain pre-clearance prior to purchasing certain securities for a personal account. Employees and IARs are also required to obtain pre-approval for investments in private placements and initial public offerings. A copy of the code of ethics is available to clients or prospective clients upon request and is available at lpl.com/disclosures.html. 40  LPL offers product sponsors of mutual funds, closed funds, interval funds, ETFs, alternative investments, advisory strategies, annuities and life insurance contracts the opportunity to purchase analytical data, business intelligence and ad hoc reporting. This information helps product sponsors in their sales, distribution and product development efforts with respect to customers and clients and creates similar conflicts to those discussed above. LPL receives up to $600,000 annually from each product sponsor in third party compensation for this information. Participation or Interest in Client Transactions (Not Applicable to IPA Program) Purchases of mutual fund, UIT or alternative investment shares are typically processed through the firm's proprietary account, resulting in such purchases being characterized as principal transactions for certain reporting purposes. In such cases, the shares will be purchased at the fund’s net asset value, and no additional charges will be applied to such transactions as a result of the firm’s use of a proprietary account. LPL does not otherwise engage in principal transactions with its clients in its Custodied Programs. LPL’s parent company, LPL Financial Holdings Inc., is a publicly traded company. LPL does not permit its IARs to recommend or purchase LPL Financial Holdings Inc. stock in Program accounts. However, SAM accounts may purchase or hold LPL Financial Holdings Inc. stock if expressly directed by the client. Third-party Asset Managers are not prevented from purchasing LPL Financial Holdings Inc. stock in Program accounts. In addition, IARs may recommend or purchase, or a model may include, an ETF or mutual fund that holds LPL Financial Holdings Inc. stock as an underlying investment, for example, an ETF that seeks to replicate the performance of an investment services index that includes LPL Financial Holdings Inc. Additional Program- and Product-Specific Practices Strategic Asset Management (SAM) Program As described under Item 12, “Brokerage Practices”, below, IARs may aggregate transactions in equities, options, and fixed income securities for accounts. Clients should be aware that the IAR’s personal accounts (including related accounts, such as those of family members) can be included in such a block order. Although the same average price would be applied to accounts and the IAR’s personal accounts, the inclusion of an IAR’s personal account in a block order can present a conflict of interest. It is possible that the inclusion of the personal account could negatively impact the price of the security or result in the client being allocated less of an order. If a partially filled order is allocated on a random basis, the inclusion of the personal account could make it less probable that an account is randomly selected and the IAR’s personal account could be randomly selected instead of an account. LPL addresses this conflict by disclosing it to clients. Clients should ask their IAR if they would like more information on the IAR’s practices in this respect. Manager Select (MS) Program LPL, as principal, buys securities from and sells securities to clients in MS accounts. This practice could put LPL in a position where its own interests are in conflict with clients. However, LPL is not a market maker in securities and does not carry an inventory. Though LPL also processes securities transactions, as broker-dealer, for MS Model Provider Platform accounts, LPL does not charge commissions. When LPL executes trades for an SMA Portfolio Manager in a principal capacity on the MS SMA Platform, it receives a markup or markdown on the transaction. This means, for example, if LPL sells a security at a price higher than what LPL paid, LPL will earn a markup. Conversely, if LPL buys a security at a price lower than what LPL sells it for, LPL will receive a markdown. The maximum markup or markdown that LPL receives when acting in a principal capacity in a MS account is $2.00 per bond. In many cases, this maximum does not apply, and the actual markup or markdown is lower, typically $1.00 per bond. Details about a markup or markdown for a particular transaction will be furnished upon request. The IAR does not share in this markup or markdown. 41  Optimum Market Portfolios (OMP) Program and Optimum Funds LPL provides investment consulting services to the investment advisor of the Optimum Funds, which comprise the model portfolios in the OMP Program, and may also be purchased in a SAM account at the IAR’s discretion. These services include assisting the investment advisor in determining whether to engage, maintain or terminate sub-advisors for the Optimum Funds. As compensation for these services, LPL receives an investment consulting fee of up to 0.22% of assets from the investment advisor to the Optimum Funds. In addition, a senior executive officer of LPL serves as a Trustee of the Optimum Funds. Certain of the Optimum Funds are subject to voluntary expense caps that may result in the adviser to the Optimum Funds waiving fees or reimbursing expenses that exceed those caps. The adviser to the Optimum Funds bears the cost of any reimbursements or waivers. LPL also performs recordkeeping, administrative and shareholder services on behalf of the Optimum Funds and receives compensation for the services based on the amount of Program assets that are invested in the funds (up to 0.15% annually). These services include establishing and maintaining accounts with the Optimum Funds, facilitating settlement of funds, responding to customer inquiries and requests, and maintaining sub-account records reflecting the issuance, exchange or redemption of shares by each account. The receipt of this recordkeeping and investment consulting compensation by LPL is an important revenue stream and presents a conflict of interest, because LPL has a financial benefit the more assets that are invested in the Optimum Funds. The investment consulting and recordkeeping compensation is retained by LPL and is not shared with its IARs. Although LPL does not share investment consulting or recordkeeping compensation with IARs, such fees and payments will increase LPL’s profits and indirectly benefit IARs, for example by increasing the value of equity awards from LPL’s parent company to IARs or by being used by LPL to support marketing or training costs. Fractional Shares For certain ETFs and stocks, LPL executes trades in fractional shares of those securities as an accommodation to clients. There is not an active open market for fractional shares, and executing trades with LPL is most often the only form of liquidity for a client that holds fractional shares in his or her account. LPL does not receive any compensation in addition to advisory fees for executing trades in fractional shares for a client’s account. LPL will only buy and sell fractional shares when a client is also trading whole shares of the security, in connection with a dividend reinvestment plan, or to sell remaining fractional shares to close a position. Trades in fractional shares will happen on the same day and at the same price as a trade in whole shares, or otherwise at market closing price. Collateralized Lending Program LPL helps facilitate clients’ access to non-purpose lines of credit collateralized by their Program accounts through its collateralized lending program. Because of LPL’s interest as a lender for clients borrowing through the Secured Credit Account (“SCA”) product and its arrangements with the partner banks participating in the program, clients may be limited in their ability to negotiate the most favorable loan terms. Clients are not required to use the SCA product or the banks in LPL’s program, and can work directly with non-partner banks to negotiate loan terms or obtain other, potentially more favorable, financing arrangements. If a client obtains a loan from a non-partner bank, they should notify their IAR of the amount of the line of credit. Clients should understand that the interest and additional fees paid to the lender, whether LPL, a partner bank or a non-partner bank, in connection with the loan are separate from and in addition to the advisory fees the client pays LPL for its advisory services on the account. 42  For the SCA product, LPL receives all interest and fees as the lender based on the outstanding loan amount. Interest and fee amounts can vary in accordance with market conditions and are subject to the loan agreement, documentation and fee schedules provided by LPL. For partner bank loans, LPL receives third party compensation from partner banks based on the amount of outstanding loans. Compensation can be up to 0.75% of the outstanding loan amount. This compensation to LPL varies, and, therefore, LPL can earn more or less depending on the bank selected by the client. The receipt of compensation poses a conflict of interest to LPL because LPL has the largest financial incentive for the client to select the SCA product, and if a client selects a bank in the program instead, LPL has a financial incentive for the customer to select a participating bank that pays LPL more than other participating banks. For partner banks, LPL does not share this compensation with its IARs, and therefore, an IAR does not have a direct financial incentive if one bank is selected over another. For the SCA product, LPL does share compensation with its IARs, and therefore, an IAR has a financial incentive for clients specifically to choose the SCA product over any partner or non-partner bank loan. An IAR’s compensation on the SCA product is reduced if the client’s interest rate is discounted, so the IAR has an incentive not to request the interest rate be discounted below a certain level or at all. Neither LPL nor an IAR receive loan-based compensation if clients borrow through a non-partner bank. LPL and its IARs have an interest in continuing to receive investment advisory fees, which gives LPL and its IARs an incentive to recommend that clients borrow money rather than liquidate some of their assets managed by LPL and the IAR. This incentive creates a conflict of interest for LPL and its IARs when advising clients seeking to access funds on whether they should liquidate assets or instead hold their securities investments and utilize a line of credit secured by assets in their account. Because LPL and its IARs are compensated primarily through advisory fees paid on clients’ accounts, LPL and its IARs also have an interest in managing an account serving as collateral for a loan in a manner that will preserve sufficient collateral value to support the loan and avoid a maintenance call. This presents a conflict of interest with clients because it could incentivize LPL’s IARs to invest in more conservative, lower performing investments to maintain the stability of the account, or alternatively, could