Frequently Asked Questions
Who holds my money?
Our custodian is Pershing LLC, located in Jersey City, New Jersey. Pershing was founded in 1936 and is the largest independent clearing/custody firm. Pershing is a division of The Bank of New York Mellon Financial (NYSE BNY). The Bank of New York, founded in 1784 by Alexander Hamilton is the oldest bank in the nation. As of June 30, 2014, BNY has $400.7 billion in assets and $7,392 million in revenues. For further detail, please see www.pershing.com
Who is Royal Alliance Associates?
Our broker dealer (BD) is Royal Alliance Associates, Inc. Royal is an independent broker deal and an unaffiliated third party. While giving us access to the securities markets, Royal provides compliance and supervisory oversight for our clients. For further detail, please see www.royalalliance.com.
Are you employed by AIG, Royal Alliance, or Pershing?
No. We are employees of Universal Wealth Management, LLC, Royal Alliance Associates, Inc. and Pershing, LLC are independent third parties that provide services to us.
How safe is my money?
PERSHING / ROYAL ALLIANCE
Your accounts are insured against the failure of Pershing, LLC or Royal Alliance Associates Inc. by Securities Investor Protection Corp. (SIPC), a U.S. Government-chartered corporation. Pershing serves as a custodian of assets for Universal Wealth Management. Pershing is a member of the Securities Investor Protection Corporation (SIPC®). As a result, securities in your accounts are protected up to $500,000 (including a maximum of $250,000 for claims for uninvested cash awaiting reinvestment). For details, please see www.sipc.org.
In addition to SIPC protection, Pershing LLC provides coverage in excess of SIPC limits from certain underwriters in Lloyd's insurance market and other commercial insurers. The excess of SIPC policy is valid through February 10, 2016.
It provides the following protection for Pershing LLC's global client assets:
- An aggregate loss limit of $1 billion for eligible securities-over all client accounts
- A per-client loss limit of $1.9 million for cash awaiting reinvestment-within the aggregate loss limit of $1 billion
Neither SIPC nor excess of SIPC insurance protects against loss due to market fluctuation of investments.
SEI PRIVATE TRUST COMPANY
SEI Private Trust Company is a trust institution-not a bank or brokerage firm-your assets are segregated from SEI's and they are held in your name. This means trust-company creditors have no claim to your assets. SEI Private Trust Company, like other trust companies, may not pledge, lend or margin assets that are held in custody. Providing a final layer of protection, funds are regularly audited by independent and internal auditors, and are subject to routine examination by the federal OCC. In order to help protect investors from employee errors and omissions events, SEI maintains a current Errors and Omissions Professional Liability policy. In addition, SEI provides fidelity bond coverage for protection against employee dishonesty, including forgery or alteration; premises; transit; counterfeit currency; computer systems; and other coverages. For further details, please see www.seic.com.
Who oversees Universal Wealth Management, LLC?
Royal Alliance Associates, Inc. provides Universal Wealth Management, LLC with legal, compliance and supervisory oversight. Representatives of Universal Wealth Management, LLC must demonstrate that we have followed industry standards in terms of investment recommendations and their suitability for clients. We have an on-site audit conducted by Royal Alliance Associates, Inc. on an average of twice per year. At this audit, our books and records are reviewed to ensure that we are complying with all industry rules and regulations as well as adhering to Royal Alliance Associates Inc.'s procedural requirements. Royal Alliance Associates Inc. also provides email surveillance for our email traffic to make sure there are no misrepresentations or violations of regulations surrounding email communications with clients.
In the event of a natural disaster or other major regional emergency, will I still be able to contact Universal Wealth Management, LLC to conduct business?
The desktops and servers at Universal Wealth Management, LLC are housed on a highly secure, advanced virtual cloud environment. This environment is accessible from anywhere, has unlimited storage capacities, 24/7 monitoring (of both the server operations and data center), and failover protection with daily backups. If operations are disrupted at our office, we are able to work with full capabilities at any location with Internet access (this includes mobile devices). Our servers are housed at multiple data centers in different areas of the country, ensuring near-100% uptime if there is a regional emergency.
How do I know that you won't run off with my money?
Client assets are held by a third party public custodian, Pershing LLC and SEI Private Trust Company. All checks from clients must be made payable to either Royal Alliance Associates, Inc. or SEI Private Trust Company. Universal Wealth Management, LLC employees do not have access to client assets. We can generally only move money from your account in the following fashion:
- Wire transfer to another account in the exact same name at another institution with your written permission
- A check payable to the parties listed on your account registration (e.g. Mr. & Mrs. Jones) and mailed to your address of record.
- Other transfers are possible but only with the client's express written permission and back-up verification and authorization from Royal Alliance Associates, Inc., Pershing, LLC and SEI Private Trust Company.
How can I be assured that I will receive the same attention as your larger accounts?
Based on our systematic management process, our clients own what we believe are the very best choices in all categories. Irrespective of size, our accounts generally own the same investments. Therefore, we manage your accounts based on our opinion of a specific holding. If our opinion changes, we make adjustments on all of the accounts at once. No account gets preferential treatment.
Do I have to sell all of my current investments to work with Universal Wealth Management, LLC?
No, we will not force you to sell any investments. Although, some investments may need to be sold in order for Universal Wealth Management, LLC to manage them for you. However, most investments will transfer to Pershing, LLC in kind without having to be sold. We will recommend changes that we believe could improve your portfolio with an eye toward the tax consequences, penalties and charges associated with any sale transactions.
What is a fiduciary and why is having a financial advisor that acts as your fiduciary important?
A fiduciary is an individual in whom another has placed the utmost trust and confidence to manage and protect property or money. It describes the relationship wherein one person has an obligation to act for another's benefit in that person's best interests. Universal Wealth Management, LLC acts in a fiduciary capacity for its investment advisory clients.
When advisors recommend investments that pay commissions, a fiduciary relationship does not exist. Clients of Universal Wealth Management, LLC that are in fee based accounts do not pay commissions, hence a fiduciary relationship exists. You will be required to pay transaction costs pertaining to the trades done in your account, Universal Wealth Management, LLC does not keep any of these charges.
We do have the ability to earn commissions on certain transactions but these cannot be executed in fee based accounts. If a client wants to purchase an investment that carries a commission we can facilitate in a separate, non-fee based, account.
Additional Questions? Please contact us at karen@universalwm.com
Universal Wealth Management, LLC
945 Reservoir Avenue
Cranston, RI 02910
401-626-3450