This policy provides a clear framework and set of obligations around courtesy credits applied to client accounts.

policy

• Annual per-client cap of $400; one credit per client per calendar year.
• Credits are discretionary.
• Credits may not be contingent on referrals or additional assets.
  • example: “We’ll apply a $400 credit if you move your 401k over” (prohibited)
  • example: “I’ll credit you $200 if you introduce me to a friend” (prohibited)
  • we are allowed to credit a client account as a courtesy if they were subjected to a ‘transfer out’ fee from their previous advisor. The credit must not exceed the cost incurred by the client to move accounts to us.
• The credit may not be contingent upon the use of any one particular tax preparer or estate planning attorney, etc. The client must be allowed an independent choice around professional service provider.
  • example: “If you go with my estate attorney, I’ll credit you $300” (prohibited)
  • we are allowed to provide a client a few choices of service providers
• The credit must benefit the client only.
• All credits are processed as negative (“reverse”) invoices through the existing fee billing channel and funded from the firm operating (house) account.
• Credits will be added as line items in the advisor billing board and be deducted from the gross client billing amount during the month it is submitted.

criteria

1. Demonstrated client benefit (ex: tax preparation fee credit)
2. Adviser files supporting documentation (ex: CPA invoice or estimate)
3. (CCO) approval required before processing

action steps