incentivize the IAR to invest in more aggressive assets to achieve returns higher than loan interest and costs. For additional disclosures regarding LPL’s collateralized lending program, including a list of the banks currently participating in the program, please visit lpl.com/disclosures.html, click on “Account Disclosures, Agreements, Fee Schedules & Conflicts of Interest,” and then both “Secured Credit Account Disclosures” and “Third Party Compensation and Related Conflicts of Interest.” Cash Sweep (For Custodied Programs Only) For Custodied Program accounts custodied at LPL, LPL automatically transfers cash balances (including otherwise uninvested cash amounts received from the customer, securities transactions, dividend and interest payments, and other account-related activities) in a customer’s eligible accounts through the account’s designated sweep service option, where applicable. The type of sweep service options available (and how cash is held) depends on the customer’s account type. LPL offers Federal Deposit Insurance Corporation (“FDIC”)- insured bank sweep services for most customer accounts. Accounts may be eligible for the LPL Insured Cash Account (“ICA”) Program, the LPL Deposit Cash Account (“DCA”) Program, the Single Bank Insured Cash Account (“SBICA”) sweep program, or the money market mutual fund sweep, each described below. Not all sweep service options are available to all types of customer accounts. Cash sweep is offered as an account feature and service to facilitate the operation and maintenance of the account and is not intended to be used as an investment option or as part of an account’s asset allocation, though for certain advisory accounts, it is typical for an account to have an allocation to cash to support the operational needs and fees charged to the account. LPL and its IARs do not typically recommend specific sweep service options or underlying sweep holdings. For more information, clients should see their customer agreement and the applicable ICA, DCA, or SBICA disclosure booklet, or the sweep money market fund prospectus. 43  option, prevailing interest and other market factors. Clients should for The aggregate fees and expenses received by LPL for a Custodied Program account’s designated sweep service option can be higher or lower than the customer’s yields on the sweep service option depending on the particular sweep see rates https://www.lpl.com/disclosures/lpl-financial-fdic-insured-bank-deposit-sweep-programs.html information about our customer fees and customer interest rates for ICA and DCA or contact their IAR for information about customer fees and customer interest rates for SBICA and for money market funds. Historically, customer yields in ICA have always been lower than the aggregate fees and charges received by LPL. Customer yields in DCA, SBICA and in money market mutual funds have been both lower and higher than the aggregate fees and charges received by LPL. Cash sweep services are not intended to be used for long-term investments and are more appropriately viewed as an indirect cost of maintaining and operating the account. LPL makes available a wide range of investment alternatives with differing risk and return characteristics, which are better suited for meeting customer investment needs and objectives. Customers should compare the terms, interest rates, required minimum amounts and other features of their account’s applicable sweep service option available through other types of accounts and investment options available in their account. FDIC insurance protects against the loss of FDIC-insured deposits if the depository institution or bank holding the deposit fails. LPL itself is not an FDIC-insured depository institution. With respect to our sweep service options, only balances received by, and deposited at, the ICA, DCA and SBICA participating banks are eligible for FDIC insurance (subject to applicable limits). Eligibility for pass-through deposit insurance coverage for ICA, DCA, and SBICA deposits is subject to fulfilling specific conditions. Client Cash Accounts and money market mutual funds are not customer bank deposits and are subject to investment risks, including the potential loss of the amount invested. These investments are not FDIC insured, but may be subject to SIPC protection. Insured Cash Account (ICA). LPL's ICA sweep service option automatically sweeps otherwise uninvested cash balances held within customer brokerage (and certain advisory accounts) into interest-bearing bank deposits eligible for FDIC insurance (subject to applicable limits). Under its agreement with each ICA participating bank in which customer cash may be swept, LPL receives a fee from the bank equal to a percentage of the average daily deposit balance held at the bank. Such fees differ among the participating banks depending on the current interest rate environment and/or any fee waivers made by LPL. The fee LPL receives is generally an average aggregate annual rate of up to 6% as applied across the deposits held at all of the ICA participating banks. Because the banks generally pay different amounts to LPL on account balances, fees received by LPL with respect to a specific customer account (and the account's cash holdings) may be higher or lower than this average percentage amount. The fees received by LPL from the ICA participating banks reduce the interest rate customers receive on their cash held through ICA. These fees are additional compensation to LPL for operating and maintaining the account and for LPL’s other services to the account. LPL has chosen to offer ICA as the sole sweep service option for certain account types, in part because of the additional compensation LPL earns from the use of ICA. In situations where customer cash balances allocated through ICA exceed the deposit availability at ICA participating banks, uninsured cash balances may be placed into an “overflow” Client Cash Account. Such balances are considered to be “free credit balances” and represent a direct liability of LPL to the customer. See below for information about how LPL is compensated on Client Cash Account balances. Deposit Cash Account (DCA). LPL's DCA sweep service option automatically sweeps otherwise uninvested cash balances held within certain advisory accounts into interest bearing bank deposits eligible for FDIC Insurance (subject to applicable limits). In the DCA program, each Bank pays compensation equal to a percentage of the average daily aggregated omnibus deposit balance held at the bank. This amount includes the fee for the third- party administrator, LPL’s per-Account Fee, and interest payable to participating accounts. Such fees differ among the participating banks. Customers have no rights to the amounts paid by the DCA participating banks, 44  except for interest actually credited to the customer account. However, amounts collected from the DCA participating banks during each period, less interest credited, will be allocated on a per-dollar, per-account basis and used to offset each customer’s monthly LPL Account Fee for providing the sweep services. In addition, part of the payment by the participating banks will be used to compensate the third-party administrator for its services. For its services under the DCA program, including making the platform available, LPL receives a per-Account Fee each month. The monthly fee is based on a fee schedule indexed to the current Federal Funds Target (FFT) Rate as detailed in the DCA Disclosure Booklet. It is expected that this fee will be recouped from the DCA participating banks and will not be a fee directly applied to customer accounts. The fee LPL receives under the DCA program does not vary and is not affected by the actual amounts held in the deposit accounts or in the customer’s account. LPL has chosen to offer DCA as the sole service option for certain account types, in part because of the additional compensation LPL earns from the use of DCA. Single Bank Insured Cash Account (SBICA). For certain eligible customers participating in an LPL investment program associated with, or located at, certain banks LPL makes available the SBICA sweep service (and not the sweep service they might otherwise be eligible for, such as ICA). The SBICA sweep service functions like the ICA sweep service, except that otherwise uninvested customer account cash balances will be automatically swept into deposits eligible for FDIC insurance (subject to applicable limits) of the bank through which the investment program is offered, or in some situations, in a series of banks affiliated with the investment program bank. The banks participating in the SBICA have an agreement with LPL for financial professionals to offer brokerage and advisory services on their premises. This presents an additional conflict of interest because the financial professional is an employee of the bank that is also used for the sweep, and the bank benefits financially from the deposits. Under its agreement with each SBICA bank into which customer cash may be swept, LPL receives a fee from the bank equal to a percentage of the average daily deposit balance in the respective SBICA. The fee paid to LPL equals an average annual rate of up to 0.50% as applied across all deposit accounts taken in the aggregate. Because the SBICA participating banks generally pay different amounts to LPL on account balances, fees received by LPL with respect to a specific customer account (and the account's cash holdings) may be higher or lower than this average percentage amount. In some situations, LPL will receive no fee with respect to these deposits. The fees received by LPL from the SBICA participating bank(s) reduce the interest rate received by customers on their cash held through SBICA. These fees are additional compensation to LPL for operating and maintaining the account and for LPL's other services to the account. LPL has chosen to offer SBICA as the sole sweep service option for certain account types (and accounts sourced from the bank, bank premises or the bank employees acting as LPL financial professionals), in part, because of the broader business relationship that LPL has with the bank (and its affiliates) as well as the additional compensation LPL receives (if any). Client Cash Accounts – ICA Overflow Balances. LPL receives additional compensation and benefits from the customer cash balances maintained in the ICA overflow mechanism, referred to as Client Cash Account, which constitute free credit balances available for LPL use. LPL can use free credit balances to fund its ongoing operations subject to the limitations under SEC Rule 15c3-3. Pursuant to Rule 15c3-3, LPL can (i) deposit free credit cash balances into a segregated deposit account at its banks, thereby earning interest on the Client Cash Account balances deposited, or (ii) invest the cash balances in securities backed by the full faith and credit of the U.S. government, thereby making money on any yield generated by such securities. The amount LPL will earn from these sources will vary based on market forces and the contracts for deposit arrangements that LPL is able to secure with its banks. LPL