Sentinel Advisory Group, subsidiary of MD Global Partners, LLC (the “Firm” or “(MDGP”) is a registered broker dealer with the Financial Industry Regulatory Authority (“FINRA”) and we are required under Regulation Best Interest (“Reg BI”) to send you this additional Disclosure Letter. We are required to send these disclosures to you prior to making a recommendation to you regarding your potential investments. This letter will provide you with details relating to our Firm and the relationship between you, the Firm, and the Firm’s Registered Representatives.
In connection with establishing this account and completing your customer agreement, you have been given the opportunity to provide to Sentinel Advisory Group, subsidiary of MD Global Partners, your financial profile, investment experience, investment objectives, and other information for your account(s). Sentinel Advisory Group understands that you may have separate investment objectives for different accounts. You have been given the opportunity to provide this information so that Sentinel Advisory Group may reasonably rely on this information. When our agent(s) provide you with investment recommendations supervisory and compliance personnel may review your profile to ensure the activity in your account is consistent with your objectives. Our supervisory or compliance personnel may contact you from time to time to further verify that all activity in your account is transacted in the manner you choose.
Our clearing agent, RBC Correspondent Services LLC (“RBC”) offers On-Line Access to your account and it is recommended that you sign up for on-line access. You should check your account balances and account positions on a daily basis and review all trades, especially if you choose to work on margin or if you have options or short positions in your account. For online access, please call your broker or dial our main office at 202-794-9733.
It is very important to review your trade confirmations and account statements. Your monthly account statement will provide you with a detailed record of every transaction in your account, as well as your current balance as of the date of the statement. It also provides the current equity value compared to the equity value in the prior month to enable you to review the month-to-month performance of your account. Should you have any questions pertaining to any transaction, you should call your broker immediately.
Every time you enter a security transaction, RBC will send you a confirmation of that trade. The confirmation will include the details of your transaction and should be reviewed for accuracy upon receipt. Your trade confirmation will reflect a commission. Commissions are negotiated on a transactional basis and can range from a fixed commission of $30.00 regardless of amount invested, up to 5% of the dollar value of the transaction. Talk to your broker about the commission you are being charged on every trade. All of these documents should be reviewed immediately upon receipt and regularly thereafter. You should contact our compliance department in the event that any information contained in those documents is incorrect or in the event you wish to contest any activity in your account(s).
Minimum Commission described on your trade confirmation as an “Additional Fixed Commission” on every securities transaction executed in your account in the amount of $30.00 regardless of the dollar amount and frequency of transactions. The “Additional Fixed Commission” is commission-based revenue to the Firm and the Firm may share such revenue with your broker. You may elect to be charged commissions on an agency basis or a riskless principal (otherwise known as markup/markdown) basis, which is in addition to the Additional Fixed Commission. An agency transaction discloses the commission on the trade confirmation as a flat dollar amount in the lower right side of your trade confirmation, i.e. $100.00 plus the additional fixed commission of $30.00.
A Riskless Principal Transaction:
In a riskless principal transaction, the commission is shown as a markup or markdown, is built into the price of the stock, and sets forth the total cost basis of the transaction on the trade confirmation. In order to calculate the commission charged on a riskless principal (markup/markdown) basis, look next to where it says mark-up /mark-down and multiply that amount by the number of shares purchased or sold. For example, if you purchase 1000 shares of stock and the mark-up/ mark-down reads .1 or .10, that equates to 1000 x 1 = $100.00. Please speak with your tax professional and your broker to decide which method is right for you.
Sentinel Advisory Group, subsidiary of MD Global Partners, LLC (the “Firm” or “(MDGP”), obtains information from you, the client, regarding time horizon. In an effort to clarify, our interpretation of time horizon is as follows: The length of time over which an investment is made or held before it is liquidated. Time horizon is not interpreted as a time for need of the investment funds to be returned but rather as an intention on the time in which you wish hold your investment.
Clients are charged an Additional Fixed Commission for every transaction in their account of $30.00. The fixed commission may result in additional revenue to the firm.