may use both or either of these vehicles at its sole discretion. Any amounts LPL receives pursuant to these sources will be reduced by the interest payable, if any, to customers on such balances, and further reduced by the cost of borrowing any funds necessary to meet its reserve requirements under Rule 15c3-3. For example, LPL may earn interest or a return by investing in short-term U.S. Government 45  or Agency instruments or by using these balances to fund margin loans to its customers at a lower funding cost than would otherwise be the case. Customers do not share in the returns or proceeds associated with LPL's use or investment of such free credit balances, which are expected to exceed the amount of any Interest paid to the customer for Client Cash Account balances. Money Market Mutual Fund Sweep Option. LPL’s money market mutual fund sweep option automatically sweeps, otherwise uninvested cash balances held in the account and invests them daily into shares of a money market mutual fund. Currently, taxable and tax-exempt money market funds offered by J.P. Morgan Asset Management are available. LPL receives compensation in the form of servicing fees of up to 0.25% of customer assets invested in J.P. Morgan Asset Management money market funds. These money market mutual funds generally pay higher 12b-1 fees than other money market funds that are not used for sweep services. The 12b-1 fees and the payer of such fees are set out in the prospectus of the money market mutual fund. LPL receives service and administrative fees relating to the support of the sweep program from the sponsors of these funds, ranging up to 0.25% of the assets invested in the money market funds. Such fees may be waived by the fund companies in their sole discretion. These payments are in addition to other fees (e.g., recordkeeping and 12b-1 fees) received by LPL, where applicable. The compensation that LPL receives related to ICA, DCA (including from overflow mechanisms) and the Sweep Funds is in addition to the Account Fee that LPL and IAR receive with respect to the assets in the sweep investment. This compensation related to ICA, DCA and Sweep Funds is an important revenue stream and presents a conflict of interest to LPL because LPL has a financial benefit if cash balances are maintained in the ICA, DCA, or the Sweep Funds. However, this compensation is retained by LPL and is not shared with its IARs. Therefore, this compensation does not cause an IAR to have a financial incentive to recommend that cash be held in the account instead of holding securities. Non-Sweep Money Market Mutual Fund Investments (For Custodied Programs Only) In Custodied Programs, clients are able to invest cash balances in a limited number of money market mutual funds outside the sweep options offerings (such funds, “Non-Sweep Money Market Funds”). Like any other mutual fund transactions at LPL, transaction and other fees may apply. Moreover, unlike under the sweep services, transactions in Non-Sweep Money Market Funds are customer-directed (or directed by customer’s representative) and do not provide for automatic daily sweep. Depending on current interest rates and other market factors, investment returns of money market mutual funds could be, lower or higher than the aggregate fees and expenses charged by LPL for the transaction. Clients should contact their IAR for information about current fees and investment returns on money market funds. As described above, clients should understand that the share class offered for a particular Non-Sweep Money Market Fund charges higher fees and expenses than other share classes that are offered by the same Non-Sweep Money Market Fund but are not available on LPL’s platform. LPL receives compensation for the LPL customer assets invested in the Non-Sweep Money Market Funds (up to 0.30% on an annual basis) for recordkeeping, shareholder servicing and administrative services it provides for the funds and for marketing support services LPL provides to the fund sponsors as described in this disclosure. This compensation related to Money Market Funds presents a conflict of interest to LPL because LPL has a financial benefit if cash is invested in the money market funds. However, this compensation is retained by LPL and is not shared with its IARs. Therefore, this compensation does not cause an IAR to have a financial incentive to recommend that cash be held in the account instead of holding securities. Unlike other types of mutual funds available on LPL’s platform, LPL makes available Non-Sweep Money Market Funds from only a limited number of mutual fund sponsors. By making available a limited number of Non-Sweep Money Market Funds, LPL is able to negotiate greater compensation from the fund companies for services it provides to the funds. Because of the limited number of Non-Sweep Money Market Funds available on LPL’s 46  platform and the fees paid by those funds, other money market mutual funds not available through LPL’s brokerage platform are likely to have higher returns than the Non-Sweep Money Market Funds. In addition, LPL has received a waiver from the Money Market Funds to allow a lower investment minimum for the Program Share class of the than that set out in the prospectus; however, LPL imposes its own minimum investment amounts that are higher than minimums that may apply if a client were to invest in the Money Market Funds through another firm outside of the Program. In light of the investment minimums that LPL imposes with respect to the Money Market Funds, an investment in the Money Market Funds outside of a Program or an investment in one of the many other money market mutual funds offered outside of a Program would likely be more economically advantageous than an investment in the Money Market Funds through a Program. LPL does not charge transaction charges on Money Market Funds. Credit Cards As part of its cash management services, LPL makes credit cards available for its customers through a partner bank. LPL receives a flat fee for each new activated credit card that is used by the cardholder in the first 90 days. LPL also receives a portion of the transaction volume of the cardholder’s account. LPL’s portion of the transaction volume varies depending on the number of LPL active cardholders. Rollovers If a client is a participant in an employer-sponsored retirement Plan such as a 401(k) plan, and decides to roll assets out of the plan into an account at LPL, LPL and LPL IARs have a financial incentive to encourage client to invest those assets in the client’s account, because LPL will be paid on those assets, for example, through advisory fees. Clients should be aware that such fees likely will be higher than those a participant pays through an employer-sponsored plan, and there can be maintenance and other miscellaneous fees. As securities held in employer-sponsored plans are generally not transferrable to the client’s account, commissions and sales charges may be charged when liquidating such securities prior to the transfer, in addition to commissions and sales charges previously paid on transactions in the plan. This conflict of interest is mitigated by LPL’s policy regarding rollovers from an employer-sponsored plan into an LPL IRA. LPL and LPL IARs may assist clients contemplating a rollover by providing general investment education to assist plan participants in making informed investment decisions about the distribution options available to them. LPL’s educational services are intended to be consistent with the Department of Labor’s Interpretive Bulletin 96- 1. LPL is not acting in a fiduciary capacity under ERISA when providing educational services. The general investment education provided is not intended to be viewed or construed as a suggestion for clients to take a particular course of action with respect to employer-sponsored plan assets (including, a distribution therefrom). With respect to employer-sponsored plan rollovers, LPL makes information available that outlines the many factors clients should consider (including the types of fees and costs of an IRA and IRA investments) before making a decision. IARs may also agree to assist clients seeking a recommendation on whether to roll out of their employer-sponsored plan based on an analysis of the client’s personal financial needs, savings objectives and other financial and non-financial considerations, that is designed to determine whether such is in the client’s best interest under ERISA. IRA to IRA Transfers (For Custodied Programs Only) If LPL or an LPL IAR recommends that client move assets from an LPL brokerage IRA account or an IRA account held at another financial institution into a Program account, they are required to consider, based on the information client provides, whether client will be giving up certain investment-related benefits, such as the effects of breakpoints or rights of accumulation, and has determined that the recommendation is in client’s best interest 47  because (1) greater services and/or other benefits (including discretionary management, trust services, holistic advice and planning, and automatic account rebalancing) can be achieved with the account; (2) access to the client’s chosen IAR and asset consolidation (in the case of a transfer from another financial institution); and (3) the asset-based fees and transaction charges are justified by these services and features. Notwithstanding whether a recommendation has been made, clients should understand that with respect to any assets clients decide to move into the account, clients should: (1) evaluate the investment and non-investment considerations important to the client in making the decision; (2) review and understand the fees and costs associated with the account; (3) recognize that higher net fees (if applicable) will reduce the client’s investment returns and ultimate retirement assets; and (4) understand the conflicts of interest raised by the financial benefits to LPL and its IARs resulting from the client’s decision to move assets into the account. Other Clients Clients should understand that LPL and IAR perform advisory and/or brokerage services for various other clients, and that LPL and IAR may give advice or take actions for those other clients that differ from the advice given to the client. The timing or nature of any action taken for the account may also be different. In addition, LPL and IAR may, but are not obligated to, purchase or sell or recommend for purchase or sale any security which LPL or IAR or any of their affiliates may purchase or sell for their own accounts or the account of any other client. Item 12: Brokerage Practices LPL does not receive research or other products or services other than execution from a broker-dealer in connection with client securities transactions (“soft dollar benefits”). LPL does not consider, in selecting or recommending broker-dealers, whether LPL or a related person of LPL receives client referrals from a broker- dealer or third party. For Custodied Programs, LPL requires that clients direct LPL as the sole and exclusive broker-dealer to execute transactions in the account, subject to “Trading Away from LPL in MWP and MS” below. Clients should understand that not all advisors require their clients to direct brokerage and not all wrap programs require brokerage to be directed to the sponsor. By directing brokerage to LPL, clients may be unable to achieve the most favorable execution of client transactions. In particular, clients should understand that their accounts may not be able to participate in block trades effected by a portfolio manager for its other accounts, which may result in a difference between prices charged to the account and the portfolio manager’s other accounts. For these reasons, directed brokerage may cost clients more money. The fact that LPL is both the investment advisor and sole broker-dealer on an account presents a conflict of interest. In the case of mutual funds, execution is made at the net asset value of the fund. If LPL as broker purchases a new issue security on behalf of client accounts, the execution price may include a concession to the dealers participating in the syndicate. Although LPL is not part of the syndicate and does not receive this concession, the concession is included in the price and is in addition to the overall Account Fee. LPL will aggregate transactions for a client with other clients to improve the quality of execution. When transactions are so aggregated, the actual prices applicable to the aggregated transactions will be averaged, and the account will be deemed to have purchased or sold its proportionate share of the securities involved at the average price obtained. LPL also will aggregate rebalancing transactions for an account with other accounts. Due to the large number of accounts that may be involved in rebalancing transactions on a single day, LPL may effect transactions for some accounts on one day and for other accounts on the following day or days. In such case, LPL will have discretion to sequence the accounts involved in rebalancing transactions with the goal of treating all accounts equitably over time. 48  For the Custodied Programs, LPL will reinvest dividends in accordance with LPL’s Dividend Reinvestment Program (“DRP”). Some securities held in Program accounts may be ineligible for DRP, including securities not custodied at LPL Financial. There is no requirement to participate in the DRP; clients can enroll or unenroll at any time by contacting their IAR or LPL. DRP transactions will be confirmed on at least a quarterly basis as part of the regular periodic account statement. Additional important disclosures about DRP, including eligibility, fees, how dividends are reinvested, and more can be found at lpl.com/disclosures.html. Certain orders may be blocked or subject to review by LPL before they are directed to an exchange or market maker for execution. This review may result in a delay in execution. For securities transactions, this delay may cause a difference between the execution price and the displayed quote at the time the order was entered. This delay may also result in a limit order becoming ineligible for execution. LPL reserves the right to place restrictions on Program accounts in its sole discretion, and to cancel any order that we believe would violate federal credit regulations or other regulatory limitations; however, LPL will have no responsibility or liability for failing to cancel any order. Program-Specific Brokerage Practices SAM IARs may aggregate transactions in equity, options and fixed income securities for a client. IARs may determine not to aggregate transactions, for example, based on the size of the trades, the number of client accounts, the timing of the trades, the liquidity of the securities and the discretionary or non-discretionary nature of the trades. If IARs do not aggregate orders, some clients purchasing securities around the same time may receive a less favorable price than other clients. This means that this practice of not aggregating may cost clients more money. LPL is not paid a commission or transaction charge for executing transactions in IPA accounts. The IAR is not paid a commission in the SAM Program, but LPL is paid transaction charges by the client for processing trades depending on the type of security. Trading Away from LPL in MWP and MS For the MWP and MS Programs, there may be scenarios when trades are executed with broker-dealer firms other than LPL (a “trade away” or “step out”). An MWP Subadviser who has discretion to trade fixed income portfolios for clients may choose to trade away. An MS SMA Portfolio Manager may also choose to trade away. Trading away may facilitate more favorable execution, including a more advantageous net price, than would otherwise be available. Trading away may be done to aggregate all client transactions into one or more larger “block trades” that are executed through one broker-dealer. Such block trades will be aggregated such that the client account will be deemed to have purchased or sold its proportionate share of the securities involved at the average price obtained. This can assist the Subadviser or SMA Portfolio Manager in potentially avoiding an adverse effect on the price of a security which could result from simultaneously placing a number of separate, successive, or competing client orders. Some Subadvisers and SMA Portfolio Managers have historically placed nearly all client trades with broker-dealer firms other than LPL for execution, in particular, with a fixed-income, foreign or small cap investment strategy. When securities transactions are effected through LPL, there are no brokerage commissions charged to a Program account. For trades through a broker-dealer other than LPL, the execution price will usually include a commission or fee imposed by the executing broker-dealer. Clients should understand that the client will bear any such additional trading cost, in addition to the overall Account Fee paid to LPL. The additional expenses charged by the broker-dealer executing the transaction may include commissions, mark-ups, mark-downs or “spreads” paid to executing broker dealer firm. Additionally, if a foreign currency transaction is required, there may be foreign exchange or similar fees, including but not limited to fees for foreign ordinary conversion and 49  creation of American Depositary Receipts (“ADRs”) charged by third parties as well as foreign tax charges. In many cases, the commission, mark-up, mark-down or other additional expenses charged by the executing broker-dealer or third party will be embedded in the purchase or sale price of such transactions, and not separately indicated on trade confirmations and custodial account statements provided by LPL. In evaluating whether to execute a trade through a broker-dealer other than LPL, an SMA Portfolio Manager will consider the fact that an account will not be charged an additional expenses (such as a commission) if effected directly through LPL. In evaluating whether to execute a trade through a broker-dealer other than LPL, MWP Subadvisers and SMA Portfolio Managers will consider the fact that an account will not be charged an additional expenses if effected directly through LPL. Clients should understand that LPL is not able to fully evaluate whether an MWP Subadviser or SMA Portfolio Manager is meeting its best execution obligations to clients for specific transactions when trading away, as it is not a party to such transactions and is not in a position to negotiate the price or transaction related charges with the executing broker. The responsibility to determine whether to trade away lies with the MWP Subadviser or SMA Portfolio Manager and arises out of their respective fiduciary duties to clients. Additional information regarding equity trading away practices of SMA Portfolio Managers is available on lpl.com/disclosures.html under “Market & Trading Disclosures” and “Third-Party Portfolio Manager Trading Practices.” Clients should read and understand the disclosure in Form ADV Part 2 of the applicable SMA Portfolio Manager. Item 13: Review of Accounts LPL reviews accounts using a risk-based exception reporting system that flags SAM and certain IPA accounts and creates supervision reports for MWP, MS, OMP and GWP accounts for criteria such as trading activity and concentration on a quarterly or monthly basis, depending upon the nature of the exception. LPL reviews the trading activity and concentration for certain IPA accounts by reviewing such accounts on a quarterly basis. The Chief Compliance Officer of LPL oversees the process for reviewing flagged accounts. IARs review accounts and meet with clients on a regular basis or as requested by the client, and such meetings may include review of account statements, performance information, and other information or data related to the client’s account and investment objectives. LPL provides clients with regular written reports regarding their accounts. LPL provides detailed performance information annually describing account performance and positions, with additional performance information available upon request. In addition, unless suppressed by the client, LPL sends clients trade confirmations and account statements showing transactions, positions, and deposits and withdrawals of principal and income. LPL does not send trade confirmations for systematic purchases, systematic redemptions and systematic exchanges. Portfolio values and returns shown in performance reports for the year-end time period may include mutual fund dividends paid out prior to December 31 but that were posted to the account within the first two business days of the subsequent year. The inclusion of such dividends in the year-end performance report may cause discrepancies between the report and the account statement client receives from LPL for the same period. For Custodied Programs, clients can access account statements, showing account activity and month or quarter- end positions, and confirmations of the transactions that occurred within the account through Account View. Confirmations of transactions will be consolidated in the case of rebalancing transactions. Detailed performance information is generally available in electronic form through Account View and is available on year-end statements. IARs have access to review account statements and performance information. Clients who only utilize the Prospect Tool do not receive any reporting. 