Sentinel Advisory Group, subsidiary of MD Global Partners, LLC (the “Firm” or “(MDGP”) offers a multitude of investment products. While your representative may make a recommendation for a certain type of security, please note that you have choices of products other than what is being recommended to you and you should engage your representatives with questions regarding other securities and other investment options, which are available to you. You should also be aware that other investment products, fee structures and investment strategies could result in lower costs to you.
Your representative is compensated for each transaction (i.e. buying or selling securities on your behalf). As such, there is an inherent conflict which is created when your representative makes a recommendation to you. Under Reg BI, your representative will use the Care clause to ensure that recommendations being made to you are in your best interest pursuant to various information provided by you to your representative including your financial condition, investment objectives, risk tolerance, tax status, investment experience and other general information provided by you.
Securities Offered through MD Global Partners, LLC | Member FINRA\SIPC
You may have indicated speculation or growth as an investment objective for your account. This reflects an aggressive approach which entails active trading. Actively traded accounts in general are speculative in nature and typically attempt to profit from short term swings in the market and/or of individual securities, generally accrue higher costs and results in greater risks to the investor. This trading may not be suitable for all investors. Speculative investing should only be carried out with capital in which you are willing to risk losing a substantial portion, if not all of your investment funds.
Accounts have significantly higher turnover ratios and commission-to-equity ratios than accounts in which the customer merely buys and holds the position. Turnover ratios measure how often – on average – the securities in a customer’s account are traded in a year. The securities purchased and the account’s average equity are analyzed and the turnover ratio (TR) is the “litmus test” to determine active accounts. Annualized turnover ratio of 6 or greater is likely to be considered excessive for accounts with conservative investment objectives. You acknowledge and agree that your speculative natured account may be trading with a TR of 6 or substantially greater and that you do not consider this to be excessive in light of your investment strategies and objectives. The commission-to-equity ratio is obtained by dividing the total commission charges (including markups) by the average equity in the customer’s account.
An investment objective or risk tolerance of speculation involves a high degree of risk and may result in your account to beings actively traded. The performance of your account may be significantly higher or lower than the performance of the stock market or the various indices that may be tied to stock market performance, including the Dow Jones Industrials, the Standard& Poor’s Index or any other index of the value or performance of the stock market. This is considered the “well managed account theory”. Because of the nature of your account the returns on your investments may not be consistent with the stock market indexes and the performance of your account may be substantially more or less than what may be achieved under a well-managed account theory.
Active accounts receive statements every month, and confirmations are mailed after every trade. The specific trade/transaction information is disclosed on trade confirmations and monthly account statements, including transaction date, share amount, markup/mark down, commission, margin rates and interest charged as well as execution price. Active accounts can involve concentrated positions, meaning that there is a significant portion of the assets in the account in a few securities. This can increase the volatility in the account’s value.
If you do not receive statements and confirmations, or if you have any comments or concerns about account objectives, risk tolerance or the level of activity, please feel free to contact us.
Sentinel Advisory Group, subsidiary of MD Global Partners, LLC (the “Firm” or “(MDGP”) charges a commission, or a markup or markdown on each transaction. The total trading cost will add to your losses or reduce your gains. As a result, there is the possibility that you may incur trading losses and trading costs while the firm and our representative earn commissions, markups and markdowns. The representative’s recommendations are not performance guarantees and having a high turnover account is your choice and you can reduce the number of transactions or stop trading at any time.
Sentinel Advisory Group, subsidiary of MD Global Partners, LLC (the “Firm” or “(MDGP”) is committed to customer service and a culture of compliance. We seek to ensure that at all times our representatives and affiliates act in accordance with all securities laws and regulations and in accordance with your investment objectives. We are sending this letter to maintain our level of communication and our commitment to our clients while ensuring the accuracy of your account information and objectives. We look forward to working with you to help you achieve your financial goals.
Again, if you have any questions or concerns whatsoever, please do not hesitate to call our compliance department at: (212) 308-2864.
Sentinel Advisory Group