50  Item 14: Client Referrals and Other Compensation Other Compensation LPL, LPL employees, and IARs receive additional compensation, business entertainment and gifts from product sponsors. However, such compensation may not be tied to the sales of any products. Compensation includes such items as gifts valued at less than $100 annually, an occasional dinner or ticket to a sporting event, or reimbursement for educational meetings, customer appreciation events or marketing or advertising initiatives, including services for identifying prospective clients. Product sponsors also pay for, or reimburse LPL for the costs associated with, education or training events that may be attended by LPL employees and IARs and for LPL-sponsored conferences and events. LPL, LPL employees and IARs also receive reimbursement from product sponsors for technology-related costs, such as those to build systems, tools and new features to aid in servicing customers. LPL receives compensation from certain third-party vendors, including technology providers and affinity partners, for conferences, educational events, and similar programs made available to IARs. These arrangements may include sponsorship fees, booth or exhibition fees, payments or participation in breakout sessions or presentations, revenue-sharing arrangements, and other forms of compensation. In exchange for such compensation, vendors may receive opportunities to promote their products or services to IARs, including conference recognition, exhibit space, participation in educational sessions, access to attendee information (which does not include email addresses), and other marketing or promotional benefits. These arrangements create a conflict of interest because LPL has a financial incentive to feature, promote, or make available certain vendors or service providers over others. IARs are not required to use any particular vendor, and participation in or exposure to vendor-sponsored events does not constitute an endorsement of the vendor or its products or services by LPL. LPL employees provide sales support resources to IARs that use LPL Programs. The compensation that LPL pays to these employees varies based on the assets in LPL’s different Programs. These employees have an incentive to promote certain Programs to IARs over other Programs. These employees also earn more compensation when IARs transition client assets from brokerage accounts to advisory accounts and have a financial incentive to encourage IARs to transition brokerage accounts to advisory. LPL receives compensation in the form of earnings on its short-term investment of cash in accounts prior to the time the cash is invested for the account. These earnings are generally known as “float.” Cash in the account would typically result from contributions to the account or sales of securities in the account. For accounts that opt out of the sweep program, the accounts may remain in free credit balances. In such cases, LPL receives compensation in the form of earnings on cash. LPL does not share this compensation with the IAR. In the event a trade error occurs in an account, and such error is determined to be caused by LPL, LPL typically will cancel the trade and remove the resulting monetary loss to the client from the account. If a trade correction is required as a result of client (e.g., if client fails to make full payment for purchases or fails to deliver negotiable securities for liquidations before trade settlement), LPL typically will cancel the trade and any resulting monetary loss will be borne by the client. In the case of a trade that requires a correction as described above and that resulted in a monetary gain to the client, such gain will be removed from the account and can result in a financial benefit to LPL. 51  Client Referrals From time to time, LPL and/or its IARs enter into arrangements with clients, third parties or other financial intermediaries for lead generation, client referrals or solicitation for accounts (collectively, “solicitation arrangements”). These solicitation arrangements range from largely impersonal referrals to specific client introductions to LPL and its IARs. Under solicitation arrangements, the third parties and financial intermediaries are independent contractors. In most cases, third parties are not advisory clients of LPL and do not refer clients based on their experience with LPL as advisory clients. The compensation paid under the solicitation arrangements is structured in various ways, including a one-time fee, a flat fee per lead or referral, and sharing a portion of the ongoing Account Fee. LPL and its IARs have generally entered into the following types of referral arrangements: • Referral Networks. Some third parties operate referral networks. Referral networks may present potential clients with a list of possible investing firms and investment adviser representatives, or may direct potential clients specifically only to LPL and its IARs. Some referral networks receive a flat fee per referral and/or an ongoing fee, while others share a portion of the ongoing Account Fee; • Professional Cross Referrals. Some IARs have relationships with other professionals, such as accountants, lawyers or tax advisors, in which the professionals refer clients to IARs and in exchange the IARs refer clients to the professionals for their services. The cross-referral arrangement is a quid pro quo relationship that can give rise to similar conflicts as compensated referrals; • Client Referral Awards. Investment advisory clients of LPL’s IARs refer new advisory clients to their IARs. Sometimes, in connection with these referrals, IARs pay their clients one-time, non-cash gifts like gift cards or tickets to events for the clients referring to them new advisory clients; • Unaffiliated Financial Institutions. LPL and its IARs offer advisory services on the premises of unaffiliated financial institutions, like banks or credit unions. These financial institutions refer clients to LPL. See more about LPL’s relationship with financial institutions under “Unaffiliated Financial Institutions” below; and • Other Arrangements. LPL and its IARs may enter into other arrangements in the future that provide for compensation similar to one or more of the types of arrangements described above. Depending on the solicitor’s arrangement with LPL, a solicitor may not be compensated for referring a client who opens a brokerage account rather than an advisory account, and as a result may encourage the client to open an advisory account instead of a brokerage account. Solicitation arrangements give rise to material conflicts of interest because the referring party has a financial incentive to introduce new investment advisory clients to LPL and its IARs. Solicitors may also have other conflicts of interest with respect to a particular IAR or may be associated with LPL in another way. Clients who are introduced to LPL and its IARs through a solicitation arrangement receive specific disclosures at the time of the introduction. If a client receives such disclosures, the client should review them carefully to understand the details of LPL’s arrangements with the person introducing the client to LPL. LPL’s participation in these referral arrangements does not diminish its fiduciary obligations to its clients. Strategist and Manager Compensation LPL and BlackRock Advisors, LLC (“BlackRock”) entered into an agreement pursuant to which BlackRock agreed to pay LPL an annual fixed amount for analytical data pertaining to BlackRock proprietary ETFs on LPL’s platform during the term of the agreement. BlackRock Investment Management, LLC, an affiliate of BlackRock, is one of the available options for MWP Portfolio Strategist. BlackRock is also affiliated with mutual funds and ETFs that could be included in the portfolios it designs and those model portfolios designed by LPL or the MWP Portfolio 52  Strategists. Because LPL benefits from these payments, the amount of which is significant, LPL’s financial interests conflict with its ability to use strictly objective factors in making the selection and retention of a BlackRock affiliate as an MWP Portfolio Strategist and its selection of ETFs in its portfolios. However, LPL did not agree to guarantee that BlackRock’s affiliated portfolios will be used for any MWP account. In addition, neither LPL nor the MWP Portfolio Strategists are required to include BlackRock-affiliated funds or ETFs in their portfolios. The BlackRock affiliate is required to satisfy the same review as all other third-party MWP Portfolio Strategists. LPL has sole discretion to select MWP Portfolio Strategists that are made available. If a GWP model portfolio in the GWP Program is selected that only consists of ETFs and/or mutual funds within the same fund family or within affiliated fund families, the GWP Portfolio Strategist will select only those funds within the affiliated fund families. Conflicts Related to LPL Compensation to IAR The IAR recommending an advisory service receives compensation from LPL. In most cases, LPL has a compensation arrangement directly with the IAR. (In certain cases, LPL has entered into an agreement with a financial institution offering LPL’s advisory services on its bank or credit union premises, as described further below.) LPL typically compensates IARs pursuant to an independent contractor agreement and not as an employee. This compensation includes all or a portion of the advisory fee and, such portion received by IAR may be more than what IAR would receive at another investment advisor firm. All compensation paid to the IAR will be the sole responsibility of LPL and is payable by LPL out of the investment advisory fee clients pay to LPL. IARs have a financial incentive to negotiate fee arrangements that maximize their compensation. Where an IAR engages LPL Research to provide investment management services directly to clients, the IAR is responsible for paying for such services which may result in the client being charged a higher Account Fee by the IAR than if LPL Research were not providing services. In some programs, LPL charges a negotiable advisory fee for itself plus a fee for third-party managers that is not negotiable. Differences in fees for third-party managers, and the absence of such fees in other programs, creates a conflict of interest for the IARs insofar as IARs can negotiate a higher LPL advisory fee for a program or strategy with lower or no separate manager fee than they could for an account subject to a higher third-party manager. The amount received by an IAR as a result of a client’s participation in any particular program offered by LPL often is more than the IAR would have received if the client participated in other programs, paid third-party manager fees, or paid separately for investment advice, brokerage and other services covered by the Account Fee. Such compensation includes other types of compensation, such as bonuses, awards or other things of value offered by LPL to the IAR. In particular, LPL pays its IARs in different ways, for example: • payments based on production • equity awards from LPL’s parent company, LPL Financial Holdings Inc., consisting of awards of either restricted stock units (a promise to deliver stock in the future) or stock options to purchase stock, in each case subject to satisfaction of vesting and other conditions • reimbursement or credits of fees that IARs pay to LPL for items such as administrative services, or technology fees • free or reduced-cost marketing materials • payments in connection with the transition of association from another broker-dealer or investment advisor firm to LPL 53  • advances of advisory fees • payments in the form of repayable or forgivable loans • attendance at LPL conferences and events. Some of these forms of compensation, particularly equity awards of LPL Financial Holdings Inc., give IARs a financial interest in the success of LPL. IARs who have a financial interest in the success of LPL have an incentive to recommend investments that are more profitable for LPL, regardless of whether the IARs share in that compensation directly. Note that LPL has a dedicated team of employee IARs in its offices who service certain accounts, and also a small subset of IARs who operate their own offices or are located on the premises of certain financial institutions and are employees of LPL Employee Services, LLC, an LPL-affiliated company. In such cases, the IARs are compensated as employees, and such compensation can include a salary, bonus and other things of value as set out above. LPL also charges IARs various fees under its independent contractor agreement, for example, for administrative, custody and clearing services to accounts, technology and licensing. In certain cases, LPL pays IARs this compensation, and charges IARs these fees, based on the IAR’s overall business production and/or on the amount of assets serviced in LPL advisory relationships. When compensation or fees charged is based on the level of production or advisory assets of an IAR, the IAR has a financial incentive to meet those production or asset levels. The compensation and fee structure may be more favorable than what the IAR would receive at another investment advisor firm, creating an incentive for the IAR to become and remain associated with LPL. The compensation the IAR receives from LPL for recommending certain LPL Programs could be more than if the client participated in other LPL programs, programs of other investment advisors or paid separately for investment advice, brokerage and other client services, and likewise, the fees that IAR pays to LPL could be less for certain LPL Programs than other LPL programs or services. The IAR has a financial incentive to recommend advisory services in SAM over other programs and services, since the IAR can earn more for offering SAM at a lower overall fee rate than for a program offering a third-party manager. However, an IAR may only recommend a program or service that they believe is suitable and in the best interests of a client in accordance with the applicable standards under the Advisers Act or other applicable law. LPL has systems in place to review accounts for suitability over the course of the advisory relationship. LPL also provides various benefits and/or payments to IARs that are newly associated with LPL to assist the IAR with the costs (including foregone revenues during account transition) associated with transitioning his or her business to LPL (collectively referred to as “Transition Assistance”). The proceeds of such Transition Assistance payments are intended to be used for a variety of purposes, including but not necessarily limited to, providing working capital to assist in funding the IAR’s business, satisfying any outstanding debt owed to the IAR’s prior firm, offsetting account transfer fees (ACATs) as a result of the IAR’s clients transitioning to LPL’s custodial platform, technology set-up fees, marketing and mailing costs, stationary and licensure transfer fees, moving expenses, office space expenses, staffing support and termination fees associated with moving accounts. The amount of the Transition Assistance payments is often significant in relation to the overall revenue earned or compensation received by the IAR at his or her prior firm. Such payments are generally based on the size of the IAR’s business established at his or her prior firm, for example, a percentage of the revenue earned or eligible assets serviced by the IAR at the prior firm, and, in certain cases, on the amount of the IAR’s client assets that are transferred to LPL above an agreed-upon threshold. These payments are generally in the form of payments or loans to the new LPL IAR with favorable interest rate terms as permitted under applicable law, which are paid by LPL or forgiven by LPL based on years of service with LPL (e.g., if the IAR remains with LPL for 5 years) 54  and/or the scope of business engaged in with LPL. LPL does not verify that any payments made are actually used for such transition costs. In addition, existing IARs are eligible to receive financial assistance from LPL in connection with transferring existing client accounts serviced at an approved third-party investment program to an on-platform LPL advisory or brokerage account (“Operational Assistance”). These payments are typically calculated as a percentage of assets transferred to LPL up to 0.15%, but in some cases may involve a flat amount up to $350 per transferred account and are also generally payable in the form of payments or loans to the IAR that are forgivable based on years of service with LPL. While the loans are intended to offset bona fide time and effort incurred by IARs in identifying and coordinating transfers, the loans can create an incentive for IARs to recommend that clients transfer their assets to on-platform LPL advisory and brokerage accounts. The receipt of Transition Assistance or Operational Assistance creates a conflict of interest in that an IAR has a financial incentive to recommend that a client open and maintain an account with the IAR and LPL for advisory, brokerage and/or custody services, and to recommend switching investment products or services where a client’s current investment options are either not available through LPL or are maintained through a third-party investment program, to receive the Transition Assistance or Operational Assistance benefit or payment. LPL and its IARs attempt to mitigate these conflicts of interest by evaluating and recommending that clients use LPL’s services based on the benefits that such services provide to clients, rather than the Transition Assistance or Operational Assistance earned by any particular IAR. However, clients should be aware of this conflict and take it into consideration in making a decision whether to establish or maintain a relationship with LPL, or to transfer an existing third-party investment program account to LPL. If LPL makes a payment or loan to a new or existing IAR, there is also a conflict of interest because LPL’s interest in collecting on the payment or loan affects its ability to objectively supervise the IAR. Ownership Interest in Doing-Business-As (“DBA”) Entities Some IARs operate through independent practices with a separate Doing-Business-As (or “DBA”) designation. In some cases, LPL partially or wholly owns such practices, and has a financial interest in the business success of the DBA as a whole, or in a particular element of the DBA via specific ownership interests in its brokerage, advisory, insurance, or other financial services business (or any combination thereof). Clients should ask their IAR about the extent to which LPL has a financial interest in their practice. Unaffiliated Financial Institutions LPL and its IARs offer advisory services on the premises of unaffiliated financial institutions, like banks or credit unions. When services are offered in a bank or credit union, the advisory services are offered by LPL and not the financial institution. Any securities recommended as part of the investment advice are not guaranteed by the financial institution, or insured by the FDIC or any other federal or state deposit guarantee fund relating to financial institutions. LPL has entered into agreements with the financial institutions pursuant to which LPL typically shares compensation, including a portion of the Account Fee, with the financial institution for benefits including but not limited to the use of the financial institution’s facilities and client referrals. Instead of paying the IAR the portion of the Account Fee as described above, LPL shares the Account Fee with the financial institution, and the financial institution pays part of that amount to the IAR based on a compensation plan between the IAR and the financial institution. The financial institution establishes the compensation plan for the IAR, which is subject to approval by LPL. The compensation plan determines how the IAR’s compensation is structured. IAR will have a financial incentive to recommend a particular service or product if under the compensation plan the 55  recommended product will result in more compensation to the IAR than another product or service, including advisory versus brokerage services. All IAR recommendations remain subject to the suitability and best interest standards described in “Conflicts Related to LPL Compensation to IAR” above. LPL also has agreements to provide similar services at financial institutions in which compensation is not shared with the financial institution whereby a portion of the Account Fee is paid directly to the IAR. If IAR is an employee of the financial institution where it provides services to accounts, LPL typically shares with the financial institution between 75% to 100% of the Account Fee, after LPL retains its portion of the Account Fee for its administrative services. IAR (an employee of the financial institution) will be compensated (e.g. in the form of salary, bonus, commissions, etc.) by the financial institution based on the specific agreement and/or compensation plan between the financial institution and the IAR. If IAR is not an employee of the financial institution where it provides services to accounts, LPL typically shares directly with IAR, after deduction of LPL’s portion, between 25% to 100% of the Account Fee, and with the financial institution between 0% to 75%. All compensation paid to IAR or the financial institution will be the sole responsibility of LPL and will not result in any increase in the Account Fee that the client pays to LPL. Some of these financial institutions are affiliated with investment product sponsors (such as mutual fund sponsors) or offer CDs. An IAR located on the premises of a financial institution has a potential conflict of interest when IAR encourages clients to invest in that financial institution’s CDs or proprietary investment products, such as mutual funds and structured products. If IAR is an employee of and/or provides services on the premises of one of these financial institutions, the financial institution has a financial incentive for the IAR to select the financial institution’s affiliated investment products and/or CDs over non-affiliated products. When an affiliated investment product is selected for an account, the financial institution receives a portion of the Account Fee pursuant to the agreement between LPL and the financial institution and its affiliate receives fees or other benefits from the affiliated investment product. Because affiliates of the financial institution earn fees and other benefits from the affiliated products, the financial institution has an incentive to select its affiliated product based on the compensation and benefits its affiliates receive rather than on a client’s needs. In addition, because mutual funds benefit from scale, the financial institution and its affiliated companies have an interest in the mutual funds gaining greater assets. Certain financial institutions provide a credit in an amount equal to the mutual fund advisory and administrative services fees for affiliated investment products. We update this information from time to time on lpl.com/disclosures.html. For more information, click on “Account Disclosures, Agreements, Fee Schedules & Conflicts of Interest,” and then “Third Party Compensation and Related Conflicts of Interest.” Note that the IAR does not receive additional compensation from the financial institution for selecting affiliated products and the IAR remains subject to the suitability and best interest standards described above with respect to recommendations made to clients. LPL reviews and selects investment products for the Programs and sometimes removes or replaces an investment product. There is a conflict of interest because the business relationship between LPL and the financial institution could affect LPL’s ability to objectively select and determine whether to continue to maintain these investment products in the Program. However, LPL only approves investment products that it determines are suitable and in the best interests of clients using the Programs depending on clients’ investment objectives and risk tolerances. Some of these financial institutions are affiliated with investment advisory firms that act as an Asset Manager. An IAR offering advisory services on the premises of a financial institution has a potential conflict of interest when the IAR recommends that clients utilize an affiliated Asset Manager because the financial institution has the ability to influence the IAR’s compensation and employment status. All such recommendations remain subject 56  to the suitability and best interest standards described above. Affiliated Asset Managers sometimes receive a reduced Manager Fee or do not receive a Manager Fee at all. This is often because the Asset Manager has included proprietary or affiliated mutual funds or ETFs in the model portfolio which charges a separate fee. The absence of a Manager Fee creates a conflict of interest for the IARs insofar as IARs can negotiate a higher LPL Advisory Fee than they could for an account subject to a higher third-party Manager Fee. In addition, Asset Managers benefit from having increased assets under management even if they do not charge a Manager Fee. If client’s financial advisor is an employee of Community Bank, client should note that the selection of Nottingham Advisors, a wholly-owned subsidiary of Community Bank, as a MS SMA Portfolio Manager or Model Advisor presents a conflict of interest because it gives an incentive to client’s financial advisor for the selection of an affiliated advisory firm based on the compensation received by Nottingham Advisors rather than on a client’s needs. If client’s IAR is an employee of M&T Bank (M&T Financial Professional), client should note that certain investment strategies and model portfolios available in the MWP Program are provided by M&T Bank’s affiliate, Wilmington Trust Investment Advisors, Inc. (WTIA). Unlike other third-party investment strategies and model portfolios used in accounts advised by M&T Financial Professionals, WTIA does not charge LPL a Manager Fee for WTIA model portfolios used in those accounts. Clients also should be aware that certain of the WTIA model portfolios include mutual funds that are advised and/or subadvised by affiliates of M&T Bank, including WTIA. In some model portfolios, these affiliated funds currently can represent up to 65% of the funds in the portfolio. Because WTIA and/or other affiliates of M&T Bank earn fees and other compensation from the affiliated mutual funds, WTIA has an incentive to select its affiliated funds for such model portfolios due to the compensation and benefits it and/or its affiliates receive(s). If client’s account is a retirement account, the account will receive a credit in an amount equal to the mutual fund advisory and administrative services fees that M&T affiliates receive in connection with the affiliated mutual funds held in the account. If client’s financial advisor is an employee of Commerce Bank (“Commerce Financial Professional”), client should note that certain model portfolios in MS are provided by a division of the Bank, Commerce Trust. As an MS model provider, Commerce Trust in some cases charges LPL clients a fee. However, Commerce Trust will not charge this fee to accounts advised by Commerce Financial Professionals. Clients also should be aware that the Commerce Trust model portfolios include mutual funds that are advised and/or sub-advised by its affiliate, Commerce Investment Advisors, Inc., a subsidiary of Commerce Bank. In some model portfolios, these affiliated funds can represent 0 to 100% of the funds in the portfolio. Commerce Trust has an incentive to select affiliated funds for the model portfolios due to the fees and other compensation and benefits its affiliate receives. An account will receive a credit in an amount equal to the mutual fund advisory and administrative services fees that Commerce Bank affiliates receive in connection with the affiliated mutual funds held in client’s account. If client’s IAR is associated with Wintrust Investments, LLC (“Wintrust Financial Professional”) client should note that certain model portfolios available were created by Great Lakes Advisors, LLC (“GLA”), an affiliate of Wintrust Investments. GLA in some cases charges LPL clients a Manager Fee. However, GLA will not charge this fee to accounts advised by Wintrust Financial Professionals. client’s IAR has an incentive to select the GLA model portfolios for client’s account due to their association with Wintrust Investments, which has the ability to influence client’s Financial Advisor’s compensation and employment status. However, client’s IAR is only permitted to recommend a model portfolio that they believe is appropriate for client and in client’s best interest. LPL reviews and selects Asset Managers and sometimes elects to remove or replace an Asset Manager . There is a conflict of interest because the business relationship between LPL and these unaffiliated financial institutions 57  affects LPL’s ability to objectively select and determine whether to continue to maintain their managed strategies on the MS Platform. LPL also provides other forms of compensation to financial institutions, such as bonuses, awards or other things of value offered by LPL to the financial institution. For example, LPL pays financial institutions based on production, in the form of repayable or forgivable loans, reimbursement of fees that LPL charges for items such as administrative services, and other things of value such as free or reduced-cost marketing materials, transition assistance for changing association from another broker-dealer or investment advisor firm to LPL, advances of advisory fees, and/or attendance at LPL’s national conference or top producer forums and events. LPL can pay this compensation based on overall business production and/or on the amount of assets serviced in LPL Programs. Financial institutions are also eligible to receive Operational Assistance (as defined above) from LPL to assist with offsetting time and expense in coordinating transfers of client accounts from third party investment platforms to LPL’s platform. The compensation is typically calculated and payable to the financial institution as a percentage of assets transferred to LPL up to 0.15%, but in some cases will be a flat-dollar amount per transferred account with a maximum of up to $350 per account. As a result, the financial institution and IAR have a financial incentive to recommend the Program and services that will result in the greatest compensation. If LPL makes a loan to a new or existing financial institution, there is also a conflict of interest because LPL’s interest in collecting on the loan affects its ability to objectively supervise an IAR at that financial institution. In addition, financial institution employees who are not associated with LPL often refer prospective customers of the financial institution to IARs working in the financial institutions. Those employees frequently receive a nominal referral fee from the financial institution (typically up to $25) as compensation for each referral and such referral programs are governed by Regulation R of the Gramm-Leach-Bliley Act. Employees of trust departments at certain financial institutions are authorized under the terms of applicable trust arrangements to delegate investment advisory responsibility to LPL and to receive a portion of the compensation earned in connection with investment advisory services provided to these accounts through LPL. These amounts are negotiated and vary but often amount to a significant portion of the total fees paid for investment advisory services. Item 15: Custody For the Custodied Programs, LPL is a qualified custodian (as defined in Rule 206(4)-2 under the Advisers Act) and maintains custody of client funds and securities in a separate account for each client under the client’s name. As a qualified custodian, LPL sends account statements showing all transactions, positions, and all deposits and withdrawals of principal and income. LPL sends account statements periodically when the account has had activity or quarterly if there has been no activity. Clients should carefully review those account statements. Although most securities available in accounts are custodied at LPL, there are certain securities managed as part of the account that are held at third parties, and not at LPL. For example, variable annuities, hedge funds and managed futures are often held directly with the investment sponsor. For those outside positions, client will receive confirmations and statements directly from the investment sponsor. For some outside positions not custodied at LPL, LPL receives information (e.g., number of shares held and market value) from the investment sponsor and displays that information on statements and reports prepared by LPL. Such information also can be used to calculate performance in performance reports prepared by LPL. Although LPL believes that the information it receives from the investment sponsors is reliable, LPL recommends that clients refer to the statements and reports received directly from the investment sponsor and compare them with the information provided in any statements or reports from LPL. The statements and reports clients receive 58  from LPL with respect to outside positions should not replace the statements and reports clients receive directly from the investment sponsor. For the IPA Program, client assets are typically maintained at a custodian other than LPL. For example, IARs provide management services under the IPA program for participant self-directed retirement plan accounts custodied at Charles Schwab or TIAA-CREF. The retirement plan sponsor (e.g., the client’s employer) or the client is responsible for selecting the custodian for retirement plan assets to the extent permitted by the plan. Item 16: Investment Discretion The level of investment discretion varies by Program. By executing the applicable Client Agreement, clients will grant discretion over their assets in the Programs as described below: Program Discretion SAM Clients should reference their Client Agreement to determine the specific discretion granted to LPL, through the IAR. Typically, LPL, through the IAR, has discretion to purchase and sell permitted investments, to purchase and sell subaccounts within variable annuities, and to liquidate previously purchased investments, in each case pursuant to investment objectives chosen by the client. Permitted investment types include no-load and load-waived mutual funds, UITs, closed-end funds, ETFs, equities, fixed income and CDs, hedge funds, managed futures, REITs, BDCs, structured products and options. Additional paperwork and approval are sometimes required to invest in certain products. The client may limit the IAR’s discretion or elect that the IAR manage the account on a non-discretionary basis, so that the client directs the purchase and sale of securities in the account, by contacting their IAR or LPL. Additional paperwork may be required to change the IAR’s discretion. MWP LPL and the IAR provide advisory services on a discretionary basis by selecting one or more model portfolios designed by LPL Research or a Portfolio Strategist consistent with the client’s stated investment objective. Model portfolios may contain mutual funds, ETFs, ETNs, closed-end funds, equities, or fixed-income securities. The IAR provides ongoing advice on the selection or replacement of a model portfolio based on the client’s individual needs. The Portfolio Strategist has discretion to select and make changes to the securities within a portfolio. LPL and IAR have discretion to buy and sell securities in an MWP account according to the portfolio selected and liquidate previously purchased securities that are transferred into an MWP account. MWP Subadvisers have discretion to make decisions about how to implement their portfolios, including decisions on purchasing and selling fixed-income securities, executing trades through brokerage firms selected by the MWP Subadviser and rebalancing the assets in the MWP account allocated to their models, which may occur on a different frequency than as determined by the Overlay Portfolio Manager. MWP Subadvisers have discretion whether to consider state preferences (if client provides to IAR) when selecting from the inventory of bonds, if applicable (though this is not guaranteed). The discretion to consider state preferences is not intended as tax advice, and neither LPL nor any MWP Subadviser represents in any manner that implementation of state preferences will achieve tax-advantaged returns. 59  Except for LPL, IAR and any MWP Subadvisers, an MWP Portfolio Strategist does not have discretion from the client to implement the MWP portfolio. MS In the MS Program, the IAR provides advisory services on a non-discretionary basis. For the MS Model Provider Platform, LPL provides ongoing discretionary investment advice regarding the investment, reinvestment, and the rebalancing of account assets in accordance with the model portfolio selected by the client. For the MS SMA Platform, the IAR assists the client to determine the client’s investment objectives and risk/return preferences, to identify any investment restrictions on the management of the account, and to select an investment strategy and SMA Portfolio Manager. Changes cannot be made to a model portfolio, the investment strategy or the SMA Portfolio Manager without the client’s consent. OMP In the OMP Program, the IAR provides advisory services on a discretionary basis and selects a model portfolio of mutual funds designed by LPL Research consistent with the client’s stated investment objective. LPL sometimes deviates from the model portfolio in an OMP account, in which it is not possible or impractical to be invested in all of a model’s holdings, for example in a smaller account. GWP In the GWP Program, the IAR and LPL provide advisory services on a discretionary basis, which includes the authority to buy and sell from a list of ETFs, or in the future open-end mutual funds, to the extent selected by LPL Research in accordance with the GWP model portfolios described in Item 8 above. IARs and LPL also have discretion to liquidate previously purchased non-model securities that are transferred into the account. LPL expects to closely track the model portfolios, applying discretion only to address particular account issues, including tax loss harvesting, short-term gain avoidance, cash inflows and outflows, and investment restrictions placed on the account. LPL sometimes also deviates from the model portfolio in a GWP account, in which it is not possible or impractical to be invested in all of a model’s holdings, for example in a smaller account. IPA In the IPA Program, the IAR provides advisory services on a discretionary basis with respect to the purchase and sale of securities in the account pursuant to investment objectives chosen by the client, and to liquidate previously purchased securities in the client’s account. In limited circumstances, LPL and the client may agree to limit this grant of authority to non-discretionary trading on an accommodation basis. With respect to financial planning and consulting services, LPL and the IAR do not have any discretionary investment authority, and do not implement or monitor any recommendations provided to clients. Item 17: Voting Client Securities Responsibility for voting client securities varies by Program, as described below. Programs Where LPL Does Not Accept Voting Authority In the SAM, GWP and IPA Programs, LPL and IARs do not accept proxy voting authority to vote client securities or exercise corporate actions with respect to issuers held in an account. Clients retain the right to vote all proxies that are solicited for securities held in such accounts. In the SAM and GWP Programs, clients will receive proxies or other solicitations from LPL. For IPA accounts, clients will receive information regarding proxy voting or other solicitations from the third-party custodian. 60  In the case of the MS SMA Platform, the SMA Portfolio Manager, and not LPL, is responsible for voting proxies or exercising corporate actions with respect to issuers held in an account, unless a client directs otherwise. LPL does not assume responsibility for directing or monitoring the SMA Portfolio Manager’s proxy voting decisions or proxy voting policies, including for compliance with applicable laws and proxy voting requirements. If clients have questions regarding a solicitation, they should contact the contact person identified in the proxy materials or their IAR. Programs Where LPL Accepts Voting Authority In the MWP Program, the MS Model Provider Platform, and the OMP Program, LPL will vote proxies on the client’s behalf unless a client instructs otherwise. In the MWP Program and the MS Model Provider Platform, LPL will exercise corporate actions on the client’s behalf unless a client instructs otherwise. LPL has adopted policies and procedures in order for LPL to vote securities in the best interest of clients. LPL engages third-party vendor(s) to make proxy voting recommendations and handle the administrative functions of voting proxies. Although LPL retains authority to vote client proxies for certain Programs, it is LPL’s general policy to vote according to the recommendations of its third-party proxy advisor vendor, so long as LPL reasonably determines that doing so is in the client’s best interest. Any exceptions to this general policy are referred to LPL Research, which makes the determination as to whether or how to vote the proxy in accordance with the best interest of the client. For the OMP Program, LPL’s proxy voting policies and procedures state that LPL will vote proxies in all instances in accordance with recommendations from Glass, Lewis & Co., a third-party proxy advisory services company, for any securities held in your account, except to the extent otherwise prohibited by law. For the avoidance of doubt, in the event that Glass, Lewis & Co. does not provide a recommendation, LPL will abstain from voting in that proxy campaign. In the case of voluntary corporate actions, LPL intends to follow the instructions or default election of MS Model Advisors or the MWP Portfolio Strategist without reviewing individual client interests, unless LPL believes that such instructions are overtly contrary to our clients’ best interests. In such case, LPL will determine whether or how to act consistent with the best interest of our clients. Where LPL votes client proxies and the client is an employee benefit plan subject to ERISA, LPL will vote client proxies in accordance with LPL’s obligations under ERISA and applicable Department of Labor Regulations. Proxy Policies and Procedures A copy of LPL’s proxy voting policies is available upon request to the client’s IAR. A client can obtain information about how LPL voted with respect to securities held in the client’s account by contacting the IAR. Proxy Material Reimbursements (Custodied Programs Only) If LPL does not accept voting authority, or where client has elected to retain the right and obligation to vote proxies and receive mutual fund shareholder reports, LPL is reimbursed by the proxy issuer or mutual fund for the delivery costs to send proxies and shareholder reports to the client. The maximum fee that can be charged for delivery is set by New York Stock Exchange (NYSE) rules. If LPL uses a vendor to perform the delivery, the vendor seeks reimbursement from the proxy issuer or mutual fund on LPL’s behalf and in certain cases remits a portion of the reimbursement to LPL. 61  Authority to Act on Legal Proceedings LPL, IAR or any applicable Asset Manager shall not be obligated to render any advice or take any action on behalf of Client with respect to any legal proceedings, including bankruptcies, involving securities or other investments held in any Program account, or the issuers thereof. Client hereby retains the right and obligation to take action with respect to legal proceedings relating to securities held in a Program account. Item 18: Financial Information LPL is a qualified custodian as defined in Rule 206(4)-2 under the Advisers Act and is therefore not required to include a balance sheet for its most recent financial fiscal year. LPL is not aware of any financial condition that is reasonably likely to impair its ability to meet its contractual commitments to clients, nor has it been the subject of a bankruptcy petition at any time during the past ten years. Brochure Supplements Accompanying this Brochure are Brochure Supplements for individual employees or officers of LPL. Note that although these individuals are responsible for investment advice provided by LPL and may meet with clients from time to time, they are not the IARs responsible for the ongoing individualized investment advice provided to a particular client. For more information about the IAR managing the account, client should refer to the Brochure Supplement for the IAR, which should have been provided by the IAR along with this Brochure at the time client opened the account. If client did not receive a Brochure Supplement for the IAR, the client should contact the IAR or LPL at lplfinancial.adv@lplfinancial.com. 62